How to Help Lower Workers Compensation Costs for Employers
Employers are looking for ways to significantly reduce their Workers Compensation insurance costs. This involves, among other things, safety in the workplace. Following are several recommendations to help your insureds gain control over their Workers Comp costs.
- Create a safe environment. Employers who emphasize safety in the workplace and make safety a top priority typically see good results in reducing workplace injuries. This means that employers should conduct a top-to-bottom safety assessment of all of their facilities to see where problem areas exist to implement the proper measures needed to prevent accidents and injuries. It also means encouraging and rewarding employees for safe practices.
- Empower supervisors. Supervisors must be involved in helping to prevent injuries by taking a proactive role in assessing safety procedures and making recommendations for change.
- Offer a return to work program after an injury. Obviously, the longer an injured employee remains out of the work, the higher wage replacement and medical costs will be. This ultimately pushes Worker’s Comp premiums up. To reduce the time an employee is out of work as much as possible, create a formal return-to-work program. This encourages injured employees to get back to work as quickly as they can either on a modified schedule or part-time or limited basis at first and slowly transitioning back to their full-time positions when appropriate.
- Develop a company wellness program. Healthy and fit employees are less likely to become injured on the job. Wellness programs vary greatly – from providing subsidized health club memberships or an on-site gym for employee use to offering employees the services of a personal trainer or dietitian, either paid for or subsidized by the company, to on-line and telephone coaching for weight management and health trackers.
- Be sure employees job classifications are accurate. The principal factor of Worker’s compensation insurance premiums is the classification of job positions according to their level of injury risk. Help your clients’ classify their employees properly. Also, if they work with subcontractors, independents or temps, make sure they aren’t misclassifying and underinsuring these individuals.
- Assess the X-mod factor. Another important component of an insurance premium is the experience modification factor. A company’s actual losses are compared to its expected losses by industry type. Factors taken into consideration are: company size, unexpected large losses and the difference between loss frequency and loss severity. A firm’s X-mod is calculated by the National Council on Compensation Insurance (NCCI) or in some states, by an independent agency. It represents either a credit or debit that’s applied to the Worker’s Compensation premium. An X-mod of 1.0 is considered to be the industry average. A mod factor more than 1.0 means that the employer’s losses are worse than expected and a surcharge will be added to the premium. A mod factor less than 1.0 means losses are better than expected, resulting in a premium discount. Be sure that your client’s X-mod has been calculated correctly and that he or she has not overpaid in premiums.
At Caitlin Morgan we specialize in Workers Compensation and can provide you with an insurance program that fits your clients’ needs. We can also help you in implementing a return to work program and assist in fostering a culture of safety to help mitigate accidents on the job. Give us a call at 877.226.1027.