NIA’s Workers’ Compensation Specialist Offers Tips
to Reduce Claims and Lower Premium
While workplace-related injury rates
are now at the lowest level since the Bureau of Labor Statistics
agency began tracking information in the 1970s, workers’
compensation medical costs have climbed. Reasons for the surge
include increased use of newer, more expensive prescription
drugs to treat injured workers and a significant rise in the
cost and utilization of hospital services, particularly in critical
care and the use of MRIs.
As a result, employers are looking for ways
to lessen workers’ compensation costs through risk management
and safety programs, which can help to reduce claims frequency
and assist workers in returning to their jobs as soon as medically
“Cost savings will manifest themselves in a more favorable
experience modification factor,” notes Britt Simon,
a workers’ compensation attorney for The NIA Group.
“The experience modification factor is a company’s
actual workers’ compensation claims history reflected
over a three-year period. If you have fewer claims and can
control the costs associated with them, the experience modification
factor will be more advantageous to the employer. This factor
is an adjustment to the workers’ compensation premium.”
Three factors influence the size
of the workers’ compensation premium: a
company’s payroll, the
classification codes assigned to the type of work,
and the experience modification factor.
The experience modification factor for an employer is tied
to the total dollar amount of claims paid by its insurance
company. A high experience modification factor results in
a higher than standard premium and as such you pay more than
average. A low experience modification factor results in a
lower than standard premium and you pay less than average.
Risk Management and Safety Programs
Can Curb Claims:
Good risk management and safety programs may reduce accidents,
lessen the number and severity of claims, and eventually
lower the experience modification factor. There are many
types of safety programs that can be implemented to reduce
the chances for a major loss and accident frequency, such
as instructing employees in safety compliance, encouraging
safety through employee award programs, installing new equipment
to reduce the amount of manual labor, and analyzing prior
injury reports to look for accident patterns.
The NIA Group specializes in designing workplace safety
and risk management programs for businesses of all types
and sizes, and helps companies assess their current work
environment in order to identify trouble spots and make
changes. “Implementing a strong safety program is
not only a prudent business practice; it demonstrates to
employees that their employer is serious about safety and
dedicated to reducing accidents,” says Simon.
Report Claims Quickly To Lower Costs:
You can also reduce costs by reporting claims promptly,
allowing insurance adjusters to investigate them in a timely
fashion, and selecting appropriate medical treatment for
the injured or ill employee. “It’s been proven
that the sooner you rehabilitate a worker, the more quickly
they return to work,” notes Simon. “Otherwise,
the condition simply worsens, prolonging the rehabilitation
and costing the employer additional expense to find a temporary
or permanent replacement.”
Choose Physicians Carefully:
Simon also suggests companies seek workers’ compensation-sensitive
physicians to conduct physical evaluations and provide a
regimen of rehabilitation. “A doctor who’s focused
on getting the employee back to work can schedule an appointment
on Friday evening rather than during the week,” notes
the attorney. “That alone can be sufficient motivation
for the employee to complete rehabilitation so a Friday
evening is not tied up at the doctor’s office,”
he explains. Plainly, it is important to utilize a treating
doctor whose goal is to cure rather then to treat.
In addition to higher premiums, the employer also loses
in other areas when an employee is slow to return to work.
Higher medical bills, low employee moral, added burden on
remaining employees, costs of replacement labor, and potential
litigation expenses incurred when a claim drags on can all
reduce a company’s bottom line.
“These are some of the primary ways to control and
reduce workers’ compensation costs,” notes Simon.
“Companies looking for ways to reduce their workers’
compensations costs should contact their NIA broker or agent
to help establish safety and risk management programs and
to find ways to streamline and control the claims process.”
For more information on workers' compensation management,
contact your NIA advisor or Britt
Simon at 732-469-6622 or firstname.lastname@example.org.