How to reduce worker compensations costs
Cost reduction in workers compensation used to be tricky. Not only because it must obey the law of each state (leading to cost variation), but because it can get really expensive if not carefully planned.
So, we’re going to try to share a couple of important points to keep in mind. These will help you learn how to reduce workers compensation costs in workers claims as much as possible without disregarding workers.
Reducing cost is always possible when you know how to optimized your level of play.
Work on strategy, not urgency!
Any worker’s injury can result in hefty bills for the company, but that is not the only thing to be worried about. They also reduce productivity, change work schedules, require emergency replacement personnel, cause damage to equipment and/or property and lower morale as a consequence of said accident.
If tensions are running high, and things are mishandled, your company could end up spending a lot of money on a single claim.
For example, if a worker trips, falls and as a result needs surgery on their knee, they will be in a hurry for the policy holder. This policy will guide them correctly through the process and have their claim resolved (approved or denied) as soon as possible. If things go wrong, a lawyer could get involved, make the process even harder and raise the costs.
On the other hand, poor claim management could strain the worker-employee relationship. So, in order to avoid these problems, you must be prepared.
First step: be prepared
We do not need to tell you the perks of thinking before acting but thinking ahead isn’t enough. You need a strategy to succeed!
When things go wrong you don’t have a lot of time to think about what to do. That is why it’s important to have a contingency plan for worst case scenarios. As they play out, you will have a procedure you can rely on.
Start by getting an idea of about how much each injury could cost and calculate your budget accordingly. To get an accurate estimate of the cost we recommend the Estimated Costs Tool (https://www.osha.gov/safetypays/estimator.html) provided by the Occupational Safety and Health Administration (https://www.osha.gov/).
We know what you’re thinking: gathering a perfect and accurate estimate of costs may sound like climbing Mt. Everest. However, a near perfect estimate can be made with a few proper tools and techniques like those we’ve recommended.
Second step: Safety first
Less injured equal’s less claims equals less money spent. With this in mind, make a clear strategy based on what risks your workers face. We suggest the following safety actions:
- Developing a Safety Program that should be strictly followed by the whole team will be the rock of your worker´s compensation process. At the same time, set up a Safety Reward and Penalty program. This will entice worker to think first and act second putting safety first.
- Have a Safety Training program in place. Your employees are less likely to get hurt if they are familiar with standard procedures and safety measures.
- Have a standard procedure for when someone gets injured. Know what to do, who to call and how to act quickly when the worst happens. Don’t forget to trace your loss history on a quarterly basis. This is a good way to see how effective your safety program is.
- Prepare a “return to work program” to actively aid injured workers in getting back on their feet as soon as possible. This usually involves a gradual return – working part time or light-duty hours in agreement with what doctors say is best. As the United States Department of Labor states (https://www.dol.gov/sites/dolgov/files/odep/topics/pdf/pap_transition%20back%20to%20work%20final_2017-09-07.pdf) in their Transition Back To Work: Policies to Support Return to Work after Illness or Injury document, “Improving the worker’s ability to transition back to work as soon as possible, helps lower the cost to business for expenses such as absenteeism, lost productivity, and, in some cases, the need to replace employees”.
Third step: Go Digital
Finally, the biggest secret of them all. The best way for reduce costs in worker’s compensations is to reduce the lifecycle of claims.
1. When you digitalize all processes, the policy holder gets an easier look at how the claim advances through the different steps towards approval or denial. Moreover, it provides trustworthy centralized information.
With digital management of claims you can run reports, stay current on the state of a claim, detect fraud and avoid hundreds of papers cluttering your workspace.
2. Another advantage of going digital is that it allows for better communication with the injured employee. Staying in contact with the wounded makes the process go faster and provides better results. As the Claims Journal (https://www.claimsjournal.com/) advises in their article titled Five best practices to ensure the injured worker comes first (https://www.claimsjournal.com/news/national/2016/11/09/274673.htm): “Stay in close contact with the injured worker; keep the lines of communication open. Use this opportunity to determine if there are any treatment delays that can be mitigated or any questionable treatments that are being recommended. Expectations on communication speed have increased in this constantly connected world. We need to be as close to them as possible throughout their journey to recovery.”
Getting a Raise in Profitability
Each and every insurance claim can be a painful headache if handled poorly. The consequence? A huge loss of money for your company.
It’s very important to have a plan and methods to help your workers recover in the least amount of time and in their best shape.
Now that you know the steps to success, here’s another mind blowing solution: TerraClaim (www.terraclaim.com)
- Get automated workflows, that allow you to considerably reduce the lifecycle of each claim.
- Benchmark against yourself and competitors.
- Set a budget for insurance claims, generating an accurate idea of how finances would be affected if an injury happened in the work place.
- Access a huge database to analyze procedures and behaviors
- Get an easy-to-use and intuitive dashboard
- Utilize an array of search filters that allow for deep segmentation
- Run reports in no time with smart insurance management software
Build your strategy with TerraClaim! You’ll do the thinking and we’ll handle the processing.
Start tackling your claims with a free demo experience. (https://info.terraclaim.com/request-a-demo)