Three Things That Can Hurt Your Workers' Compensation Costs
COMMUNICATE --THE key to reducing workers' compensation costs.
When it comes to implementing a workers' compensation management program, it seems as if everyone -- managers, employees, adjusters -- lack the ability to understand how lack of knowledge hurts workers' comp cost and, in turn, the employer's bottom line.
At LowerWC.com we ask:
"What happens when you don't know WHAT you don't know?"
1: Management's Lack of Knowledge
Management's failure to understand the true costs of workers' compensation far outweighs the face value of the claim.
For example, if an employee has a claim costing $15,000 do you know how much you will really pay? Let's say your profit margin is 8%. It's going to take a whopping $187,500 to replace the cost of the $15,000 claim.In other words, a $15,000 claim isn't just a $15,000 claim. (See our
Transitional Duty Cost Calculator.)
2: Adjusters' Lack of Knowledge
Adjusters overlook missing medical information, do not understand complex medical terminology, and settle large claims without all the facts and are unaware of the costs associated with claims. All these factors have a huge impact on the real cost of claims. (WCxKit)
You owe it to yourself to visit the adjuster's facility to determine whether or not good work practices are used. If you see files lying on the floor and phone calls constantly interrupt the adjusters, these are red flags.Ask to see the claims to ensure adjusters are completing vital information about the claimants and do not move forward to settlement without a complete picture of the claim.
Adjusters must understandmedical terminology associated with workers' compensation claims.For example, if an adjuster thinks a positive axial compression test means the injury is genuine, then you've got a problem.A positive outcome of an axial compression test means the injured employee is exaggerating symptoms.
Have your adjusters visited your facility lately?They need a physical, three-dimensional understanding of your transitional/modified duty program and how it works.Therefore, they need to see the work sites,see the layout, and how modified duty jobs are implemented so they can make more informed recommendations.
3: Employees' Lack of Knowledge
Employeesmay assume the insurance company is paying their claim. Employees may not realize the costs associated with workers' compensation claims may come back to bite them in terms of budgetary cuts, lack of pay increases, and potential layoffs as company resources dwindle because the employer is paying out huge deductibles and related costs on workers' compensation claims.(WCxKit)
This is particularlytrue if the company has a large deductible. Thus, for each claim, the out-of-pocket expenses eat away at the finite resource pot.There is only so much money and it can be used either to benefit all employees or to pay out large claims for the few who know how to navigate the loopholes.
See related article: "9 Top Ways Employers Reduce Workers Comp Costs"
Three Things That Can Hurt Your Workers' Compensation Costs
By: Robert Elliott, J.D.
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