Managing Your Workers' Comp Costs
Don't let this insurance necessity break your bank account.
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Talking about increasing healthcare costs is a favorite topicfor the press. Much less is written about increasing workerscompensation costs, though, which can be as troubling for manysmall businesses.
Although workers compensation is regulated by the state, you dohave some control over the actual premiums you pay. Here are stepsyou can take to manage your workers compensation costs moreeffectively:
First, avoid injury claims. The fewer comp claims your employeessubmit, the better your premiums will ultimately be. This requiresmanagement commitment to creating a safe environment and topromoting safe working habits. Steps you can take to make thesegoals more concrete include having written policies, regular safetytraining and site inspections.
Setting safety objectives that are constantly tracked can alsobe a visible way of monitoring the effectiveness of your efforts.Incentives for achieving goals should be carefully consideredbefore implementing, though. While it may seem like a good idea, itmay prevent workers from reporting or paying attention to injuriesthat could blossom into more serious injuries.
Another way to reduce your costs is to bring injured workersback to work sooner. One way to do is by setting up a return towork plan that allows them to work on activities that they arestill able to conduct. If it is possible, establish relationshipswith health care providers that you can refer injured workers toconsult. Providers who specialize in handling work-related injuriescan be better able to oversee the employee's recovery andencourage a safe, but faster return to work.
Even if your company has not submitted a single claim, yourpremiums may still increase the next year. Many small businessescannot receive workers comp coverage on their own. As a result,they are assigned to a risk pool that consists of other smallbusinesses as well as employers that have high-risk employees.Premiums can rise because of the overall pools' claim activity.To guard against premium increases, see if you can join anotherpool that has a more favorable claims history.
Taking the time to check if you are being billed correctly canresult in some savings, too. Workers compensation premiums arebased upon your company's employee classification, payroll, andexperience rating. See if employee classifications can be tweakedto be more favorable for your company. Conduct a payroll audit toensure that the base from which premiums are calculated areup-to-date. And, where applicable, check that your company'sexperience rating accurately reflects how well your company hasmanaged its claims.
If your yearly workers comp bill totals in the tens of thousandsof dollars, you may want to have your premiums reviewed by anoutside expert. Companies will check your bills against your actualinternal data, look for areas where you are overcharged, and thenapply for refunds.
Just because the press does not talk about controlling workerscomp costs does not mean you shouldn't either. A little focuson some basic measures can net some big savings.