In the 1930s, workers’ compensation began as an employer’s moral obligation toward his or her workforce to do the right thing when someone was injured on the job. Today, it is mandatory in every state except Texas. And, like everything else, the costs seem to keep going up and up.
But, it is possible to keep these costs under control. In fact, they can even be reduced. How? Prevent worker injuries.
Workers’ compensation manual rates are based on different factors including:
- The type of business (NAICS code)
- Job classifications/employment categories
- State workers’ compensation commissions
Where a facility controls its own destiny is the experience modification rate, sometimes called “EMR” or “ExMod.” This rate is determined by the facility’s injury/illness experience from the previous three years, not including the last year. (2014 premiums are based on data from 2010–2012.)
A new facility starts with an experience modification rating of 1. As the company matures, it can be compared to other facilities with the same NAICS code. If they have fewer injuries/illnesses than other facilities in their category, their ExMod rate decreases. If they have more injuries/illnesses than others in their category, their rate will increase.
ExMod rates are based primarily on the frequency, not the severity of workplace injuries and illnesses. The fewer employees who are injured at work, the better.
Having a robust safety program helps to keep workers safe and avoid injuries. The following are best practices that have helped facilities improve their safety programs and lower workers’ compensation rates.
1. Involve Management
Upper management’s focus is often on meeting production goals, but they are ultimately responsible for workplace safety as well. Management is vital in setting the tone for what will be tolerated in the workplace.
Training upper management, middle managers and supervisors to understand the facility’s safety programs, model safe behaviors and reward employees for following the safe practices and procedures (instead of just finding someone doing something wrong) that have been established is a sure way to make sure that safety is not compromised to meet production goals.
2. Educate Employees
This begins when new employees are hired and should never really stop. All employees should be aware of safety policies and be able to demonstrate that they know how to follow all safety procedures and instructions associated with their job duties.
Each employee should also understand the hazards that they will face and how following the safety programs and procedures that are in place will help protect them from those hazards. Mentoring or shadowing new employees is another way to help reinforce training and help ensure that what has been taught in training is being implemented.
3. Identify “Frequent Flyers”
It is not uncommon for the people who get hurt most often to be really good employees. Identify the folks who do whatever it takes to get the job done and make sure that they are not taking safety shortcuts or otherwise compromising safety to meet production goals.
4. Actively Manage Open Cases and Have a Robust Return-to-Work Program
At least quarterly, review all open claims and have managers or supervisors provide a status update on employees who have not returned to work following an injury or illness. Lost work time claims are often more costly than medical-only claims. The sooner an employee can return to work, the better.
Work with physicians to understand which modified duties an injured employee can safely perform when they return to work. This helps the employee transition back into their duties while providing value to the facility.
5. Investigate All Injuries and Illnesses
Investigation and documentation of injuries and illnesses help identify the root causes of an incident so that changes can be made to prevent it from happening again. Train supervisors, safety committee members and anyone else who will be involved with injury investigations so that they understand how to look for root causes and how to document events properly.
The best way to control workers’ compensation costs is to not have claims. The way to avoid claims is to ensure that job hazards have been identified, safety procedures are in place to avoid those hazards and everyone is well educated to understand the value of these procedures as a way to avoid injuries and go home safely each day.
You tell us: Have you instituted any of these tips at your facility to save on workers’ compensation costs? How have they worked for you? Let us know in the comments section below!
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