Statistics and Facts
- Employees equipped with fundamental information -- the majority of claims can be closed within 6 months saving costs ranging range from $1,000 to $20,000 in medical and lost time savings.
- A survey of disability income and medical rehabilitation/case management programs found that a small investment can produce significant financial results. On average, that return was $30 for every $1 invested (Health Insurance Association of America)
- In a Tillinghast-Towers Perrin study on workers' compensation, 41 percent of employers reported decreased costs, but only because of their own efforts to reduce them. 88 percent of these employers use case management; 82 percent use transitional return to work programs; and 71 percent use vocational rehabilitation.
- Repetitive stress injuries, such as carpal tunnel syndrome, are one of the fastest growing health hazards in the American workplace. The number of repetitive stress injuries reported increased sevenfold in the last decade, costing businesses $20 billion a year and involving 2.7 million accepted workers' compensation claims per year.
- Back pain is the second leading cause of work absenteeism in the U.S. and results in more lost productivity than any other medical condition. (Rowe, M.L. "Preliminary statistical study of low back pain." J Occupy Med. 1963;5(7):336-341.)
- Back injury is the most expensive on-the-job injury.
- The cost of treating patients with low back pain has increased 241 percent during the last decade. (Kelsey, J.L., White, A.A., III. "Epidemiology and impact on low back pain." Spine. 1980;5(2):133-142.)
- Lost time from work and disability payments for work-related low back problems cost up to three times as much as actual medical procedures.
- Estimates of total costs of direct medical and indirect expenses for low back pain in the U.S. range from $20 to $100 billion annually. (Snook, S.H. "The costs of back pain in industry." Occupy Med. 988;3:1.)
How to Avoid Costly Workers’ Compensation Claims
- Workers' Compensation is a mainstay of business and protects employees and employers alike. However, Workers’ Compensation claims can become costly if you don’t know what to look out for. If you understand how the system works, you can take advantage of simple ways to reduce Workers' Compensation costs.
- Workers' Compensation coverage includes two types of protection: Workers' Compensation and Employer's Liability. Regardless of the industry you're in, the best way to control the cost of Workers' Compensation insurance premiums is to avoid injury claims. A safe environment, effective safety training, and ongoing programs to promote safe work habits are keys to preventing employee injury. As an employer, managing your Workers’ Compensation claims means employees are less likely preventing work site injuries before they happen as well as getting injured employees back to work as soon as possible. Good loss prevention & control, claims management and effective return-to-work programs can cut costs dramatically.
- One of the most costly aspects of Workers’ Compensation claims is the length of time they take to process. Claims can drag out and if not settled quickly, can turn into costly administrative nightmares. At AIWD we inform employees on how to manage each phase of a short-term claim. The trainings provide a number of suggestions for reducing your overall Workers’ Compensation insurance expenses, including:
- Establishing comprehensive safety and health education and trainings
- Providing speedy and efficient medical attention to injured employees
- Completing and filing all relevant insurance forms
- Maintaining contact with the insurance adjusters, human resources and Texas Department of Insurance (TDI)
Understanding the Experience Modification Rating
An effective way to reduce your Workers’ Compensation premiums is to lower your Experience Modification Rating (EMR). Also referred to as the Experience Modification Factor, Experience Modifier or just the Mod, the EMR is an adjustment made to an employer’s Workers' Compensation premium. Any company with an annual premium greater than $5,000 is subject to a premium modification rating. Because an employer’s loss history is often a predictor of future losses, insurance companies use EMR as a prime indicator of a company's commitment to safety and overall management competence.
Workers' Compensation costs typically represent one of the largest operating expenses of a business yet business owners and managers are often too busy running daily operations to adequately administer the complexities of being a buffer for Workers' Compensation claims.
Unfortunately, some organizations don't find out how important preventive education regarding work related illness' and injuries until it is too late and an employee files a claim or lawsuit.
Outsource Consulting allows employers access to highly trained HR professionals with expertise to assist organizations to ensure compliance with applicable laws and regulations. Outsourcing the HR function or various parts of the function has proven to be a cost effective and efficient way for clients to gain human resources expertise for their organization while delivering quality programs and services to their clients as well as to their employees.
Outsource Consulting has both long and short term benefits for employers, managers, and employees. If you are not convinced you need to outsource or consult with AIWD, or not even sure you need AIWD at all, consider the following results and bad outcomes of difficult employee situations such as HR staff inundated with employees with challenging claims, poor investigations, failed attempts at conflict resolution, not complying with federal and state laws or your own policies.