Health & Benefits Guest Article Lynne Wallace
Guest contributor Lynne Wallace of 101MFG Partner Vantreo describes Workers Comp as a “Perfect Storm”
It's a simultaneous occurrence of events that, when taken individually, would be far less powerful than the storm resulting from their chance combination.
Your company doesn't have to stand idly by: Through the unique Vantreo-101MFG partnership, our members are saving $10,000's a year, and feeling "in control" of what to many is still one of the largest "uncontrollable expenses."
What are the events?
- Medical and time-off cost increases – A 10-year history of almost double digit increases in workers compensation claim costs.
- Permanent disability benefits expected to increase – The 2004 reform adjusted significant abuse in this area but some think it went too far… the pendulum is beginning to swing the other direction.
- Persistent high unemployment rate – making it much harder to return injured workers to transitional or light duty positions.
- The moving/unsettled target of national healthcare reform and a frenzy of competition has taken place and workers’ comp rates have plummeted. Low-price leaders historically don't survive.
- Investment returns disappear – Given the current economy carriers are no longer able to rely on premium investment returns and there are questions related to the solvency of several of the largest work comp insurers.
- Obesity and other chronic conditions continue to increase – This trend could result in increased injury frequencies and longer disability durations.
- Aging work force – This could result in more mandated coverage of pre-existing conditions and slower healing rates.
- Prescription drug remedies – The increasing use of narcotic prescription drugs to alleviate pain also prolongs a final claim resolution.
As an employer, you can lessen the impact of the storm by focusing on these things:
- Injuries – if you have no claims, the impact of any rate adjustment will be measurably less. It’s time to value proactive safety efforts more than ever before.
- Workers’ comp claims generally affect your premium rates for three years. And from the moment an injury occurs you need a clear action plan in place to bring the claim to resolution. The right strategy can save thousands of dollars and involves strong claims management, an effective medical provider relationship and careful internal communication.
- For best results, seriously consider outsourcing this effort to a service that will expertly handle the follow-up and coach you internally along the way.
- Errors – studies have shown that over 35 percent of experience modifications are incorrect or mismanaged. The workers compensation system is deluged with overwhelming recordkeeping with three or four years of payroll, claims classification and date specific information often reported by several different insurance companies at the same time. Errors when they occur can cost you additional premium for three years.
- You can save money by making sure that someone is monitoring the accuracy of your payroll audits, claims information and experience modification calculations.
- Culture – Every company has its own culture. It is “what is normal” that makes a difference … are the things that are normal in your company normal because that’s the way you want them to be or because that’s the way they have always been? Often the vision and goals of the organization differ from the actual results. While insurance, human resources and safety provide protection and focus, it’s the company culture that ultimately delivers success.
- People who enjoy their work have fewer and less severe injuries. This may be easier said than done but it is an amazing tool to weather a storm. Could it be time to hit the culture “reset” button for your business?
The best strategy begins now… don’t wait until your workers’ comp insurance is up for renewal. A storm is looming. You can either hunker down and hope it passes or engage a plan to stand solid in the months and years ahead.