In 2010, California was the 5th most expensive State in regards to Worker’s Compensation Insurance. By 2012, it had moved to the 3rd highest. As of 2014, it now holds the position as the State with the highest Worker’s Comp premiums.
Reforms under Senate Bill 863 (2012) introduced new tools designed to improve the efficiency of Worker’s Comp and reduce litigation. Unfortunately, since then, employer’s costs have increased. The high premiums make it increasingly difficult for employer’s to afford Worker’s Comp, which is required by law.
Fortunately, there are ways that an organization can reduce these costs, including some of the indirect costs associated with Worker’s Comp claims.
Setting Up Safety Programs
In certain states, including California, it is actually a legal requirement that an employer have a written Safety Program. Having a Safety Program helps you to identify workplace hazards, and helps to eliminate them. Even in States where this is not required, it’s highly recommended as a way to reduce costs through injury prevention.
Research has shown that for every dollar spent towards injury prevention, companies are seeing anywhere from $2 to $6 in returns. That type of return on investment rewards companies willing to put their commitment to safety in writing.
Using the Accucomp System with Gaspar Insurance
One of the key things that affects any company’s workers compensation rate is your “experience modification”. A high “ex-mod” equals a high rate and a low “ex-mod” equals a low rate. Your experience modification is assigned by your state workers compensation bureau and should be based on your past claims history. However, these numbers are often incorrect and we can help.
What can Gaspar’s Accucomp system actually help me with?
- Our medical professionals can potentially reduce the reserve amounts on existing claims.
- Our medical professionals can help close old claims still showing as open.
- We can show you exactly where your accidents are happening and pinpoint ways to reduce claims.
- Our average clients experiences a significant experience medication decrease after just one year with Gaspar.
Return to Work Programs
No matter how much a company tries to prevent accidents, eventually one will happen. When they do, it’s important to have a Return to Work Program in place. Return to Work Programs are designed to proactively assist your injured employees with getting back to work as soon as possible. Even if they are only on fewer, light-duty hours, it’s a good way to get them back into the workplace as they recover. Having these programs in place immediately has a cost benefit on your Worker’s Comp claims.
Research has shown that claims that are open for longer tend to be more expensive. There are obviously many factors involved, but an example of one is replacement income. The longer it takes an employee to get back to work, the longer that the claim has to cover their lost income. This may lead to increases in your premium
There are also some simple things that you can do to reduce your costs, which are more like tips, and easier than creating programs or joining organizations. They are still incredibly effective and may be easier to implement in the short-term.
What are 5 simple things I can do to reduce my costs?
- Always use the most recent copy of the California Employee Classification Code Book and study the classification names closely. Make sure employees have the correct job titles and job descriptions for their roles. Some classes carry more risk and higher premiums.
- If possible, report only regular wages, and not work done at time and a half. This will reduce your payroll amount, which is used by the insurance carrier to calculate your Worker’s Comp premiums.
- When hiring, make sure to ask candidates about their safety record (at other workplaces or work sites) and contact their previous employers to verify.
- Consider offering higher quality health insurance in order to reduce your premium.
- When an employee is injured, provide immediate medical attention. This reduces the chance of complications that may come from delayed care and will keep the claim lower.
The Overall Picture
When working to reduce the costs of your Worker’s Compensation, you need to take more into consideration than just the obvious and direct costs, like your premium. There are other costs that can be just as damaging, like the cost of absenteeism, training replacements, and loss of productivity, just to name a few.
Workers Comp rates are expected to increase yet again, even if only by a few percent. Taking all of these areas into consideration can make a huge difference to your Worker’s Comp Insurance costs, direct or indirect.