Five Ways to Save on Workers’ Compensation Costs

Rising premiums are not limited to health care insurance. Workers’ compensation premiums are rising almost as fast and represent a significant cost to almost every organization. Unlike health care insurance, employers cannot reduce workers’ compensation coverage or pass premium increases on to employees. Nevertheless, there are some steps that every employer should consider if it wishes to better control its workers’ compensation costs. Here are five simple suggestions:

1. Transitional and Modified Duty. Implement a temporary or transitional return-to-work program for employees who are injured on the job and released to return to work with restrictions. Bringing an injured employee back to work as quickly as possible offers a long list of advantages for both the worker and the employer with very few drawbacks. Identify light-duty office jobs and any sedentary positions that individuals with restrictions might perform on a short-term basis. If necessary, tailor the duties to meet the individual’s medical parameters. Every situation should be assessed on a case-by-case basis, but with only the rarest of exceptions, returning a workers’ compensation claimant to light-duty work yields long-term financial rewards.
   
   
2. Compare Prices. Michigan allows for competitive pricing of workers’ compensation coverage. Obtain bids from several of the many insurance companies that write workers’ compensation coverage in Michigan. Consider the cost of the premiums, the services offered by the carrier, the carrier’s familiarity with Michigan law, and options such as a high deductible policy.
   
   
3. Develop a Relationship With Your Health Care Provider. In Michigan, an employer controls medical treatment for the first ten (10) days following a workplace injury. Providing high-quality medical care is not only the right thing to do, it makes financial sense. Identify an occupational medicine provider who is competent; who understands the physical and environmental requirements of all your jobs; and who shares your philosophy on managing workplace injuries. Invite the physician to tour your facility and observe your employees in action. This direct contact helps eliminate misunderstandings when treating an employee or returning the individual to restricted work. Additionally, if the employer already provides top-notch medical treatment, the employee has less motivation to switch doctors after the initial ten-day period.
   
   
4. Encourage Prompt Reporting. Prompt reporting of a workplace injury helps the employer to conduct a thorough investigation of the incident and implement timely corrective measures to prevent future injuries. Linking supervisor bonuses or department rewards to "no reported accidents" may result in delays or failure to report workplace accidents. Publish and enforce your policy for prompt reporting of workplace injuries. Quickly remedy any risks that the accident investigation uncovers.
   
   
5. Lead By Example. Demonstrate that safety starts at the top. A safety program that remains filed away in the Human Resources office benefits no one. Involve workers in designing, implementing, and continually refining safety policies. Embrace and evaluate all safety suggestions. Design a team approach involving supervisors and upper management along with employees working on the shop floor.

These are just a few of the many ways employers can help reduce and manage their workers’ compensation costs and improve workplace safety. By implementing some or all of them, your organization can reap rewards both in terms of financial savings and in terms of increased productivity and morale.

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Gerardyne M. Drozdowski, is an associate with Warner Norcross & Judd LLP and has represented numerous employers on workers’ compensation defense matters. She works on all phases of workers’ compensation issues within the workplace including preventative measures, rehabilitation and litigation. Geri may be reached in the Grand Rapids office at 616.752.2110. Warner Norcross & Judd is a full-service law firm with offices in Grand Rapids, Holland, Metro Detroit and Muskegon. Because each business situation is different, this information is intended for general information purposes only and is not intended to provide legal advice.