Cut Workers' Comp Costs BEFORE an Accident
One of the basic costs of doing business is insuring your workers against injury on the job. Escalating medical bills and other factors have caused Workers' Compensation insurance to increase dramatically. Explore options for reducing the cost of coverage with your insurance agents.
Here are some other ideas that can help put a lid on these costs:
BEFORE AN ACCIDENT
•Appoint someone to be in charge. Make sure your company benefits person has a good rapport with your insurance carrier. Take advantage of available education programs. For example, many local bar associations have Workers' Comp programs and in most cases, you don't have to be a lawyer to attend.
Workers' Comp Basics
•Rates are based on the industry, occupations involved, the size of the payroll, your company's safety record and other factors.
•Laws vary from state to state. The coverage is purchased from either a private insurance company or a state fund.
•Hire carefully. The Americans with Disabilities Act puts certain restrictions on the kind of questions you can pose when hiring someone. For instance, you can't ask someone if they filed prior Workers' Comp claims. You can inquire about whether they have any health problems that would prevent them from doing everything in the job description.
You can also ask an employee to take a pre-employment physical. Don't hesitate if the work is strenuous. If nothing else, this creates a baseline from which the extent of an injury can be determined.
•Make sure your business and employees are classified properly. You pay higher premiums for employees in hazardous jobs. Check to make sure that the nature of each staff member's duties is described accurately. If you misclassify office workers as performing a hazardous job, your premiums can increase.
•Look into whether you must pay based on overtime. In most states, premiums are based on a number of factors, including the size of your regular payroll. That means you may not have to include overtime in the payroll amounts used to calculate premiums. Check with your accountant for the rules in your state. Your accountant may also be able to help you locate Workers' Comp overcharges based on erroneous payroll amounts and classifications. If overcharges are found, your company can file a claim with the insurance company and collect a refund.
•Run a safe workplace. Know the whole range of safety issues in your line of business. Buy the right equipment, post the rules and enforce them. Discipline workers who don't cooperate.
•Hold employee-training sessions that include discussions of health and safety issues. These programs don't have to be lengthy and time-consuming. But schedule them often enough to make sure that new employees learn and old employees are reminded. Your insurer may offer these sessions free of charge.
•Explain to employees exactly what workers compensation insurance is and how it works. Some people think the state pays, so they don't feel guilty if they cheat the system. At training sessions, tell employees something like: "If you're injured on the job, we want to take care of you, but we're paying a lot of money for this insurance and like anything else, we have to make sure that we get our money's worth."
No matter how careful you are, accidents and injuries can still happen in your workplace. But by taking these precautions, you can keep Workers' Comp costs in line.