- More than just a cost-of-doing-business
- Involvement with each individual claim
- Lack of employer involvement creates 'problem' claims
- Attorneys not needed to provide benefits
- Premiums are driven by costs and reserves
- Ask the right questions at policy renewal
- Trust between employee and employer key element in reducing costs
INTRODUCTION
Many small to mid-size employers do not believe they can have an impact on the premiums they pay for Workers’ Compensation coverage. It is often viewed as just another liability cost of doing business. Some attempt to reduce those costs by ‘funding arrangements’, i.e. high deductibles, self-insurance, retrospective programs, captives, etc. While those may be important aspects to the liability analysis, individual claim costs and reserves are what drive the premiums.
How each claim is managed is critical to reducing costs. Employers who leave claims management to their insurance company miss the greatest opportunity of reducing costs. The average caseload of an insurance company adjuster is 150-175 claims. This kind of caseload impacts the time spent focusing on each claim. Often minor claims develop into ‘problem’ cases through neglect. If an employer does not take an active role in every accident, particularly right after an injury, avoidable costs will be incurred.
At P3 our onsite experience has identified numerous situations that, if gone unchecked, can cost a company thousands of dollars each year. Three examples are noted below:
- The situation : Accident reports often are forwarded to the insurance carrier unnecessarily. This can happen when an accident form is automatically sent to the insurance carrier when in fact the employee did not require medical attention and merely had an ‘incident’.
- Cost-to-the-Company : A minimum reserve may be set and the claim stays open for a period of 60-90 days. This can add up to thousands of dollars over a policy period.
- The situation : Employees may be directed to an inappropriate medical service provider such as their family physician or a chiropractor. An uninformed supervisor or workers’ compensation administrator may not know that under Workers’ Compensation law in Michigan the employer can direct the employee to the appropriate medical service provider for the first 10-days. This time period is critical. Working with reliable occupational medicine specialists ensures appropriate treatment of the work related injury from the onset.
- Cost-to-the-Company : The family physician doesn’t specialize in work related injuries. Communication with the employer about return to work options may not be as desirable as with the occupational medicine specialist selected who knows company requirements and is accustomed to working with employers. This can result in unnecessary lost time and expense.
- The situation : Lack of communication with the injured employee about the W.C. process leaves the employee feeling like the company does not care about their work related injury. The may not know what to expect or how to work with the company for their best outcome.
- Cost-to-the-Company : Communication breakdown with the employee can lead to feelings of distrust — from both the employee and the employer. This often results in litigated claims with associated legal fees and perhaps loss of earnings.
SOME OF WHAT WE DO
- Daily monitoring of all claims and ensure timely payment of benefits
- Active, frequent contact with employee, treating physicians and insurance company
- Review reserves set by insurance company and participate with policy renewal process
P3 can manage work related injuries from the time the injury occurs to the time the claim is submitted to the insurance carrier and through to resolution. The employee, supervisor, medical service provider and insurance adjuster can now have a resource, and an open line of communication, which ensures the claim progresses appropriately, and the employee returns to work as soon as possible.