Take Control of Your Workers’ Comp Costs Before Day One

Many business owners believe workers’ compensation costs are an uncontrollable expense. They are wrong. You have significant control over what you pay, and it starts long before an employee’s first day on the job.

Let’s look at a common scenario. A Certified WorkComp Advisor worked with a social services agency with over 300 employees. Their management was frustrated. Their workers’ comp premium had skyrocketed, driven by an Experience Mod (E-Mod) that had jumped to 1.85.

In simple terms, your E-Mod is a score that reflects your company’s safety record compared to others in your industry. A score of 1.00 is average. This agency’s 1.85 score meant they were paying an 85% surcharge on their premium. They felt the system was broken and didn’t know how to fix it.

Here is the straightforward, two-step process we used to get their costs under control.

Step 1: Audit Your Claim History for Errors

The first thing was to analyze the employer’s injury data from the past three years. Significant errors were found in their experience mod, including open claims that had already been closed and incorrect cost amounts for past injuries.

Mistakes like these directly inflate your E-Mod.

By identifying and correcting these errors with the insurance carrier, they immediately lowered their E-Mod by 16 points. This resulted in a direct premium refund of over $24,000.

Action Point: Your claim history influences your premium. Review it meticulously every year for errors.

Step 2: Implement a Smarter Hiring Process

Fixing past errors provides immediate relief, but preventing future injuries is the key to long-term savings. The most effective way to do this is to ensure you hire people who can safely perform the job’s essential functions.

This is accomplished with two critical tools:

• Conditional Job Offers: This is a formal job offer that is contingent upon the candidate being capable of performing the essential functions of the job.
• Post-Offer Physical Exams: This is not a general health screening. It is a medical exam designed specifically to determine if a candidate has the physical ability to perform the core tasks of the job they were hired for.

The value of this process was perfectly illustrated by one of the employer’s past claims. An employee sustained a major back injury while carrying a case of soda. The claim totaled $81,926, which cost the employer an estimated $26,000 in increased premiums over three years.

It was later discovered that the employee had a pre-existing back condition.

Because the agency had no pre-employment screening process, they were unaware of his physical limitations. Had they conducted a post-offer physical, they would have identified that he could not safely perform duties that involved lifting. They could have modified his responsibilities to protect him from injury.

This $81,926 claim was entirely preventable.

The Result: Lasting Control

By auditing past data and implementing a smarter hiring process, the employer received an immediate $24,000 refund. More importantly, they now have a system in place to prevent predictable and expensive injuries from happening in the future.

You are not powerless against rising workers’ compensation costs. Take control of your claim data and your hiring process.

Agents who want to help employers recover overpaid premium and prevent the next preventable claim will find tools and training at WorkCompProfessionals.com. Employers who want to audit their claim history and build a smarter hiring process can find practical guidance at ConquerCompCosts.com.