PMA Study Says Mitigation, Work Return Programs Reduce WC Costs

NU Online News Service, May 12, 3:44 p.m. EDT

Choosing a financially strong carrier, striving to reduce workplace accidents and creating a formalized return-to-work program are some steps employers can take to control workers' compensation costs while also improving the process, PMA Companies said.

In a white paper titled "10 Workers' Compensation Considerations in Recessionary Times," Blue Bell, Pa.-based PMA, a provider of risk management solutions and services, said that "amid the rubble of a slumping economy, opportunities for organizations to reduce their workers' compensation costs and save money through savvy risk management practices remain."

Choosing a financially stable company with the right people in place is important, the paper said, noting that global, multibillion-dollar organizations that once seemed impregnable have experienced hardships in this recession.

Businesses should examine an insurer's/third-party administrator's experience in the industry, "its investment portfolio, its underwriting philosophy and its business growth," according to the paper. A broker can help in selecting the right company, the paper said.

For companies that have already implemented risk control measures resulting in safer work environments, the paper advised that now is not the time to cut those measures to save money.

With companies that have not implemented controls, the papers noted, "While money may be your concern today, consider what these measures achieve for your bottom line tomorrow and years down the road."

Establishing a return-to-work program allowing knowledgeable and experienced employees to get back to their companies as soon as possible after an injury can help save money by avoiding the need to hire temporary workers, the paper noted.

"Comprehensive return-to-work programs include established 'light duty' or 'modified duty' positions in all departments" if an injured worker is medically cleared to return to work but unable to perform his/her pre-injury job, according to the paper.

With the recession, PMA suggested some workers may "feel safer out of work receiving workers' comp benefits than being on the job--"and this psychological component could prolong their recovery."

The paper recommended that a claims administrator should follow a proven service model with programs in place to contain medical costs.

For example, the PMA said claim investigations should occur for even the simplest of claims, and an adjuster or claims professional should always be available to discuss claim details and answer questions from the client or injured worker.

Other considerations PMA suggested include:

o Consider the total cost of insurance ownership--looking beyond price to ensure a carrier has proper experience and support to serve the appropriate risk.

o Select the right solution for the company's needs.

o Look to build a true partnership--finding a carrier that will continue to work with its insureds throughout the coverage period.

o Know a bench of experts and leverage their expertise--a company should involve its relevant experts, such as risk managers and human resource managers, when considering workers' compensation programs.

o Hire the right people for the job.

o Examine the validity of workers' comp claims and injuries and know how to act on the invalid ones--ensure a carrier has a formal anti-fraud program staffed with claims investigation and legal professionals.