Strategies to Contain Workers’
Compensation Costs and Increase Profits
Presenters:
John Hibben, ARM, Loss Control Director Everest National Ins. Co.
John.hibben@everestre.com Andrea Hiltbrunner, Claims Director, Everest National Ins. Co.
Andrea.hiltbrunner@everestre.com Hosted by:
Steve Thompson, ARM, COSS Aspen Risk Management Group, Inc. sthompson@aspenrmg.com
DISCLAIMER
The information presented in this material has been developed from sources believed to be reliable. It is presented for informational purposes only and should not be constructed as legal, professional or business advice.
Everest National Insurance Company and its affiliates accepts no responsibility for the accuracy or completeness of this material. It makes no representations or warranties of any kind herein and disclaims all such representations and
warranties.
Neither Everest National Insurance Company or its affiliates will be liable for any damages alleged to be caused by the information contained herein. It
recommends you consult with legal counsel and/or other professional persons before applying this material.
This information is solely for illustrative purposes and does not constitute a contract. Only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions.
Factors Impacting Your Premium
Your Business: Trade Contractor, Retail, Office, Manufacturer Your Payroll
Your Experience Modification Factor, determined from your claim history
< 1.00 better than expected >1.00 worse than expected
Your claim prevention and mitigation successes
Your Most Controllable Factors
Preventing Claims and Reducing Claim Costs
Effective Loss Prevention & Claim Mitigation Practices Your Insurance Premium is only a small portion of your Total Business Cost when work related incidents occur
Business Costs Arising from a Claim
Business CostsLost production & personnel resources Overtime
Hiring and training
Loss of customers / Delays in service, shipment or filling orders
Potential premium increase or inability to acquire coverage
Adverse reputation
Fines or punitive damages
Loss of income or inability to bid on jobs due to your incidence rate
Business Costs vs. Claim Costs
Total Claim Costs Business Costs
Your business costs as much as4 times greaterthan the cost of the claim.
A worker cuts his hand while moving some material. The laceration requires stitches. The worker dropped & damaged the material. You have your office support staff drive him to the medical center. Total lost time is 4 hrs. Total cost , paid by insurance is $600.
Estimating Your Business Costs for this $600 Injury
Activity Loss Cost
Office Time 4 hrs * Hourly Wage
First Aid Assistance .5 Hrs * Wages of Assisting Emp. Lost Production Value of Lost Hrs, Product/Services Damaged Material Cost to Repair / Replace
Vehicle Expenses Gas / Mileage
Your Solution
Preventing Claims Saves MONEY
An Effective Injury & Illness Prevention Program (IIPP)
Prevents Claims
Elements of An Effective IIPP Program
Management Leadership Workforce Participation Hazard Analyses
Hazard Prevention & Control Training and Education Monitoring Results
Hazard Prevention & Control Strategies
Transfer Risk Engineering Administrative Personal Protection Preventative Maintenance Inspections Emergency Preparedness Medical Programs
Training and Education
Job, Task Specific
Address anticipated hazards, safe work practices, rules, equipment, materials, & emergencies
New hires, newly assigned workers
When new changes, processes, materials or equipment are introduced When observations, near misses or claims indicate a need
Program Assessment and Monitoring
Compare Results Against Goals
Pre-Claim Measures: Training, Observations, Inspections & Participation
Containing Claim Costs
While Effective Safety Programs Prevent Claims…
When they Do Occur, The Best Strategy is to Contain
their Costs
Hire the Right Person for the Job
Educate Your Staff on Basic Workers’ Compensation Create Job Descriptions
Create a Return to Work Program Select Medical Clinic – Use MPN Clinic
Elements of an Effective Workers’
Costs of a Lost Time Claim:
oAverage cost of a CA lost time claim has reached record high $66,922 for 2011 per CA Workers’ Compensation Institute (CWCI) reporting
o$20,000 more than the average lost time costs in 2005 Hire the right person for the job:
oPre-placement physical testing
– Simple as a medical questionnaire or thorough as medical exam, drug/alcohol screen, functional testing
Ensure your management team understands workers’ compensation basics
o(www.dir.ca.gov/dwc/DWCPamphlets)
oTeach them the basics so employee questions are not answered by attorneys
oDisability payments up to 2/3 weekly wages, tax free oMedical treatment paid through the claim, employee should
not be billed
Job descriptions: (written or video)
oJob Description templates may be available from a medical clinic or the internet
oAssists hiring the right person for the position
oPhysicians need accurate description of job duties to evaluate whether a work injury has occurred
oPhysicians also need accurate description to evaluate return to work
Return to Work Program:
oIdentify opportunities where injured can return to work modifying existing job or performing different position
oSame job, limited lifting, less hours, more breaks oDifferent job such as inventory, answer phones, etc. oEnsure medical clinic is aware of modified availability Medical Clinic Selection :
oImplementation and use of Medical Provider Network (MPN) for CA
oUse of MPN physician means medical control, quality care, significant savings and quicker resolution/closure
oPreferred Provider Network for non-CA
oTour clinic, meet physicians, question wait time, does the staff contain interpreters, etc.
oProvide job descriptions to clinic, make aware of return to work program
Strategies to Contain Costs When an Injury Occurs
Timely reporting:
o Easy 800# to report your claim
oKnow your state’s rules when to report a new claim to avoid penalties
oCA Labor Code 5401 requires within one working day of receiving notice or knowledge of injury… the employer shall provide a claim form to the injured employee.
oKnowledge of injury from any source on the part of the employer oWithin one working day after claim form received by employee,
must provide medical care
oIf liability is not denied within 90 days after claim form is filed, injury presumed compensable.
oTimely reporting is proven to reduce lost time days, decrease claim costs overall, decrease litigation and quicken recovery
oWhen claims are reported beyond three weeks, studies have shown significant cost increases by as much as 29%
oWhen claims are reported beyond 11 days, studies have shown a 29% increase in litigation
oImmediately report all injuries, including those you refute, so the best investigation and defense may be conducted
oCommunicate all known facts at time of reporting and as claim proceeds
Timely Investigation:
oThoroughly investigate all injuries to include injured worker/ witness statements, take photographs, preserve evidence while information is “fresh” oAny third party responsible for injury?
oEquipment failure, machine breakdown, building owner, third party cleaning/service company, etc.
oProvide claim adjuster with all information gathered
New Claim is Timely Reported, What’s Next?
oEnsure initial treating physician has all facts of how injury occurred and reviews job description provided
oUnderstand the injured worker perception
oCommunicate, show you care, demonstrate understanding, discuss job security
oStudies have shown only 10% of workers’ compensation claims are fraudulent
oConvey injured worker issues/concerns to claim adjuster for assistance
oTeam with loss control and claim to prevent future injuries and mitigate costs
What Can You Do to Prevent Injury & Control
Claim Costs?
o
Create a safe work environment through an IIPP
program
o
Perform Hazard Prevention
o
Create goals and measure to succeed
o
Actively participate in the workers’ compensation
claim process by immediately reporting new
injuries, utilizing an MPN clinic, creating return to
work opportunities, utilizing job descriptions, etc.
Effective prevention of injury and cost containment
strategies succeed when we work as a team. Build
relationships with your medical providers, claim
adjusters and broker/agent. We are all here to help.
For More Information
Visit our web site at:www.everestregroup.com
Contact us via our web page at:
http://www.everestregroup.com/Home/ContactUs.aspx
Call us at (800) 529 - 1354
Polling Question # 1
Are you an Everest Policyholder?
Yes
No
Polling Question #2
How many of the below elements are in your IIPP Program? (check all that apply)
Management Leadership Accountability
Workforce Participation Hazard Analyses
Hazard Prevention & Control Training and Education Monitoring Results
Polling Question
What topics would you like to see in future Webinars (check all of interest)
Cost Containment Ideas Claim Handling Best Practices Safety & Health Topics
