Managing Workers Compensation Costs and Loss Control in the Workplace

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Managing Workers

’

Compensation Costs and Loss

Control in the Workplace

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Managing Workers

’

Compensation Costs and Loss

Control in the Workplace

Presented by: Denise Moore, CIC

Association Programs Director Alicia Piecuch, CSP

Loss Prevention

Cia Hart, AIC, CPDM

Workers’ Compensation Claims

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§ National Council on Compensation Insurance (NCCI)

submitted Item E-1402 for state regulatory approval. The changes will go into effect January 1, 2013.

§ One of the changes that will impact us all:

– Increase in the split point calculation

Experience Rating Changes

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§ Experience rating uses a split rating approach to reflect frequency and severity of losses

– Amount up to $5K is primary and reflects frequency.

Primary losses are given full weight in experience rating formula.

– Amount over $5K is excess and reflects severity.

Excess losses are only given partial weight in formula.

What is Experience Rating

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§ The current split point of $5,000 has been in place

for over 20 years

§ Indications are that the split point should be

increased to $15,000. This is not surprising since

the average cost of a claim has tripled since the last split point update.

Experience Rating Split Point

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Changes in Average Claim Cost

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§ Effective on the loss cost/rate effective date for each

state beginning with 1/1/13 filings

§ Transition program will phase in the split point

change

– First year the split point will be increased to $10,000

– Following year, the split point will increase to $13,500

– Third year, the split point will be increased to $15,000

plus 2 years of inflation adjustment (rounded to the nearest $500)

Timeline for Changes

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When the split point is increased from 5K to 10K:

§ Overall, the experience rating changes will be

revenue neutral

§ In general, experience credits will become larger and

experience debits will become larger

§ There will be exceptions to the above, especially when

the mod is near 1.00

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§ Changes outlined in Item Filing E-1402 will be

implemented beginning with state rate filings effective on and after January 1, 2013

§ Change is premium neutral

§ Generally, employers with favorable loss experience will

receive larger credits

§ Generally, employers with less favorable loss

experience will receive larger debits

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§ Frequent OSHA penalties

§ Major workers’_{compensation loss sources}

§ Common controls for each major loss source

§ Loss prevention basics

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§ Hazard Communication Standard

§ Requirements for safe walking and

working surfaces (slips/trips/falls)

§ Provision and use of personal protective equipment

§ Electrical

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§ Floor surface quality

§ Floor cleaning products

adequate to do the job

§ Train employees on

proper floor care

§ Clean as you go policy

§ Slip resistant shoes

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§ What lifting, carrying, bending, rotating tasks are your employees performing?

§ Restocking

§ How are heavy items stored?

§ Are employees trained on

proper lifting techniques?

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§ Fingers in safe

§ Equipment

§ Falling boxes or objects

§ Employees running into

each other

§ Doors opening into others

Struck By, Against or Caught Between Objects

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§ Stairs, ramps, inclines, ladders

§ Can elevation changes

be avoided?

§ Anything over ¼ inch

is a trip hazard

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§ Cameras, security guards, police presence

§ Background and reference checks on all hires

§ Opening and closing procedures

§ Cash handling procedures

§ Management training

§ Accountability

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§ Develop written safety program

– New employee training

– Refresher training

§ Active safety committee

§ Regular workplace inspections

– Documented

§ Effective accident investigation

– Corrective actions taken

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Controlling the Case ─ After a Claim

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§  4.1 million employees sustain an occupational injury or

illness each year

§  80 million workdays are lost annually, costing businesses

over $20 billion annually

§  There is a direct correlation between the number of time loss

days and the medical cost incurred – get workers back to work as soon as possible

§  Frequent and ongoing contact – employer communication

Controlling the Case After a Claim Happens

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Investigate the circumstances – from loss prevention and containment perspective

§ Take immediate remedial action to prevent further or

addition injury

§ Talk to witnesses; consider having them put observations

in writing

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Report new claims immediately to insurer

§  Enables carrier to begin management immediately

§  Reporting does not constitute claim acceptance or

agreement with facts as stated by employee

§  Failure to allow employee to file a claim can result in

penalties

§  Determine if worker needs emergency medical care

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Remain in regular contact with employee who misses time from work

§  Preserves the relationship between employer/employee

§  Provide transitional work opportunities to employees who

cannot return immediately to their regular job

§  Participate actively in return to work process

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Being proactive about maintaining a safe workplace and returning employees to work after an injury will help you control your costs from work-place incidents

Questions?

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