Control and Reduce Workers Compensation Costs

How to Control and Reduce Workers Compensation Costs

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How to Control and Reduce Workers Compensation Costs

Review experience modification factor (mod) for accuracy

  • Calculated and assigned by NCCI
  • Include both paid and incurred losses. Reserves (Amount set aside to pay future claims) are included as well
  • The higher the losses, the higher the mod, which translates to higher premiums.
  • Agents and brokers should review to make sure that the former claims of their clients are closed. It is not uncommon for a closed claim to be left open on the insurance carrier’s records. If a closed claim has mistakenly been left open, then there will typically be additional reserves yet to be paid. If you can get the insurance carrier to show these claims as “closed”, that will remove those additional reserved loss funds from your mod calculation.

Review Rating Classifications

  • Agents and brokers should review the policies of their clients to ensure the proper WC code is being applied.
  • Reviewing the WC code classifications could possibly lead to re-classifying with a less expensive classification.
  • If the review leads to re-classifying with a more expensive class code, this will still save the company money in the long run. In the event of an injury, the class code will automatically be reviewed. If it turns out that the company was misclassified with a less expensive WC code, they will be charged additional premium for all the work that had been under the misclassified WC code, and potentially additional fines, penalties, and interest.
  • If a crew has multiple responsibilities, the higher risk is typically the default WC classification code for all work being done. For instance, a crew of workers that installs solar panels may install on the ground and on roofs. Since working on a roof has more risk than working on the ground, the WC code for roofs is more expensive. This will be the default WC class code for all work being done by this crew, both on the roof and ground. After reviewing the rating classification, the company might opt to divide this crew into two crews. By having one crew do only groundwork (With a cheaper WC code), and another crew only doing roof work (More expensive WC code), the company will save money.

Evaluate state fund options

  • Many times workers’ compensation insurance from the state fund costs less than insurance from the private carriers. This is because the expense loadings are not as great and the state funds usually pay no premium taxes.

Take bids every three to 4 years from agents and direct writers.

  • Compare bids premiums and coverage.

Pay small medical bills

  • It will benefit the company to pay any medical bills for minor injuries on their own, without using insurance. When this happens, the company should still fill out a claim report for their carrier, but mark it as “incident only”. This will protect the company in the event that the injury becomes more serious down the road. The cost benefit is that the insurance carrier will enter the claim as a “closed” claim, showing $0 as paid and reserved amount. Thus, it should not adversely affect the experience mod of the insured.

Request a private investigator if fraud is suspected

  • If a workers compensation claim is suspected as fraudulent, the client should alert the insurance broker or agent. A private investigator can help verify whether or not the injury matches the behavior of the injured worker.

Get certificates of insurance for subcontractors

  • Most states hold contractors liable for uninsured subcontractors. Be sure that any subs working on the site have adequate insurance.

Large contractors should consider self-insurance

  • If the company is paying more in insurance premiums than the cost of the claims, it is time to consider self-insurance.

Reducing workers compensation claims is a major factor in reducing workers compensation costs. For more specific instructions regarding how to reduce workers compensation claims, read https://eagleemployerservices.com/reduce-workers-compensation-claims/.

For other great articles regarding how to control and reduce workers compensation costs, visit:

How to Reduce Workers Compensation Claims

How to Reduce Workers Compensation Claims

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How to Reduce Workers Compensation Claims

The cost of workers compensation has a tremendous impact on a business, so it is critical for employers to know how to reduce workers compensation claims. The first thing  to understand is that there are two aspects of claim reduction: loss prevention, and loss control. Of course the biggest cost savings comes from loss prevention. Review the list of tips and strategies below to audit the claim management of the business in question. Asses which policies need to be implemented, or improved.  Be sure to incorporate employees in the company’s efforts to reduce workers compensation claims. Employees will be more productive and motivated towards the company’s efforts if they are involved.

Loss Prevention

Make Safety a priority.

  • Write a safety control program.
  • Incorporate safety rewards and discipline (Incentives should include safety accountability for supervisors).
  • Train supervisors how to respond to an injury, including first aid administration.
  • Regular safety meetings.
  • Educate employees on all equipment and job duties.
  • Incorporate a questionnaire of previous injuries to the new hire process. If the employee has a history of injuries, do not hire them.
  • Match people’s physical abilities with their job tasks.
  • Communicate the cost of workers compensation, and how claims can adversely hurt the company. Ask employees for ideas on how to improve work place safety (Hawthorne Studies).
  • Establish a drug free workplace policy (Include random drug tests, and test all new employees).
  • Properly maintain tools and equipment in properly working order.
  • Insist on a clean work environment. Clutter hinders productivity and increases risk.

Analyze Work Comp Claim History

  • Is there a pattern of losses from particular employees, departments, or work locations? Do more losses seem to occur during the care of a particular supervisor? Eliminate work place hazards that have contributed to a previous claim.

Loss Control

Claim Management

  • Provide quick medical attention. This can be the difference between a big and small claim.
  • Use a preferred medical provider, not a “Doc-in-the-box”.
  • Complete accident report. Include photographs, witnesses etc. Be quick, accurate and proactive.
  • Have the doctor test for drugs. A failed or refused drug test can be used to deny claim.
  • Return to work program. Incorporate light duty. If there is not anything for them to do, find something! This requires fewer benefits from insurance company, which would otherwise increase premiums. Light duty also saves money on additional labor that will be needed while the employee cannot work. Injured employees may not refuse light duty, if the request is reasonable. If they do, this can be a basis for the insurance company to drop any benefits being paid. Studies show that employees on light duty return to work faster than employees who are not offered light duty.
  • Stay in contact with injured employee.
  • Have management go with them to each doctor visit. Review prescriptions with the doctor, some prescriptions are expensive and not necessary.
  • Audit legal and medical bills for accuracy and appropriateness. Ensure that expenses are not being unreasonably inflated.

Investigate for Fraud

  • Hire an investigator.
  • Did the employee list previous injuries on new hire application? Does he/she have an extensive history of WC Claims? This can be an indication of fraud.

Consider partnering with a PEO

PEO’s have experts that can help with all of these processes. The co-employment relationship gives the PEO proper incentive to reduce claims, because employees are covered under their master WC policy. They want to maintain a good relationship with their WC carrier. Whereas a typical WC carrier can simply inflate the actual losses of the claim, and pass the expenses on to the client via increased WC rate. Reducing workers compensation claims are a great way to reduce workers compensation expenses. To learn how to get a workers compensation quote, read our article: http://eagleemployerservices.com/how-to-purchase-workers-compensation-insurance/. For any advice or assistance, email Mike@eagleemployerservices.com

How to Reduce Workers Compensation Claims | By Mike Smith

AMS Staff Leasing

AMS Staff Leasing

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AMS Staff Leasing

Looking for a quote from AMS Staff Leasing? Eagle Employer Services is proud to have been a broker for AMS Staff Leasing for almost 15 years. AMS Staff Leasing did officially dissolve at the beginning of this year (2014). Fortunately, we continue to offer the same great service with other great PEO providers. In particular, a brand new company that we represent has already transitioned many former AMS Staff Leasing clients. We have great PEO options that offer the same great services, specifically designed to help reduce workers compensation and payroll expenses for contractors. As a former broker for the AMS Staff Leasing, we are proud to continue offering these same great services at excellent rates. If you would like to know more about the current (Dissolved) status of AMS Staff Leasing, and/or would like to utilize the same great service from a similar PEO provider, give us a call at 214.952.8696 or email Mike@eagleemployerservices.com.

Payroll Services for Contractors

Work Comp & Payroll for Contractors

Services

  • Payroll administration, not just a check printing service
  • Tax payments and return filing using PEO employer identification number
  • Benefits plan enrollment and administration into PEO sponsored benefit plans
  • Workers Compensation policy administration and claims processing
  • Loss Control services including safety program design and implementation, drug testing policy, return-to-work and light duty program, employee incentive program and regular safety inspections.
  • Human Resources guidance, policy development, problem resolution, file maintenance, job descriptions, employee training, new-hire qualification and employee leave administration

Advantages to Employer

  • No annual WC premium, pay as you go.
  • Reduced administrative costs
  • Redirect focus towards core business
  • Access to Lower cost/higher quality employee benefits
  • Expert advice on compliance with employment-related laws
  • Competitive Workers Compensations rates via master policy of PEO
  • Retain the management of your workforce without administrative complexity

 

 

 

 

AMS Staff Leasing | Eagle Employer Services

 

How to outsource human resource management

How to Outsource Human Resource Management

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How to Outsource Human Resource Management

These 6 steps are designed to help companies decide if it would be cost-effective to outsource human resource management, and if so, how to do so.

Step 1:

Map out the current human resource management functions. List all the functions that the HR department provides, from employee recruitment to exit.

Ex. Recruitment & Selection, orientation, performance management, compensation and benefits, training, career development, succession planning, exits.

Step 2:

Identify areas of the human resource management operations that need to be implemented or improved. This will aid in deciding if the company should outsource human resource management, and help locate the right fit for the company’s needs.

Step 3:

Calculate the cost of the HR department. Also, keep the opportunity cost in mind. What is the core business of the company? Compare the amount of time and effort the company spends on income producing activities to the amount of time spent on human resource management. Compare the cost of the HR department to the cost of an HR outsourcing service. Remember that hiring an HR outsourcing service does not necessarily mean firing the current HR staff. Many HR outsourcing services can accommodate by hiring the current staff to implement and maintain the new HR outsourcing service. Or, many employers choose to re-direct HR employees to other income producing functions of the business, such as billing.

Step 4:

Learn about the available service options for the company’s needs. HR outsourcing comes in many forms. Some clients benefit the most by entering into a co-employment relationship with a human resource provider, such as with a PEO (Professional Employer Organization). Other clients benefit the most by utilizing an HRO (Human Resource Outsourcing) service.

Tip: If the PEO has better state unemployment rates, and also has better workers compensation rates, they will probably be a more cost-effective option. If the company looking to outsource HR currently has great SUTA and WC rates, then an HRO will probably be a better solution.

Step 5:

Find an expert representative or broker for an HR outsourcing service. Look for a broker that understands the specialized HR functions that are particular to the clients industry. The broker should possess analytical competence, and be able to identify cost-effective solutions for the client. If the broker has a number of successful implementations and client testimonials, this will be a favorable indicator of the broker’s competence.

Step 6:

Purchase and Implement. The new human resource management provider will help implement the outsourcing service. This will include timelines, resource allocation, communication, etc. A good service provider will provide a seamless transition that is cost-effective for clients.

If you would like a specialist to help outsource your human resource management, call 214.952.8696, or email mike@eagleemployerservices.com.

For more information regarding how human resource outsourcing services are able provide the same (Or better) services while saving clients’ money, read: http://eagleemployerservices.com/peo-model/.

Outsource Human Resource management | Eagle Employer Services

 

 

 

How to purchase workers compensation insurance

How to Purchase Workers Compensation Insurance

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How to Purchase Workers Compensation Insurance

Below are 7 simple steps regarding how to purchase workers compensation insurance. These steps will help business applicants get inside of the mind of an underwriter. Knowing why each step is needed will help applicants complete a submission in a way that is most likely to get their workers compensation application approved.

Step 1:

Write a detailed narrative of your company. Include information about products and/or services, your business location, mission statement, etc. A detailed description of the work you do will help the underwriter to assign the proper workers compensation classification code. If the underwriter is unsure about any workforce procedures, it is their job to automatically assume the higher risk class code. So, the more information the better! A website is a great resource to supplement your company narrative. However, before you complete any submissions, be sure your website reflects the same description that is being submitted in the narrative. Any contradictions between the written narrative and the company website can quickly result in a denied submission.

Step 2:

Write a detailed narrative of safety procedures. Here you will want to emphasize any safety procedures that you have in place, and how they have positively influenced the safety of your workforce and corporate culture. This is because a carrier will be more likely to accept your submission if they believe you have a safe workforce environment.

Step 3:

Obtain resumes for the key people in your business (This might only be you, the owner). You will want to put your best foot forward, and elaborate on your expertise in the same industry of which you are applying for a workers compensation policy. This is because experience and expertise in an industry is typically correlated with safety. For instance, it will be a red flag to an underwriter if an accountant is applying for a roofing work comp policy. If this is the case, the accountant must provide a resume for a key person who will be in charge of the roofing aspect of business.

Step 4:

Obtain a loss run detail report from your current workers compensation carrier. The underwriter will require 3-4 years of history. If you have not been business for that period of time, you will need to show evidence of when you started in business (Such as an LLC filing). If you have been operating for a period of time without a work comp policy, you will need to state that. In this scenario, you will need to provide a “No-loss” statement on your company letter head, which states you have not had any losses for that timeframe.  If you have had losses, you will need to specifically list them and the status of those claims. This is because the insurance carrier does not want to be liable for injuries that happened prior to you becoming their customer.

Step 5:

Get a copy of your last 2 or 3 quarterly 941 reports. When you get to the application process, they will want an estimated amount of payroll your company will be running. This report will help prove the accuracy of your estimation. By including items such as these that are not always required by an agent, you will be gaining the respect and trust of the underwriter.

Step 6:

If you have a favorable financial condition, provide documentation of your resources. This is because many business who cut corners on costs will also cut corners on safety. A strong financial condition is one more reason to convince an underwriter that you are a worthy applicant.

Step 7:

From here, the agent or broker has everything they need to complete your workers compensation submission. But, you will first want to find and insurance broker that specializes in your industry. This is because insurance companies always assume the worst with the unknown, especially when insuring risks they are unfamiliar with. Specialists utilize the law of large numbers, and are more capable of getting your company approved by evenly distributing the risk among a larger group of insured in your industry. You can find one by searching online, or by recommendations of those who you respect in your own industry. Look for a broker who wants to write your business, and wants to work for you. If the broker acts like your business is too small, or too complicated, then find another one. If they have that attitude during the underwriting processes, it certainly won’t improve after you are a customer. Look for a broker that sincerely cares for you and your business, and that you would like to work with. These brokers will be your best chance of getting approved for a workers compensation policy at the best possible rate, with the best possible service.

If you would like assistance in completing a workers compensation application, please contact us and we would be glad to help.

Purchase Workers Compensation Insurance | By Mike Smith

The Growing Burden of Employment

The Growing Burden of Employment

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In the last few decades, the growing burden of employment has been the driving force behind the growth of the employee leasing industry. Local, state and federal governments have created an incredible burden of employment and employee benefits regulations. Employee leasing solves this problem by shouldering much of the routine personnel work, payroll, and benefits administration. By outsourcing, businesses are enabled to decrease administrative burden and expense, while redirecting focus towards the product or service of their core business. Benefits include:

  • Relief from payroll and tax administration.
  • Simplified and streamlined workers compensation management.
  • A wide range of HR management solutions through a team of professionals.
  • Access to a comprehensive employee benefits packages.
  • Assistance to improve productivity and profitability.
the growing burden of employment

The Growing Burden of Employment

The Growing Burden of Employment | By Mike Smith