14-point Workers’ Comp Annual Checkup That Can Protect You Against WorkComp Claims

As we head into the New Year, this is a perfect time to take a step back and look at your Workers’ Compensation program. By assessing its strengths and weaknesses, you create a blueprint of potential dangers that could easily result in higher insurance premiums.
To help you avoid higher premiums, we have put together a 14-point checklist to review to determine if you are doing all you can to safeguard your company and your employees:

1. Do you know your lowest possible Experience Modification Factor?Even if your Mod is low, working towards the lowest possible Mod is the best way to ensure long-term savings.
2. Have you reviewed your Injury and Illness Prevention Program (IIPP) recently?The IIPP should be a living document that is updated when new equipment or practices are introduced and changes occur with the company’s size or functions.
3. How effective is your hiring process?If injuries occurred shortly after hiring, the hiring and training process should be examined. Having a consistent process for background checks and medical exams help prevent hiring the wrong person for a job.
4.  When was the last supervisors’ training?Supervisors play a key role in the management of injuries as well as staff morale. Consistent training in both the functional and human relationship aspects of their jobs is essential to be sure they have the confidence and skills to create a high-performance culture within their team.
5.  How quickly are claims reported?If claims are not reported within 24-hours of the incident, there is work to be done.
6. If the accident investigation reveals measures that should be taken to prevent future incidents, how quickly are they addressed?The employers’ response to an injury sends a critical message to employees. In addition to a thorough investigative process, employers should have a response process in place – what are the options to resolve the problem, who is responsible for ensuring changes are made and implemented, and how is this communicated to employees.
7.  How many of your claims involved lost time?The percentage of claims that are lost time is another key metric in managing Workers’ Compensation expenses. A good target for lost time is no more than 20% – 25% of claims. Higher percentages are a red flag, signaling a problem.
8. How often are open claims and reserves reviewed?Excessive time lags in care or claims may indicate that a case can be spiraling out of control. At a minimum, open claims and reserves should be reviewed quarterly. How many of your claims are litigated?
   Ideally, a 5% litigation rate is very good, 10%-15% is good and anything over 20% should be considered a red flag and warrant further analysis.
9. Do injured employees hear regularly from their supervisor and receive payments on a timely basis?Injured employees who feel neglected or hopelessly lost in the system are fodder for hungry lawyers.
10.  Is your return to work program working properly?The sluggish economy and uncertainty over the sustainability of the recovery have put pressure on return to work programs. Examine your program to see if the jobs are meaningful, truly transitional, and meeting established metrics to return the injured employee to their original position in a timely fashion.
11.  Are you and your employees prepared for an OSHA visit?OSHA has an aggressive agenda. If it’s been awhile since you’ve done a walkthrough to identify potential problems, reviewed your recordkeeping training documentation, written safety, and health programs or discussed the procedure should an inspector appear, now is the time to do it.
12.  How effective are your medical cost controls?While state statutes differ with respect to the extent to which employers can direct injured workers to certain medical providers, the medical management of a Workers’ Comp claim is essential to reducing costs. Evaluate your relationships with medical providers and medical bill review processes to be sure they are working for you and your injured employee.
13. What have you done about wellness programs and how successful have they been?Wellness programs have been front and center in 2010. If you have one, what are the participation rates and the results? Are you monitoring the correct metrics? If you don’t have one, now is the time to explore the options.

Assessing your strengths and weaknesses will help you set priorities to ensure that your Workers’ Compensation program works effectively in 2011 and years beyond.

Kevin Ring is the Lead Workers’ Compensation Analyst for the Institute of WorkCompProfessionals, the Asheville, NCbased organization that trains insurance agents to help employers reduce Workers’ Compensation expenses. A licensed insurance agent, he leads workshops, analyzes Workers’ Comp programs and is the codeveloper of a Workers’ Comp software suite that helps insurance professionals in working with employers. He can be contacted at 8282740959 or kevin@workcompprofessionals.com.