Avoiding premium increases in workers’ compensation insurance
By TOM CLEMENT, MRA VP of Operations & General Counsel
Workers’ compensation claims are an unfortunate reality for employers of all sizes. Most importantly, employers want their employees safe and free from any harm. This is easier for some types of jobs than others. Those working in construction or heavy manufacturing are more susceptible to injuries on the job than other types of work. The potential for harm exists in all professions.
Beyond keeping employees free from harm, employers also want to limit their workers’ compensation claims and return employees to work as soon as possible. Avoiding increased premium costs. This can be effectively accomplished through both the timely reporting of claims and the implementation of a return-to-work program.
Wage loss benefits in Michigan
In Michigan, wage loss benefits for employees begin after they are unable to work for seven days. If a disability lasts for at least 14 days, retroactive benefits for the first seven days are paid. Wage loss benefits continue as long as wage-earning capacity is reduced because of the disability. However, employees cannot continue to receive benefits if they have received and refused a reasonable job offer.
The wisest course of action for an employer is to report a workers’ compensation claim immediately upon learning of an employee’s disability. Assist the employee in getting the care they need. And explore “return to work” possibilities.
Report as soon as possible
Immediate reporting and assistance in receiving care are vital to a workers’ compensation claim because the seven-day clock for wage benefits starts at the time of the injury. A claim reporting delay typically results in immediate and retroactive payment of benefits. This hinders an employer or the insurance carrier’s ability to assess the validity of the claim. Plus, limits “return to work” possibilities.
Delayed claims may increase, sometimes dramatically, the cost of the claim. Plus, have a negative impact on the employer’s experience modification factor (“MOD”). The insurance industry use a MOD to calculate an insured’s loss experience. MOD fluctuations directly impact premium costs.
Failing to report claims in a timely fashion can make your premiums go up and impact your bottom line!
Have a Return to work program
Timely reporting is just one piece of the puzzle.
An employee injured in the course of their employment for seven days of work or more and truly unable to return to work receives benefits. Regardless of when the reporting occurs. Many employees can return to work in some capacity. Employers tend to benefit from establishing a return-to-work (RTW) program.
An RTW program should clearly state that its purpose is to get employees the care they need and back to work through temporary, transitional job duties through a modification of the original job or a different job altogether until they can return to their original position. A prime example would be a delivery driver who can no longer lift heavy packages. They may be able to take phone calls and schedule deliveries while they recover.
RTW programs demonstrate that you value your employees by getting them back in the workplace as soon as possible. It also reduces or eliminates benefits to be paid and helps to maintain a favorable MOD. For a sample return-to-work policy, please visit retailersinsurance.com.
Accidents happen
As much care as an employer takes to avoid workplace injuries, accidents happen. While you may not be able to guarantee against a claim, you can take steps that may have a positive impact on the workers’ compensation premium you pay.
Keeping workers’ compensation premiums from increasing is a constant challenge for business owners. So much so, we continue the conversation in this article. Our insurance experts address the top five common costly mistakes that also impact premiums.
