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- 1. Work Comp- Effective Cost Management Jacksonville Spring Forum on Workers’ Compensation Topics May 3, 2011
- 2. Work Comp- Effective Cost Management Before a Claim Occurs After a Claim Occurs Work Comp Insurance and Other Indirect Costs
- 3. Before a Claim Occurs- Hiring Practices Where work comp claims start Employee selection Functional job descriptions Recruitment and Interviews Pre-employment background checks and FL DFS Claims Database Don’t buy a claim Cost vs. savings https://apps.fldfs.com/claimsweb
- 4. Before a Claim Occurs- Hiring Practices
- 5. Before a Claim Occurs- Hiring Practices Beyond our scope of discussion- ADA and Reasonable Accommodation Conditional offers of employment Post-offer, pre-employment physicals and medical questionnaires Helps with major contributing factor provision of FL work comp law- 51% related to on-the-job injury Consult with HR professional and attorney Job accommodation network http://askjan.org US EEOC www.eeoc.gov/policy/docs/preem p.html
- 6. Before a Claim Occurs- Hiring Practices Drug-Free Workplace 5% premium credit in FL, 7.5% in GA An Employer’s Guide to a Drug-Free Workplace http://www.myfloridacfo.com/wc/pdf/DFWPman.pdf Exclusion of indemnity payments Higher quality workforce = lower frequency of claims
- 7. Before a Claim Occurs- Hiring Practices Work Comp and non-work comp impacts National Institute on Drug Abuse Study found that drug using employees are: 2.5 times more likely to have absences of eight days or more 2.2 times more likely to request early dismissal or time off 3 times more likely to be late for work 5 times more likely to file a work comp claim
- 8. Before a Claim Occurs- Supervisor Training Employee communication and relationships Accident reporting and investigation procedures Timeliness of reporting Statutory- 7 days of notice, 24 hours of death
- 9. Before a Claim Occurs- Supervisor Training Incident/Accident report Causes Observations Documentation and witnesses
- 10. Before a Claim Occurs- Medical Provider Selection Selection of provider who works for you Partnership- understands and assists employers Proper employee assessments and effective, efficient treatment Stay at work/Return to work Board certified in occupational medicine Screening work Protocol and service expectations interview Facilities tours (theirs and yours)
- 11. Before a Claim Occurs- Safety and Health Environment Written safety manual 2% premium credit in FL Employee safety training and certifications Employee safety incentive programs Safety committee Make-up of committee Post accident reviews Causes of incidents/accidents Institute changes to prevent future incidents/accidents Ongoing assessments, inspections, checklists OSHA
- 12. Before a Claim Occurs- Safety and Health Environment OSHA PENALTY SCHEDULE Willful Minimum: $5,000 Maximum: $70,000 Repeated Maximum: $70,000 Serious, other than serious, or other Maximum: $7,000 specific violations Failure to abate Maximum $7,000 per day for each day violation continues beyond abatement date Violating posting requirements (failure to Maximum: $7,000 post OSHA poster, OSHA 300 Annual summary, citations, etc.) Failure to report fatality or catastrophic Maximum: $7,000 event within eight hours Providing advance notice of inspection $1,000 fine or up to six months in jail or both
- 13. After a Claim Occurs- Communication Specific personnel to manage cradle-to- grave process Direct employee for medical treatment and provide medical provider packet Employer authorization form Fitness for duty disposition form and copy of functional job description
- 14. After a Claim Occurs- Communication Report claim to carrier Manage file Employer Employee Adjuster Medical provider Agent
- 15. After a Claim Occurs- Stay at Work/Return to Work Stay at work Indemnification waiting period 7 days Retroactively paid if disability ≥ 21 days Return to work According to the 2009 National Return to Work Week press release: 4.1 million employees experience work-related injuries or illnesses in America each year. 1.1 million have lost work days as a result of their injury or illness. According to the Bureau of Labor Statistics (BLS), the average time away from work per injury was eight days. Employees who are off work for more than 16 consecutive weeks rarely return to work.
- 16. Another Study Stresses the Correlation Between Length of Disability and Chance of Returning to ANY Work WORKERS’ COMPENSATION Return to Work Projection 100% Chance of Returning to Any Work 75% 50% 25% 0% 6 months 12 months 18 months 24 months Time Away From Work
- 17. After a Claim Occurs- Stay at Work/Return to Work Employer Benefits Boosts morale Keeps injured employees productive Discourages abuse Reduces financial impact Provides a proactive approach to Cost Containment Employee Benefits Maintains full earning capacity Maintains productive mindset Prevents them from becoming dependent on a disability system Reinforces management’s commitment to employee’s well-being
- 18. Work Comp Insurance and Other Indirect Costs Direct Costs Proper class codes Rates- NCCI/FL Experience modification factor 3 oldest of last 4 years (2011- 2009, 2008, 2007) Medical only vs. indemnity- 70% credit State Date Actual Adjusted Mod w/o Impact 1 yr- yr- 2 yr- yr- 3 yr- Loss Loss Loss on Mod Prem Prem Prem Cost Cost Cost FL 10/1/06 $2,881 $2,881 1.1613 .0299 $1,473 $2,946 $4,419 FL 10/1/05 $5,544 $1,663 1.1739 .0173 $852 $1,704 $2,550 Frequency Severity Significant cost management opportunities
- 19. Work Comp Insurance and Other Indirect Costs Cost management alternatives Dividends- profit share Retrospective Rating Deductibles Self-insurance, captives, ART programs
- 20. Work Comp Insurance and Other Indirect Costs Service Costs TPA Safety and health Consulting services Actuarial services Others
- 21. Work Comp Insurance and Other Indirect Costs Indirect Costs- damage beneath the surface $1 $4 to $10
- 22. Work Comp Insurance and Other Indirect Costs Indirect costs not covered by insurance Lost efficiency of injured employees Impact on other employees at the accident site Cost of hiring and/or training replacements Overtime of other employees to make up for lost production Extra supervisory time Impacts an organization’s competitiveness
- 23. Work Comp Insurance and Other Indirect Costs Affect profitability Per OSHA Statistics: One $2,300 claim costs your company $12,650 Assume a 10% profit margin Additional sales required to offset one $2,300 claim: $126,500 The Real Cost of Accidents Can Be Measured and Controlled
- 24. Cecil W. Powell & Company www.cwpowellins.com Since 1935 Mission Statement To provide our clients the best possible product combined with unparalleled customer service while maintaining the highest standards of honesty and integrity, treating every one of our clients in the way we would like to be treated.
- 25. Thank You! For copies or additional information Barry Whilden, Director of Large Accounts bwhilden@cwpowellins.com | 904-256-0097 Brian Sivillo, ARM CIC CRM CWCA, Account Executive bsivillo@cwpowellins.com | 904-256-0095