When a worker gets injured on the job, it can cause a ripple effect throughout the company. The worker may need medical care and could even miss a substantial amount of time at work. As a consequence, too, the company could face higher workers’ compensation premiums due to the claim.
“One of the biggest expenses that a staffing company with adverse claims history has is probably workers’ compensation,” says Peter Lindmark, vice president at HRH in Tampa Bay. “It is the largest expense outside of employee benefits. It’s something you have to keep a close eye on.”
Smart Business talked to Lindmark about the importance of staying in contact with injured workers and bringing them back to the work place as soon as possible.
Do high-risk companies need to be creative?
With workers’ compensation — particularly if the company pays $1 million or more each year in premiums — we suggest looking at alternative risk financing, with features such as a $250,000 or higher deductible, depending on the company’s claims history and premium.
When you have skin in the game where you are paying the first $250,000 of each claim, you take ownership of the costs and try hard to let employees know that you are truly interested in their recovery and want to get them back to work. There is good reason for this today.
The injured employee at home feeling neglected can be influenced by all sorts of marketing on television. The employee may seek relief through the aid of an attorney or other legal advice — which is his or her right, of course. Things can get complicated fast, and the claim and related expenses can grow beyond where they might have with more attention by the employer. From a cost standpoint, you will find yourself at a much higher level than your competition, making it very hard to compete in the marketplace.
Are certain clients higher risks than others?
Some occupations have higher injury rates than others, of course. An office worker isn’t nearly as likely to fall from a roof as a roofer. Staffing companies have learned, some the hard way, that they must diligently control the activities of their employees while at a customer’s site.
That control should be formalized in their customer contracts, too. Some go so far as to inspect the prospective customer’s site or sites before deciding to do business, and perform surprise inspections afterward.
How can companies paying high premiums save money?
We visit a company and make an assessment. The first thing we want to do is identify where the claims are coming from and what can be done to stop them.
Many times, a company that has gotten to that point doesn’t have a full-time person who is daily making calls to or visiting the injured worker, or is talking to the managers where the losses occur, or is trying to close any open cases.
As companies grow larger, there is always a learning curve. Once employers see the company being adversely effected by the claims, they are usually willing to do what is reasonably necessary to correct the situation. And when their actions are validated by lower premiums going forward, they usually stick with it.
Is fraud a problem?
I had a staffing company where an employee went up to someone he thought was another employee and told him he planned to file a claim and get a large settlement. The other employee was actually the president. The point is, fraud happens all the time.
That’s why you need someone watching the claims and contacting the employee on the day of the accident, talking to witnesses at the scene of the accident, and making sure the victim isn’t being manipulated by an outside source to stay away from work longer than necessary.
PETER LINDMARK is vice president at HRH in Tampa Bay. Reach him at (813) 261-7971 or [email protected].
