7 Costly Workers' Comp Mistakes To AVOID! By Robert Elliott At Isnare.com Ezine Articles

Workers’ Compensation is not a fixed cost of doing business as many CEOs, CFOs and business owners think. It is actually a controllable expense. These seven mistakes employers make can drive workers’ compensation costs up as much as 20 percent to 50 percent. Learn how your company can avoid these seven very important mistakes.

Like all policies and program, the terms may need to be varied to comply with different state and federal laws. Make sure your corporate legal counsel reviews any policy or program before implementing it.

1.Hiring unqualified employees: Many employers fail to make sure new hires are qualified to perform safely the job for which they are hired. This is called lack of “job matching” and can cost a lot of money in the long term.

2.Letting workers stay out of work longer than needed: If an employee is healed on January 15, he or she should be back to work January 15 – not February 15 or June 15. It is important to have programs in place to monitor the progress of employees when they are out of work.

3.Having too many employees out of work for too long a time: Employees stay out of work when there are no post-injury procedures to bring them back to work quickly. They then risk becoming “psychologically disemployed,” thus making their return to work more difficult and remote. Workers who are out of work tend to want to stay out of work. Be prepared to investigate employees who stay out of work longer than the norm for their particular injury. Fraud is always a possibility.

4.Penny-wise/pound-foolish: Some employers won’t spend a few hundred dollars to send managers responsible for workers’ compensation to conferences and seminars where they could learn how to reduce workers’ comp costs and possibly save millions. Or they look for the least expensive claims administrator rather than the one who will provide the best quality claims handling.

5.Lack of understanding: Management doesn’t understand the real cost of workers’ compensation. With a $15,000 claim, if the profit margin is 8%, it takes $187,500 to replace it on the bottom line. Management may not know they can direct medical care in those states where it is permissible. Lack of understanding by adjusters about medical terminology can be costly. Injured employees may think an insurance company is paying the claim completely, with no impact on the employer.

6.Failure to communicate with injured employees: Attorneys, friends, and other injured employees communicate with injured employees. Employers must make sure they get your message first—starting before an injury even occurs.

7.Failure to monitor or coordinate medical care: No one is making sure a reasonable treatment plan is in place. For example, as long as any doctor says an employee cannot work, no one takes proactive steps to refute that position.

Don’t make the same mistakes many employers make! Invest in your workers’ compensation program.

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