Workers’ Comp Cost Control

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Workers’ Comp Cost Control

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Light-duty and transitional assignments can help you save

No one likes it when workers are sidelined by an on-the-job injury. Workers miss their full paychecks, and employers lose productivity. What’s more, every day they’re out can affect your Workers’ Compensation experience modification (MOD), which can increase your premiums. And it impacts your OSHA Total Recordable Incident Rate (TRIR) and your Days Away/Restricted Transfer (DART) numbers, which can hurt your eligibility to pre-qualify for bids.

You do have options, though. You can provide full pay to an injured worker who takes on a light-duty assignment or transitional work with a nonprofit. This allows the worker to return to full pay sooner, and it can reduce the effect of the incident on your MOD and DART numbers.

Nonprofit assignments reduce lost time
More and more carriers are using third-party vendors to arrange for nonprofit assignments injured workers can do before they return to their usual work. For example, they may partner with an organization like Goodwill Industries where workers can take on clothing sorting, donation receiving and cash register duties. This isn’t a new concept, but we’re seeing wider acceptance – even among some unions.

While this kind of transition plan often works well, it sometimes fails. A surly worker in these settings won’t be much help, and you could hurt your company’s reputation, along with your chances of partnering with that nonprofit for future assignments. It’s important to assess the worker’s readiness and attitude about doing nonprofit work.

Other options
You also can choose to provide full pay while a recovering employee does a part-time assignment at your own worksite. This helps prevent a lost-time claim and reduces the impact on your MOD. It’s one way to add some productivity to your company and help the employee transition. Employees who work part-time during their recovery are more likely to return successfully at the same capacity and are less likely to file a lawsuit.

Keep in mind that once you pay any lost-time benefit outside the waiting period – even $1 – the claim is categorized as a lost-time claim, and it figures into the MOD at 100% of the medical and indemnity paid on the claim.

Benefit usually exceeds cost
It may feel counterintuitive to pay your worker at 100% of their pre-injury rate while they’re working at a nonprofit or only working part-time. But the employer typically comes out ahead. If you can keep an incident at a medical only level and avoid lost time, you may get a credit in your MOD calculation. Without lost time, medical claims go into the calculation at 30 cents on the dollar in most jurisdictions.

Communication is critical to success
Successfully managing Worker’s Comp claims requires a lot of communication between the employer and the employee. Any underlying adversarial feelings will often surface during this stressful time.

In the case of transitional work, the employer plays an important role in helping the employee understand the value of the nonprofit or part-time assignment – 100% compensation vs. the disability wage replacement, along with a less physically demanding job. When employees feel you care, they’re more likely to go along with the plan.

This communication needs to continue throughout the transitional assignment – and even more so when there is no transitional assignment. It’s best when the communication:

  • Comes from the direct supervisor in person or with periodic telephone calls
  • Is reinforced by a call or two from higher levels of management
  • Relays concern and caring
  • Does not pressure the employee to come back to work early

Pre-incident education helps, too
It also helps to educate employees before incidents occur. Employees who know they won’t get off completely when they’re injured are more likely to go along with these plans. So, include your transitional work plans in your toolbox talks, safety meetings or employee newsletters and flyers.

For more information on these options, talk with your broker or insurance carrier.

By Steve Edwards, Claims Department Manager

See also:
Drug Testing in 2019: OSHA’s Latest Guidance and Medical Marijuana Tips

3 Ways To Reduce Your Workers’ Comp Claims

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