Cutting Workers Compensation Insurance Costs in 2023 [Easy Ways to Save]
Workers compensation insurance provides essential protection for employers and employees but it comes at a price. Premiums, especially for high-risk industries, can represent a major business expense. Fortunately there are strategies companies can use to reduce their workers comp costs while still maintaining adequate coverage. Here are some easy ways businesses can save on their insurance premiums in 2023.
1. Focus on Workplace Safety
The most impactful way to lower workers comp costs is to reduce workplace injuries through safety initiatives. Some steps to take:
Identify and fix hazards that commonly cause accidents.
Implement or improve your safety program with policies and training.
Ensure employees use proper protective equipment and posture for tasks.
Provide ongoing safe workplace education.
Incentivize safety milestone achievements.
Fewer employee accidents and claims achieved through safety lowers premiums.
2. Start a Return to Work Program
Returning injured employees to work faster also reduces claims costs. Develop a formal return to work program with:
Light or modified duty options.
Gradual increase in duties during transition back.
Accommodations like workstation adjustments.
Regular follow-ups with workers post-injury.
The goal is to bring employees back once recovered enough while minimizing time away.
3. Review Classifications and Payroll Allocation
Make sure job classifications and payroll allocation used to calculate your premiums accurately reflect your business’s risk exposure. Identify any:
Incorrect classifications for work types.
Outdated classifications no longer applicable.
Changes in duties, technology or tools lowering risk.
Payroll wrongly assigned to high-risk codes rather than low-risk groups.
Correcting misalignments in classifications lowers your rate.
4. Analyze Losses for Preventability
Review past losses to identify preventable injuries that were due to safety lapses or risks that can be controlled better going forward. Highlight patterns like:
Repeat accident types
Failure to use protective gear
Lack of training on equipment
Poor workplace design
Finding and addressing these opportunities to prevent injuries also helps lower costs.
5, Raise Your Deductible
Ask your insurer about raising the deductible, which is the amount you pay out-of-pocket on claims before coverage kicks in. A higher deductible lowers your premiums but increases short-term costs for small claims. Find the optimal balance for cash flow.
6. Improve Claims Management
Strengthening your internal claims management improves results. Steps to take:
Report all claims promptly to the insurer.
Keep detailed injury reports and records.
Direct medical treatment to approved occupational physicians.
Stay updated on treatment plans and return to work timelines.
Document all claim details including contacts and payments.
Better claims oversight lowers case expenses.
7. Offer Employee Wellness Plans
Providing health screenings, smoking cessation plans, discount gym memberships, and other wellness benefits helps keep employees healthy and reduces injury claims. Some plans earn premium discounts.
8. Maintain Coverage Continuously
Gaps in workers comp coverage will damage your claims history and result in much higher premiums down the road. Renew policies on time without lapses to earn the benefits of being a long-term client.
9. Research Alternative Plans
Some states allow alternatives to standard workers comp policies like self-insurance or captive insurance programs for groups. Research options to see if they provide savings over regular plans for your business model and risks.
10. Work With Your Insurance Agent
Ask your insurance agent for a complete premium audit and ways to structure your policy optimally. An experienced agent can uncover savings you may be missing and ensure optimal classifications. Comparing options from multiple carriers also helps find the best rate.
11. Enroll in Safety Groups and Associations
Joining an industry safety group or association provides opportunities to learn best practices that prevent workplace accidents and access group discounts. Taking advantage of safety resources helps improve your claims record.
12. Implement a Drug-Free Workplace
Mandating a drug-free workplace and conducting drug tests reduces injuries and claims from workers impaired on the job. Some carriers provide discounts for having a strong substance abuse policy.
13. Use Telemedicine to Reduce Medical Costs
Using telemedicine services that allow employees to virtually consult with a doctor for minor injuries can reduce claim-related medical costs. Quick convenient virtual care gets employees back to work faster.
14. Establish a Safety Committee
Having a safety committee with representatives from management and staff identifies risks, solves problems collaboratively, and gets employees actively engaged in workplace health and safety. This helps sustain an injury-prevention mindset.
15. Offer Onsite or Near-Site Medical Clinics
For large employers, providing onsite injury treatment through an occupational medicine clinic, or contracting with an offsite nearby clinic, can reduce case expenses. This ensures fast quality care optimized for occupational health.
Conclusion
While some workers compensation costs can’t be avoided, proactive employers can take advantage of many avenues to meaningfully lower premiums while protecting their workers. Focusing on preventive measures, reducing time off, improving processes, tapping into discounts and resources, and seeking out the best insurance products for your business profile all enable cost savings that add up. With persistence and creativity, you can secure the coverage you need for employees while benefiting your bottom line.