Workers’ Compensation is Not Insurance

Too many employers believe that workers’ compensation is insurance. Premium rates, experience modifiers, claim reserves…this is not workers’ compensation. This is just a way to finance it.

Workers’ compensation was designed to ensure that injured employees have access to medical care and salary indemnification for work-related injuries. This system was established at a time when some employers maintained hazardous workplaces and abdicated their responsibilities to the injured worker.

Times have changed and our workplaces are much safer. But, many employers still neglect their duty to the injured worker when they do no more than purchase a workers’ compensation policy. Statute requires a system, not a policy.

So what goes into a workers’ compensation system?

1) A commitment by employers/managers to keep employees safe, health and engaged:
Employers must be committed to employee health and not outsource this responsibility to the medico-legal system. If a management team cannot make this commitment, efforts to reduce healthcare or insurance costs will be futile.

2) A system for engaging, reassuring and repairing an injured employee:
Employees need reassurance when coping with an injury and/or confronting the workers’ compensation system. Professionally managed Health and Wellness Rooms are part of successful workers’ compensation systems. Engaging employees early in the process means better outcomes for the employee and the employer. Actively managing the injury, recovery, and employee concerns will reduce costs and increase productivity.

3) A system for finance (insurance policy, self-insured, captive, etc.):
Finally, if an employer has made the commitment and developed a system to support the injured employee, financing becomes simple. Costs will trend lower, as will the experience modifier. Insurance costs will drop by focusing on the on the cost drivers, not the finer points of an insurance proposal.

Insurance companies offer a valuable service in financing the costs of workplace injuries, and they, as well as with third-party administrators, also offer value in combating fraud. However, the real value is to be found in caring for the injured workers, minimizing time away from work and preserving trust.

If you need help developing your workers’ compensation system, contact Proof:Positive. Your insurance policy will thank you.

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