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Suggestions for Maintaining Worker's Compensation Coverage without Losing the Shirt off Your Back

Undoubtedly, one of the major goals of any employer is to make a profit. Sometimes, it may become tempting to cut corners in order to make more money. One thing that should never be sacrificed is workers' compensation insurance coverage. Given the price that many employers must pay for workers' compensation premiums, is there any way that they can keep the costs down? You bet. Here are ten of them.

Check Your Policy for Accuracy

If you are a very small employer, check the number of individuals on your payroll. Many states have an exception for employers who have less than a certain number of employees (usually 3 or 5). These very small employers are not required to carry workers' compensation insurance. If you have recently had an employee or two leave your employ, it is possible that you could now qualify for the exception.
Review your payroll. Has overtime been included in your calculations for purposes of computing your premium? Some states allow workers' compensation premiums to be calculated on regular payroll figures, excluding overtime. If overtime has been included in your premium calculation, ask if it can be removed. The less payroll you have, the less your premium will be.
Confirm that your experience rating is correct. Employers who pay more then $5,000 per year in workers' compensation premiums automatically receive an experience rating which compares their claims history to the claims histories of other firms within the same industry. The more claims you have, when compared to the industry as a whole, the more risky you are considered to insure and the higher your premiums go. Make sure that your premium has been correctly calculated.
Ensure that you are classified as the right type of employer or employment field. Employers who have heavy machinery or hazardous materials in their everyday workplace will likely have a higher premium than employers who have employees who work only with telephones and computers. Make sure that your premium is being calculated under the right classification for both the type of work you perform and the number of employees you have in "high-risk" positions.

Consider Some Changes

If you are a participant in an assigned-risk pool, gather information on how much your premium would be if you were not a participant. Many times, the premiums that are charged in pools are higher than the premiums that individuals businesses are charged. If your premiums would be lower outside of the pool, consider taking steps to head off on your own. This may take some time to accomplish, particularly if you have been placed in the pool due to your claims history. You may have to show that your workplace is now a lot safer than it was at the time you got pushed into the pool.
Do some research and consider whether self-insurance might be right for your business. Generally, in order to be self-insured you have to have a large workforce and be able to show that you are clearly solvent. Self-insurance is not a good solution for every employer, and it is not allowed in every jurisdiction, but it might be right for you; however, since the risks involved in self-insurance can be substantial prior consultation with legal counsel is recommended.
If you are not already, consider whether you want to pay a deductible toward worker's compensation coverage. A number of states allow employers to reduce their premiums through the payment of deductibles.
Consider whether you want to use managed medical care, such as an HMO, to treat workers injured under your employer. The majority of states allow managed medical care providers to handle workers' compensation claims. While you may not win the hearts of your employees by switching to managed care, you will save money in insurance costs.

Help Your Employees Help You

Return your injured workers to work as soon as possible. The longer injured employees sit at home or in therapy recuperating, the more money your insurance company is paying them. Of course, no employee can be forced to return to work before he or she is physically ready. However, they may be able to work in a different position, or a light-duty job, if they cannot return to their pre-injury employment.

Make Safety a Top Priority

Get serious about safety. Initiate safety programs and protocols to try to, as much as possible, prevent workplace injuries. The fewer claims you have, the lower your premiums will be. Consider rewarding employees for reduced accident experiences. It may be cheaper then paying higher premiums.

Education and Lobbying Efforts

Since Workers' Compensation is a protection created by state government, a business owner needs to educate and lobby its elected officials with regard to possible reforms to workers' comp laws that could influence spiraling costs in a positive manner. Joining other similarly situated business owners to educate and lobby may be the most effective approach.

DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.