Small businesses and workers' compensation

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					                                               —Reprinted with permission from PIA.—

Small businesses
and workers’ compensation
Help your customers reduce their WC costs

By Rebecca Shafer, J.D.

              any large employers have                                                                    avoid an on-the-job injury.
              programs to cut their                                                                       This may include proper
              workers’ compensation                                                                       lifting techniques; safe use
losses. Small employers are run                                                                            of machinery; and the right
more informally and rarely have                                                                              safety gear. But, safety
such programs—but the need is                                                                                 isn’t just for people doing
the same or even greater, as there’s                                                                          heavy lifting—computer
less room for financial error.                                                                                use can cause hand and
By getting educated in workers’                                                                               back problems too. Many
compensation management,                                                                                     insurance companies and
you can help your clients                                                                                  government agencies publish
reduce their costs and provide                                                                     free helpful pamphlets on safe work
valuable expertise that many                                                                 practices. Find out what your carriers and
other agents cannot.                                                                         other sources have available for insureds.
     A small-business owner                                                                        Someone must make sure the
often is the president, risk                                                                 worker understands safety requirements
manager, chief financial officer                                                             by observing the new employee in
and occasional janitor all rolled                                                            the performance of his or her job.
into one. That kind of do-it-                                                                 The supervisor should correct any
all owner—as well as key                                                                       activity that isn’t the safest way of
executives or managers in                                                                      doing the job immediately.
slightly larger businesses—                                                                        The employer should create a list
really needs someone with                                                                      of job-related safety standards for
expertise in reducing workers’                                                                each position. This may require safety
compensation costs.                                                                           standards research, but it is well worth
     The key cost-reduction steps                                                             the effort.
costs fall into two categories. The first is                                                       Training new employees is the start;
improving safety so your customers will                                                      promoting safe work habits is a never-
reduce worker accidents and injuries.                                                        ending process that must always be a top
The second category, which often is                                                          priority. Any time any employee, new or
ignored, is post-injury management.                                                          old, is observed acting in any manner
This means making sure every claim is                                                        that doesn’t comply with the safety
handled well and promptly. It involves         manager normally is the one who trains        program, he or she should be retrained
managing both medical treatment and            new employees on what to do in their          in safe practices.
the administration of the claim.               jobs. Acquaint yourself with your client’s          By some estimates, up to 50 percent
                                               key trainer/safety person.                    of workers’ compensation claims are
Safety and loss control                             That person should make sure             related to abuse of recreational drugs or
    Employers should continue to               the new employee understands how to           alcohol. Recommend that your clients
promote safety training and awareness.         perform the job in a safe manner and          institute a zero-tolerance policy. Anyone
The business owner or another senior           does everything he or she can do to           who’s impaired by drugs or alcohol while                                                                           Professional Insurance Agents/June 2010          21
                                              —Reprinted with permission from PIA.—

on the job should be terminated or            of this option. Provide your clients with      all the details about the incident that can
at least be warned in writing that if         a list of the insurer’s preferred workers’     be gathered. Contact information can
it ever happens again, it will result         compensation medical providers.                be put on employee lanyards, wallet cards
in immediate termination.                     The list should be posted in the break         or brochures.
                                              room and other places readily visible to             The more information the employer
Post-injury management                        all employees so they’ll know about the        provides to the insurance adjuster and to
     Safety is important, but it’s only       preferred medical facility to obtain initial   the state workers’ compensation board,
half of the equation. How the employer        medical care. Even in states that prohibit     the better. Advise your clients to keep
responds to an injury makes a crucial         the employer from selecting the provider,      a camera or a cell phone with a camera
difference. If the injured worked isn’t       in most states, it’s not against the law to    on hand so they can take pictures of the
treated right, resentment can fester and      suggest the best choices. However, this        accident scene. Employees should be
costs can soar out of control, especially     type of “soft-channeling” is prohibited in     required to write a signed statement of
if he or she hires a lawyer. As an agent,     a few states.                                  how the injury occurred. If any other
it behooves you, or one of your staff,              As a part of the drug-free workplace     employees witnessed the accident,
to become educated about post-injury          policy, the employer should require            they should be asked to write down
management. You don’t have to become          drug/alcohol tests, usually done at the        a detailed description of what they saw
a supreme expert, but you should know         time of the initial medical treatment.         and what happened.
enough to point your customers in the         If the employee wants to delay initial
right direction.                              treatment, the employer should insist the      Getting them back
                                              drug test be obtained the same day as
     Despite your best effort to prevent                                                     on the job
injuries, they still may happen, though       the accident. In most states, a workers’
                                                                                                  An effective return-to-work program
less often. What the employer does            compensation claim can be denied or
                                                                                             is essential. The availability of light-
after the injury occurs will have a           the benefits reduced if it’s proven that
                                                                                             duty work can prevent more expensive
major impact on future costs and              the employee was under the influence
                                                                                             temporary total disability claims—and
insurance premiums.                           of illicit drugs or alcohol. Drug testing
                                                                                             it’s more humane for the injured worker,
     The first thing is to ensure that        also gives the employer better leverage to
                                                                                             who can become productive again sooner.
the injured employee gets appropriate         terminate the offender if necessary.
                                                                                             The money the insurance company pays
medical treatment as soon as possible.              The business owner or manager must
                                                                                             out in temporary total disability benefits
Whenever possible, the medical provider       ensure that all employees know they
                                                                                             is factored into the employer’s premiums
should be skilled in treating occupational    must report any work-related injury as
                                                                                             for the next three or four years—so a
injuries and illnesses.                       soon as it happens, even on weekends
                                                                                             light-duty program has a real payback. A
     Some states allow employers              or night shifts. Provide all your clients
                                                                                             helpful tool that can help you determine
to select their medical provider,             with the First Report of Injury for your
                                                                                             the cost savings of a return-to-work
employers should take advantage               state. The form should be filled out with
                                                                                             program is a transitional-duty calculator,
                                                                                             an example of one can be found here:
                                                                                                  If the employee is not released to

       A good                                                                                return by the treating physician following

                                                                                             initial medical treatment, the employer
                                                                                             should contact the employee, the adjuster
                                                                                             and the medical provider. The employer
                                                                                             should let the three of them know that
                                                  is hard to find—                            he or she wants and needs the employee
                                                                                             back at work.
      That’s why PIA created the Agency Staffing Assistance Program.                               Flexibility is the key; the employer
      This award-winning, online member service continues to make                            should be willing to work with any work
      finding and keeping good employees a little easier.                                     restrictions the medical provider may
                                                                                             require. For instance, the doctor may
      Simply logon to, select “Resource Center,”                                 forbid any heavy lifting for three weeks.
      and click “Agency Staffing Assistance Program.”                                         The employer should find a job that
      Logon now to jump start your hiring process.                                           doesn’t require it.
                                                                                                  The employer should plan ahead
                                                                                             for the modified duty. Accommodations
                                                                                             can include assistance in lifting heavy
                                                                                             loads, providing a chair to accommodate

22     Professional Insurance Agents/June 2010                                                                 
                                                —Reprinted with permission from PIA.—

standing restrictions and so on. When the

                                                       E-mail at PIA
employee returns to work on modified
duty, the employer must be sure to
comply with the medical provider’s
restrictions. The worst thing would be for
the employee to re-injure him or herself                                     Each PIA department has its own e-mail address:
and be off the job even longer.
Stay on the case                                                                  
      Once the employer has reported the
claim to the carrier, the process shouldn’t
stop there. The employer and/or broker                                                      Conferences
should keep in touch with the adjuster                                            
and know what’s going on with the claim
if it involves time out of work.                                                            Creative Services
      The employer also should keep in
touch with the employee and find out
what his or her medical condition is and
when the employee is expected to be                                                         Education
back at work.                                                                     

Plan ahead                                                                                  Government and Industry Affairs
     If you wait until your clients                                               
have excessive or major workers’
compensation claims, you’ve waited too
long. Most small-business owners don’t                                                      Industry Resource Center
think a lot about workers’ compensation.                                          
By using the guidelines in this article,
you can help your customers prevent                                                         Member Services
injuries from occurring and to mitigate                                           
their cost when they do occur.

     Shafer, president of Amaxx Risk                                                        Publications
Solutions Inc., in Mansfield, Conn., has more                                     
than 20 years’ experience helping employers
reduce workers’ compensation costs.                                                         Spanish marketing materials
Amaxx sponsors the Workers’ Comp Kit                                              
The site includes a wealth of free                                                          Young Insurance Professionals
information about every aspect of
workers’ compensation cost control,
including an award-winning blog about
new developments. Shafer can be                                                             Please keep these addresses
contacted at                                                        handy to reach PIA electronically.
or (860) 786-8286.                                                                       Professional Insurance Agents/June 2010        23

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