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WORKERS��� COMPENSATION Factors Driving Costs A rising accident rate may seem surprising, given the many safety programs instituted by employers in recent years. ���Workplaces are safer than they were 50 years ago,��� says Daniel C. Free, president and general counsel of Insurance Audit & Inspection, Indianapolis (insuranceaudit.com). Unfortunately, a number of factors have come together to reverse the favorable trend. Among them is a population that is getting older and heavier and thus subject to more injury. ���People used to retire in their 50s or 60s,��� says Free. ���Now they often stay in the workforce longer. Studies show that people who are older and overweight are more prone to slips and falls and lifting accidents, and take longer to heal.��� States are bringing more conditions under the workers��� comp umbrella. Two of the best ways to address rising costs include getting employees back to work as quickly as possible��� even if they return ���rst on part-time basis with adapted duties���and the second is keeping your practice focused on safety. ���The best thing you can do is take steps that will improve safety,��� says Free. ���That means training people in procedures that can reduce injuries, such as how to lift heavy boxes or utilize a computer keyboard safely. It may also mean purchasing safer equipment.��� A big component is getting your workforce engaged. ���Get people thinking about safety,��� says Free. ���It has to come from the top down. Make the employees feel you care about them. Every time there is an accident, enlist the help of your employees in ���guring out what caused it and see if it can be ���xed.��� Pay special attention to new workers who may not have absorbed all of the safety instructions they were given, or who have not honed the skills requisite to injury-free activity. Other cost drivers abound: Injured workers today are treated with more sophisticated medical procedures and more costly prescription drugs. And states are bringing more conditions under the workers��� comp umbrella. ���Some procedures, such as knee replacements, might not have been covered a few years ago but are now common,��� says Free. ���And a growing number of states are covering nonphysical injuries such as mental stress.��� These combined factors are shifting the core costs of workers��� comp. ���Historically, the indemnity portion of workers��� comp costs [the replacement of a portion of lost wages] was higher than the medical portion,��� says Free. ���Now the reverse is true: Rising medical costs are driving the increase in workers��� compensation premiums.��� Workplace injuries lead to increased workers��� comp premiums because medical expenses affect your practice���s experience modi���cation rating, or ���x-mod��� for short. If you experience higher than average claims, your premiums will increase. The converse is also true. Generally speaking, smaller employers who pay less than $5,000 in annual premiums for three years running are exempted from x-mod calculations. But the threshold and rules vary by state. Even exempted employers will bene���t from low accident rates because more employees will be productively participating in the workplace rather than recovering from accidents at home. ���Your employees are your most important business asset,��� says Free. ���You can replace computers if you have to. But your employees are hand-picked.��� 44 MARCH/APRIL 2013 | MedEsthetics Establish safety groups that bring employees and managers together so they will become more cognizant of good practices. And explain how a safe work record contributes to lower workers��� compensation premiums. Incentive programs can also help. Establish ���nancial rewards for employees any time you go through a set period of time without injuries. A safe workplace is good for employees because it contributes to job retention. If you need help in establishing worker safety protocols, ���Most insurance carriers have trained safety and lossprevention professionals who will visit your workplace and make suggestions,��� says Free. ���They can help a lot.��� �� ISTOCKPHOTO.COM Controlling Costs