According to a recent report by the California Workers Compensation Insurance Rating Bureau (WCIRB), claim frequency in the Golden State increased 3 percent from 2010 to 2014, despite an 11 percent fall in claim frequency in most other states during the same period.
What’s driving the increase in claims?
For starters, California has seen more hiring in hazardous industries such as manufacturing and construction in recent years. That means more inexperienced workers on the job – and that translates into more claims. In fact, the WCIRB report shows that half of all injured workers in California in 2015 had fewer than two years on the job, compared with 41 percent in 2010.
Cumulative injury claims are also on the rise, accounting for almost 18 percent of California indemnity claims in 2014, up 11.8 percent since 2010. Smaller non-cumulative injury claims and late-reported indemnity claims have also continued to increase. And as reported in a May 2015 Insurance Journal article, the National Council on Compensation Insurance (NCCI) found that claim severity increased slightly more than inflation measures for indemnity and medical costs in 2014.
For California employers, it all adds up to some of the highest workers compensation costs in the nation.
Needless to say, there’s plenty of incentive to improve workplace safety and keep your workers’ compensation costs down. Here are some tips for achieving that:
- Hire smart. Your hiring practices are a crucial first line of defense. Make sure job descriptions are accurate and up to date, thoroughly screen all job applicants, and be alert to red flags such as prior complaints, poor performance, and prior workers’ comp claims.
- Create a culture of safety. Your workers’ comp costs are directly linked with the effectiveness of your safety initiatives. Have clear safety policies and procedures, and conduct employee training and ongoing instruction in safe work habits such as using personal protective equipment and good housekeeping practices. Make safety performance a part of employee reviews, and consider a safety incentive program. Help your employees own the safety process.
- Have a dedicated safety committee. A dedicated safety committee can play an invaluable role in safety training, workplace inspections, accident investigations, written safety programs, and helping you stay compliant with federal and state laws.
- Investigate workplace accidents immediately. By investigating early, you preserve crucial facts that could impact compensability of the claim, significantly decrease the likelihood of fraud, and help keep costs down.
- Aggressively attack medical costs. Medical treatment accounts for almost 60 percent of workers’ compensation costs, so you need a proactive strategy to attack these costs. Build relationships with quality network medical providers who have experience treating workplace injuries and dealing with the workers’ compensation process. Be organized about coordinating nurse case management, utilization reviews, and the pharmaceutical aspect of claims.
- Keep the lines open. The workers’ comp system can be stressful for injured workers, and when communication breaks down, many will instinctively hire an attorney. Keep the lines of communication open, keep everyone updated on claim developments, and keep the claim moving forward.
- Get them back to work. Severity is the real cost driver in workers’ compensation claims, so focus on getting every injured worker back on the job, through modified or transitional duty if needed.
It takes a firm commitment and constant vigilance, but these measures can significantly impact your workers’ compensation costs. And having the workers’ compensation experts at Republic Capital in your corner can help you protect your bottom line. Contact us to learn more.