Next to payroll, workers compensation is one of the largest expenses for a staffing agency. Job related injuries drive up the cost of coverage. We have seen staffing agencies paying two and three times that of competitors simply due to claims. Claims eat up margins, requiring bill rate hikes, making you less competitive.
Most will agree safety is the best means to reduce claims. Nevertheless, how a claim is handled greatly affects its impact on future insurance premiums. To illustrate: Two identical injuries, occurring in the same state, billed by the same doctor, to the same insurance company, can have up to a seventy percent difference on the impact to your future insurance premiums.
Return To Work (RTW) Program
Some benefits of RTW programs include:
- Increased employee engagement: An engaged employee feels supported and wants to get back to work.
- Speeds return to full productivity: Staying active at work, even in a reduced capacity, speeds full recovery.
- Links to work: Employees remain connected to their workplace and are less likely to seek employment elsewhere, decreasing employee turnover and associated costs.
- Decreased disability (lost time) costs.
- Self-corrects claims abuse: In the rare case an employee is abusing the workers’ compensation system, a RTW program protects the employer. Such cases tend to move on, seeking less engaged employers.
If an employee returns to work within the first seven days after an injury, the impact to the experience modification, and therefore future workers compensation premium, is decreased by 70%. States vary, but that is how NCCI handles the math.
For example, we recently ran a scenario for one of our clients. If an employee has an injury that costs $10,000 but gets back to work in the second week, our client’s one year worker’s compensation premium increases $3,800. That’s $11,400 over three years just for that single claim. However, if the employee is able to return to work within seven days, even in a reduced capacity, because of the lower impact on the experience modification, the one year premium increases only $1,150. That’s $3,450 over three years. A seventy percent difference!
We encourage any staffing agency to consider adopting a return to work program. Don’t know where to start? We can help. We can provide RTW templates, customizable to your business needs.
Put our experience to work. We specialize in insuring staffing firms and are now licensed in all fifty states.
Contact Us with any questions.