Money saving tips for claims managementWritten by David Marchione 12 March 2009
In tough economic times, one of the hardest things to face as an employer is additional compensation costs. It is difficult enough to manage a business with a positive safety culture and a view of preventing accidents without having to pay additional premiums to the compensation board in the form of surcharges due to poor experience rating.
There are many factors that affect experience rating and the possibility that an employer will be required to pay additional premiums to the compensation board. One of the main factors is the ongoing cost in a compensation claim. These costs include payments for health care treatment and wage loss benefits. Of those, wage loss benefits represent the majority of the monies paid out in a claim.
It is true that the easiest way to save money and keep costs down is to prevent accidents from occurring in the first place. However, should a workplace accident occur, there are steps employers can take to try to mitigate the costs of a claim.
Early and safe return to work
When workers are off work following an injury and in receipt of wage loss benefits, the costs of the claim increases dramatically. Helping workers return to suitable duties should not be seen as punishment for the worker. Studies have shown that the longer someone is off work following an injury, the more difficult it is for them to return. Therefore, early and safe return to work (ESRTW) should be seen as beneficial to both the worker and the employer.
Involve the worker in the ESRTW process by asking them to help identify suitable duties that are within their functional abilities. It is rare that a worker will be completely disabled from working. In addition, it is more cost effective for the employer to accommodate a worker with needs for medical appointments and treatment than it is to have them off work completely.
If you experience difficulties with the ESRTW process, seek assistance from the compensation board. Often, they will be able to provide additional direction and advice. They may also be able to provide additional services, including reviews by ergonomic specialists or mediations in case of disputes.
Seek cost relief
Frequently, the compensation boards will relieve employers of all or a portion of the costs associated with a claim if there is evidence of a pre-existing condition that either caused the injury or prolonged the worker’s recovery from a work-related injury. This provision protects employers from bearing the full cost of claims where some of the contributing factors are beyond their control.
Compensation boards will often examine the impact of the pre-existing condition relative to the severity of any incident/accident that has occurred at the workplace. They will use this relationship to determine the amount of cost relief available.
If you are aware of any pre-existing medical conditions that a worker may have, any prior similar claims, or other relevant information, be sure to provide this information to the compensation board as soon as you become aware of it. In many instances the compensation board will proactively apply cost relief. If they have not, be sure to request it. As it is not available to all industries in all jurisdictions, your claims representative will confirm whether your organization is eligible for such relief.
Transfer of costs
If the injury to one of your workers was caused by the negligence of a third party, you may be able to apply to have the costs of the claim removed from your firm’s accident cost record. To enable the compensation board to transfer the costs of a claim, they must find that the third party was “negligent”. They will use the common law test for negligence to determine this.
Negligence is generally defined as “the failure to do, or not do, what a reasonable person would do, or not do, in the same or similar circumstances.” As an employer, you are required to provide the compensation board with sufficient information to support why the other party was negligent. The opposing party is generally given an opportunity to respond.
Based on the information gathered, the compensation board may apportion the costs of the claim to the parties deemed responsible for the injury. This apportionment may include complete removal of the costs from the accident employer, if the third party is deemed to have been entirely responsible for the incident.
Appeal adverse decisions
Employers should exercise their right to appeal decisions on claim entitlement, allowance or continuation of benefits, quantum of cost relief or cost transfer decisions. A successful appeal may result in substantial cost savings. It is important to choose when to appeal decisions, and only appeal those you feel would result in a favourable outcome.
By utilizing one or more of the tips above, employers can help minimize the cost impacts of claims. This, in turn, may result in avoiding paying additional premiums to the compensation board in the form of premium surcharges.
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Published in Legal Columns