Workers’ compensation claims can be affected by several risk factors. These risks can trend up or down or stay at their current level. The direction of the risk trend will determine the level of influence each factor has on how much compensation an employee claims, and whether the claim will be paid.
Five of the most pertinent trends affecting workers’ compensation claims are outlined below.
1. DISABLING INJURIES
Injuries can cause temporary or permanent disabilities, which cause lesser or greater financial strain to their employers. The more serious an injury is, the more medical expenses will be incurred, and the longer the individual will be off work—both of which can mean higher compensation payouts. In addition, while a staff member is recovering from a temporary injury, another worker may have to be hired to perform their duties, thus adding another item to the company’s bill.
Just as there is a federal minimum wage but many states set their own, higher minimum level, the length of time for compensation due to disabilities varies from state to state. Business owners need to check the legislation in their state carefully, since in some cases, permanent disability compensation can continue until, or even beyond, retirement age. This can become very costly, meaning that it is in the best interests of executives to foster a workplace safety culture.
Comorbidities increase the complexity of compensation claims since it can be difficult to determine the impact that the pre-existing condition had on the claimant’s current condition. Since so many United States workers suffer from chronic illnesses, making this determination is understandably a top priority for employers and insurance carriers.
In cases where comorbidities can’t be teased out of the total payout, they can drive the compensation amount up considerably by pushing up medical and rehabilitation expenses. The time an individual takes to recuperate in such situations will also probably be longer, incurring more costs in the form of greater payouts and temporary workers’ wages.
3. MENTAL HEALTH
Mental health challenges are the third most expensive health issues in the United States, coming in behind cancer and heart disease. In terms of the previously discussed issue of comorbidities, if the pre-existing condition is psychological, it can delay healing and prevent an individual’s active participation in their recovery, thereby prolonging the time off work and inflating the compensation claim.
The current coronavirus pandemic is affecting almost every area of life, from executives adjusting corporate deals to parents home schooling their children. The impact is seen in worker’s compensation, too, and the risk is trending upward.
For employees who are not working from home, such as those in distribution, retail, construction and, crucially, health care, there is an increased risk of contracting COVID-19 on the job. At the same time, social distancing measures make certain physical tasks much more challenging and increase the risk of accidents and injury.
Existing claims may not get attention for months since most states and some private workers’ compensation board offices have been closed to the public during lockdown. When normal activities resume, these offices will undoubtedly need to deal with huge backlogs, which will delay settlement of coronavirus-related cases even more.
Another issue that business leaders need to consider during this time is fraud. Since many people have been furloughed or let go completely and are facing reduced salaries or no income at all, claiming compensation can seem like a viable way of getting the funds they need. Careful investigations into each submission will need to be done, which will cost additional time and money.
5. RETURN TO WORK PROGRAMS
Return to work programs are important for the economic health of a company, as well as the physical and mental health of employees. The longer someone stays away from their job, the more difficult they find it to return, and the transitional programs can go a long way toward facilitating this process. Having a skilled staff member on-site, even if they are just guiding their temporary replacements, is also valuable. In addition, individuals who feel productive are less likely to experience depression.
Finally, by preemptively working with brokers and insurance providers to create well-designed return-to-work programs, employers can reduce the amount they spend on compensation insurance. In the long run, it’s possible to save a substantial amount.
This is a clear illustration of how effective planning can minimize the impact of occupational injury and illness. From putting effective accident response plans in place to collaborating on return to work plans, there are several actions that business owners can take.
Source: Construction Executive