Nevada workers’ compensation costs do not have to be out of your control
Incidents are in decline but costs of an incident continue to rise
Nevada workers’ compensation, statistically, is a mix of good news and bad news. The good news is that we continue to see a decline in the number of Nevada workers’ compensation incidents as workplaces continue to become safer and safer. The bad news is the cost of a Nevada workers’ compensation incident skyrockets every year with the costs of health insurance and within the health care system. Depending on what side of the issue draws your focus, business managers can make widely different decisions in how to contain that cost but focusing on the duration of incidents seems to be much more effective than trying to contain the costs of the insurance.
Nevada workers’ compensation laws were established to protect workers and their families from an accident at work causing a financial catastrophe for the worker and his or her family. These laws protect workers who were at risk from hazardous conditions and mishaps in judgment. Not only are these laws effective at reducing such risk to the worker, but they are also effective at getting companies to become more aware of ways to conduct business and accomplish the job with less risk to workers.
Rate shopping is only the tip of the iceberg
There is only so much a company can do by rate shopping for workers’ compensation coverage. The real savings come from accident and injury prevention. Second, the reduction of the duration has the greatest effect on cost reduction. Management, in conjunction with a PEO such as CBR, can be making more careful review of worksites, training programs can be established to assure that workers have a healthy respect for the risk involved in certain operations and machinery. Teaching workers to follow a procedure can go a long way in avoiding mishaps. In addition, safety programs keep awareness of hazards on top-of-mind. Simply counting and posting days without accidents helps that awareness. CBR can assist you in the development and implementation of safety training programs.
The efforts make it possible for work environments to become safer resulting in fewer claims being filed. On the other hand, the costs per claim continue to climb so companies do not appreciate the benefit as much as it can because of those rising costs. According to the United States Department of Labor statistics, the loaded cost of the average Nevada employee is currently $28.87. Of that amount, $0.47 (1.6%) is attributed to workers’ compensation overhead. That seems like an insignificant amount, but multiplied by the number of employees covered runs to many millions of dollars and much of that has the potential to be useless waste.
A business can decrease its workers’ compensation exposure and costs
The reality of cost reduction is that it is challenging to accomplish. Cost reduction requires attention and commitment at the top levels of management. A PEO such as CBR can provide you with another pair of eyes focused on the attention and commitment required. There are some commonalities, though, among companies that have the most success at suppressing workers’ compensation costs. The top three items are:
- High emphasis on safety and prevention of accidents
- More open managerial styles and sharing of the decision-making process
- Consciously developing disability prevention and management strategies
In addition, high on the list is having the responsible manager get involved in the earliest stages of the claims process. That results in getting claims resolved sooner and the employee back to work earlier. Policing the impact of an incident after it has happened is key. In fact, getting an employee back on the job at the earliest possible date produces the greatest savings of all. Even while recuperating, a manager may be able to encourage an employee to come back and perform alternative duties in order to be productive rather than staying at home drawing down costly benefits. This takes good communication and encouragement with the employee, on the part of management, to encourage an earliest possible return to work.
Watch for signs of fraudulent claims
Fraudulent claims are going to happen somewhere along the line. The best action you can take is to investigate and pursue claims vigorously. Employees who stay off work for overly extended periods of time can negate all other efforts at cost control. Each workers’ compensation case is likely to cause an increase in your insurance premiums so keeping the numbers down helps a lot. Keep a lookout for telltale signs of possible fraudulent claims. Top among the signs are:
- New employees who report an injury very soon after starting the job
- Monday morning injuries where there are no witnesses
- Employees who are frequently switching health care providers hoping to stretch workers’ compensation payments
Suspected fraudulent activity needs to be reported to the insurance company.
There are a number of ways you can improve your picture concerning the cost of workers’ compensation claims. However, what we might consider the direct approach does not prove to be as effective as the indirect approaches. By getting involved early in the process, keeping in touch and encouraging the employees, maintaining honesty in the incident and aftermath, striving to reduce accidents and promote better health you can make significant inroads at returning those costs back to bottom line profits. It is an area where your HR outsourcing service such as CBR can help you monitor. Call us at our toll-free number, 888-700-8512, and we can discuss how CBR can assist you in these efforts.
For more information about how a Nevada PEO can help you with your Human Resources and hiring processes, call us at 888-700-8512, request a proposal or contact us.
