Bring Employees Back to Work Sooner and Save on Your Workers’ Comp Mod and Premiums

Posted in: Commercial Insurance

Over the last few years the indemnity portion of workers’ compensation claims has had a greater impact than the medical portion on insurance premiums. Indemnity is defined as the lost work time when an employee is out for a work-related injury. While medical expenses are typically non-negotiable, there is some flexibility for how you as the employer choose to handle the indemnity portion of the claim.

When an employee is injured on the job, oftentimes the assumption is that he or she should stay home and allow the workers’ comp policy to cover all of the lost work time, but there is another option to consider – bringing your employee back to work and putting him or her back on your payroll sooner.  Once an employee has been given clearance for light duty by their doctor, as the employer you can choose to bring them back to work. Your workers’ compensation insurance carrier will inquire whether they are going to continue paying for the lost work time or if you will be covering it by having the employee return to work. By choosing to have the employee return sooner, you could save your organization significant money rather than continuing to use your workers’ compensation insurance. The decision you make will also have an impact on your workers’ compensation premiums. The sooner the employee returns to work, the less the insurance carrier will be paying for the indemnity portion of the claim, which has the most influence on the worker’s comp insurance premium. This approach could also potentially reduce the impact on your company’s experience modification.

A question that I often ask my clients when they are determining the right course of action when bringing an employee back to work: what will this person be doing if they can’t fulfill their normal job duties? I suggest having the employee temporarily return in a different capacity such as an administrative role depending on his or her previous job responsibilities and where they are in the recovery process. We find that this often helps speed up the employee’s recovery as he or she becomes more eager to return to their previous job duties.

If you are interested in learning more about this potentially cost saving strategy or have any questions relating to commercial insurance or risk and safety management, please contact me at eholden@psafinancial.com.