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Workers' Compensation: A Necessary Evil

When an employee is injured on the job good claims management is critical to the employee as well as the employer.  The way a claim is managed has a huge impact on the outcome of the claim. 

When looking from the employee’s perspective,  they want to have their injuries taken care and to know that they will not experience financial loss because of their injuries. When the claim is filed by the employer a claims adjuster assigned and they manage the claim. The adjuster will approve or deny the claim based on their investigation into the injury.  The investigation could be as simple as getting the injured worker’s statement or interviewing fellow employees and witnesses.  Once a claim is approved, the adjuster will facilitate and coordinate the employees care plan. The adjuster works to coordinate appointments with a doctor and approve medical care, surgeries, and follow up care if needed.  If the employee’s injury is severe enough that wages are lost the adjuster would approve lost wage payments.  The sooner the adjuster starts managing the case, the better experience the employee has, and the less likely that a lawsuit will be filed against the employer for mishandling of the claim.

The employer also benefits from quick and effective claims management.  Claims that are submitted within 5 days of the accident can end up costing an employer roughly 32% less than those submitted after the 5-day mark making it important for the employer to submit claims in a timely manner.  The quicker a claim is submitted, the faster an adjuster is assigned and can start managing the claim and making sure the injured worker is taken care of.  While the adjuster needs to make sure the employee is taken care of and has a good recovery plan, they also need to keep costs as low as possible. The lower the workers compensation claim costs the better for the employer and insurance company.  The final total of the claim impacts the employers experience modification factor because claims are factored into the mod for 3 years. If the employer has frequent claims, large or small, it can also impact their insurability.  An employer may have difficulty finding workers’ compensation coverage with a standard insurance carrier and may need to seek out other carriers if they are deemed ineligible, which can get costly. 

As an employer, you also have a vested interest in your employee recovering quickly and being able to return to work.  You don’t want other employees thinking they could take advantage of workers’ compensation to avoid working while still getting paid.  This idea can lead to false claims and unfortunately the company is obligated to cover the injured employee until they can prove the injury was falsely reported. Proving a claim is false is a very difficult and lengthy process that must go through the court system.  In addition to false claims, you do not want your employees traumatized by an injured coworker and unable to perform their duties.  Therefore, it is imperative that any claims be managed efficiently and properly so the employee can get the care they need and ultimately return to work.

Workers’ compensation is a necessary evil for an employer. It assures that an injured employee will have their medical bills and lost wages financially covered in the event of a work-related injury and the employer is not paying it out of their pocket.  Workers Compensation was created in response to the number of injured workers that were unable to provide for their family after being injured at work during the Industrial Revolution.  Workers’ compensation is a federally mandated program but the states ultimately set the rules.  Some states will allow an exemption to farmers, but this is very risky because an employer is still responsible for any medical costs and lost wages associated with work-related injuries. 

When purchasing a workers’ compensation policy, an employer should look at cost but also needs to consider the value-added services that are available to them such as claims management and loss control.  These services can help an employee recover quickly and get back to work and ultimately keep an employer’s costs down. With Agri-Services Agency you not only get access to our superior loss control services, convenient claims management, and customizable features but our consultants can help you design a workers’ compensation plain tailored to your operation. To learn more about your workers’ compensation options give us a call at 1-877-466-9089.