Helping Employees Make Their Comeback After a Work-Related Injury or Illness

The fallout from an extended injury or illness can devastate employees and their families financially, physically and mentally.  Trying to live on decreased income from a workers’ compensation claim, coupled with family members having to take on additional responsibilities the disabled person cannot perform, can put a real strain on relationships.  As time passes, the additional problem of becoming increasingly isolated from their former life raises tension levels in an already highly charged situation.

This scenario occurs more often than you might think. According to the U.S. Bureau of Labor Statistics, in 2002, a total of 1.4 million injuries and illnesses in private industry required recuperation away from work beyond the day of the incident.  What’s even more surprising about the Bureau’s findings is that injuries and illnesses to workers aged 20 to 44 accounted for 64 percent of all injured workers.  Workers aged 65 and over accounted for only 1.7 percent of total injuries and illnesses.  The fact that the majority of workers on extended leave are workers who will need to return to work clarifies how important setting the stage for their comeback really is.

Leslie Yerkes, an organizational behaviorist and president of Cleveland, Ohio-based Catalyst Consulting Group, Inc. notes, “Finding and keeping good people provides a competitive advantage for organizations.  So, keeping the bond strong when employees are on family leave, working virtually or out on workers’ compensation is critical to not losing that employee to a competitor and to facilitate a rapid and smooth transition back into the workplace.”  She recommends the following steps for maintain a strong connection and facilitating a smooth re-entry:

  • Clarify expectations with the employee early on as to what they can and want to do.  If job reassignment will be necessary upon their return, let them know that you are willing to explore possible options.  Get a feel for the kinds of jobs they might be interested in and realistically explore how and where they can fit in.
  • Assign a communication buddy to the individual who can commit to having a regular weekly update conversation with the absent employee.  Make sure that the employee has a means to receive critical information while absent from the organization.
  • Include the absent employee via phone teleconferencing in key events that will affect them directly.  This is critical when it comes to changes in company/departmental policies or revisions in work floor procedures.  You don’t want an employee to return to work only to be reprimanded the first day back for violating a policy change that they were unaware of.  It increases the feeling that they have been left behind.  Those negative feelings might continue to grow until the employee feels compelled to find another job.
  • Encourage the work group to stay connected and communicate to the disabled employee that they care about their recovery.  It’s like Hallmark always says, “When you care enough to send the very best.”  Make sure an absent employee knows that they are truly missed by their co-workers. And most importantly, make sure the employee knows that their bosses are among those people!

The lesson to be learned from all of this is simple.  Transitioning back into the workplace begins as soon as the employee starts their leave.  If you plan for their re-entry from the outset, it will be as seamless as it should be.

Premium Damage Control for Workers’ Compensation Insurance

When you obtain workers’ comp for your business your initial premium rates are based on your company’s payroll and the average cost of insurance in your particular industry.  This premium rating will continue until your business becomes eligible for an experience rating.  An experience rating will take into account the amount of claims filed in order to determine your loss ratio compared with your industry average.  In general, an employer will need to be insured for at least two consecutive policy years to become eligible for experience rating.  Simply put, if your company follows safety prevention and files fewer claims than expected the amount of your premium will be positively affected.

Businesses can reduce their workers’ compensation costs in other ways.  One method is to split payroll for an employee who performs two different tasks, each one governed by a different risk classification.   Separate payroll records must be kept and duties specifically identified.  If an employee splits time equally between office work and a higher risk job duty, you could potentially decrease this employee’s risk factor by 50 percent for as much as half the workday. 

The same can be said for classifying workers correctly.  Misclassification is a common oversight leading to higher worker’s comp premiums.  The National Council of Compensation Insurance (NCCI) provides more than 700 job classifications in a publication called the Scopes Manual.  Most states use this manual as the basis for their classification schedules.  Since workers’ compensation premiums are directly impacted by your reported job classifications, it is well worth your time to verify both your company and employees are classified correctly.  Keeping track of changes in job duties throughout the year is also important. If an employee is promoted to a less risky position, your premiums will be lowered accordingly.

Since your workers’ compensation premiums are based on payroll you may be able to reduce your payroll totals by deducting overtime pay.  Some states will allow you to make this conversion for purposes of calculating your payroll.  Again it is important to keep detailed records to produce accurate payroll data. 

Approximately thirty-one states allow employers to reduce their premiums by paying a deductible that is generally between $100 and $5,000.  Your state insurance department or insurance broker can inform you if this is an option for your business.

It is also important to maintain an excellent safety record.  Utilize proper equipment and clothing to prevent accidents and injuries.  Be sure to train employees well in safety practices and procedures.  Create a safety manual for all employees.  And always follow the Occupational Health and Safety Administration guidelines related to your business.

Since many states have different regulations that govern workers’ compensation it is important to consult expert advice in this area.  An experienced agent that understands your business can work as your advocate with an insurance company, guide you through the classification process, and lead you to credits that lower your premium.

Is Your Workers’ Compensation Plan a Pork Barrel for Would-be Scammers?

Scamming “the man” can be a favorite pastime among some employees, and one of the best places to run a con is through your workers’ compensation plan.  If you aren’t vigilant, a good scam artist can perpetuate the fraud for a very long time.

The most common garden-variety type of workers’ comp fraud is the phony workplace injury that’s discovered later, when the employee is accidentally caught doing heavy lifting or seen working for another employer while collecting benefits.  Fraudulent claims can also occur when an employee complains of unseen ailments or extends the length of a legitimate claim because he doesn’t want to go back to work.

No matter what form it takes, everyone in the company feels the effects of workers’ comp fraud.  Other employees may have to put in more hours to compensate for the lost productivity, or an employer may have to decrease the percentage of annual raises because of higher workers’ comp premiums.

How can you evaluate the potential for workers’ comp fraud at your company? These are some signals that will alert you to a possible scam in the making:

  • If an employee has an accident shortly after arriving on Monday morning, this can be a sign of a scheme because the injury may have resulted from weekend activities.
  • If an injured worker refuses treatment from a doctor or physical therapist, it could be cause for concern.  Their reluctance to receive treatment could be an attempt to keep a phony injury from being discovered.
  • If a disgruntled employee or one who knows they are about to be laid off files a workers’ comp claim, it may be a ruse to get even with the employer.

Of course, while it is important to be alert to possible fraudulent claims, it is far more important to prevent them from happening in the first place.  According to theCoalition Against Insurance Fraud, there are several things you can do to combat workers’ comp fraud in your company:

  • Verify references and background information carefully.
  • Publicize your workers’ comp policy to all new and current employees, and provide them with updates at least once each year.
  • Spread the word that money paid for fraudulent claims comes out of the employer’s pocket, and can directly impact salary increases for employees.
  • Educate supervisors on workers’ comp issues, including how injuries decrease productivity and how costs affect the bottom line.
  • Display fraud awareness posters and the National Insurance Crime Bureau’s fraud hotline number.
  • Work with your insurer to implement a safety-management program that can eliminate possible safety problems.
  • Be aware of workers’ comp fraud indicators when a claim is made.
  • If you suspect a fraudulent claim and have evidence or witnesses to back up your suspicion, contact your insurer’s special investigations unit immediately.
  • Pay attention to employee complaints and concerns about their working conditions.  The strongest predictor of fraud is a chronically disgruntled work force.

Employers Paying the Price for Off-The-Job Injuries

Employers have spent the last few years putting more emphasis on workplace safety, to meet with the ever-increasing demands of safety-based regulations. According to the National Safety Council, their combined efforts have lowered workplace death rates 17% since 1992.  However, while businesses have been working to keep their employers safer and healthier while on the job, their efforts have been thwarted by the rate of fatalities occurring off-the-job, which has risen 14% in that same period. Companies find themselves spending a great deal of money to cover injuries from accidents unrelated to the workplace.

Statistics gathered for 2004 indicate that twice as many workers (which translates to 6.8 million people) were seriously injured while they were away from work than were injured while working. There were 49,000 injury-related deaths in 2004 that involved workers, and approximately 90% of these happened during non-working hours.

During that same period, the cost of employee injuries, both on- and off-the-job, was over $330 billion. Almost 60% of this figure went towards medical costs for injuries that occurred while employees were not at work.  This translates to a $200 billion loss by the companies in payouts to employees who didn’t even qualify for worker’s compensation. In addition, non-work related injuries caused employees to lose 165 million days of work time. Compare that number with the 80 million lost workdays that resulted from actual workplace injuries.

The impact on business is even more significant than may appear on the surface. The Agency for Healthcare Research and Quality discovered that more money is spent on medical care to treat trauma and poisoning for people of working age than for any other health condition including cancer, heart conditions, mental disorders, upper respiratory conditions and asthma. In fact, the fallout from non-work related injuries on businesses is becoming so important that the country’s first “Off-the-Job Safety Symposium” was held at Disney’s Contemporary Resort in Orlando, Florida in early 2006. Businesses are beginning to understand the economic value of keeping their employees safe both on and off the job.

A survey of 1,300 companies conducted by the National Safety Council verified that businesses implementing off-the-job safety training programs are already realizing the benefit: 58% reported a drop in the number of employee injuries that occurred outside of work. Compare this to research presented at the 17th World Congress on Safety and Health at Work in the fall of 2005, which showed that every dollar businesses spent on safety instruction yielded $3 to $6 in savings in future health care costs, proving once again that prevention is the key.

Take Three Steps to Controlling Your Workers’ Compensation Costs

Controlling workers’ compensation costs is not as difficult as you may think. The secret is a three-step approach that is firmly grounded in common sense: avoid injury claims, use proper industry classification codes for your employees, and find an insurance agent with experience in workers’ compensation coverage.

It sounds like a clichГ(c) to say that avoiding claims is a way to control costs. It’s such a simple concept, but it is actually made up of several complex components. The first is properly training new employees to perform their jobs safely. This requires developing a written program that is presented to all new hires during their initial orientation. This can be a difficult process, especially if you don’t have someone who is trained to design and implement training.

If you need help to develop a program, you can find it through OSHA’s Outreach Training Program. This is a voluntary train-the-trainer program through which OSHA develops trainers who are authorized to teach construction and general industry occupational safety and health standards and policy. For information regarding trainer certification requirements for the construction industry, course guidelines, training tips etc., You can also find information about locations offering this certification training.

Once you have conducted the initial training, it’s important to maintain safety awareness. You need to continually remind your employees to practice safety by posting reminders in common areas and holding meetings to discuss the specific issues affecting workers. These meetings are a good way to discover emerging problems and to brainstorm possible solutions. Employees who are part of the solution development process are more likely to buy into the process.

The other element you need to incorporate into a program that will successfully lower the number of on-site accidents is responsibility. Safety is the job of every employee, regardless of job title. Keep in mind that in the majority of states, workers’ compensation is “no fault.” Injuries that occur in the workplace are covered by workers’ compensation insurance no matter what caused the accident, including employee negligence. It is essential that you continually create an environment where employees take ownership for maintaining a safe workplace. A good way to encourage this is to provide incentives like raises or extra time off for employees who make it a habit to work safely.

The second step in the three-step program is to properly classify your employees. There are more than 600 job classification codes and each one is associated with the level of risk necessary to perform that job. Never use one code for all of your employees and always use the most recent edition of the classification codebook for your state. If you don’t take the time to properly classify your employees, you may actually increase your workers’ compensation rates by assigning codes that have more risk than your employees face.

The last step in the strategy is to find an insurance agent that specializes in property and casualty insurance, particularly workers’ compensation. This person will be able to design a program that not only meets state mandates, but also offers you the best value for your premium dollar.

Proper Treatment, Proper Place: The Key to a Smooth Workers’ Compensation Procedure

The longer an injured employee is out of work, the harder it is to return to their job, according to U.S. Department of Labor statistics.  Employers are also generally unaware that the time that lapses between an injury and the filing of a claim significantly increases the resulting costs. The Hartford Research Study in 2004 found that claims filed over a month after the injury cost an average of 48% more to settle than those reported in a timely fashion.  The study also found that even a delay of a week results in 10% more costs.  The delay in a claim could also delay the treatment, which could add to the cost of medical care and wage replacement.  The best strategy is to implement a 24-hour injury response process.

However, the duty of the employer does not end with the filing of the claim.  It is the employer’s responsibility to ensure that their employee receives appropriate care, for the benefit of both parties.  Proper medical care that can still keep the employee in the normal routine of coming to work is the key to maintaining an injured employee.  However, even if a physician or provider is credentialed through a network, it doesn’t necessarily mean they are familiar with injury management, or are aimed at returning the employee to work as soon as possible.

Factors to evaluate the appropriateness of a provider are:


  • Availability of case management
  • Use of standardized work restriction forms
  • Ability to identify ergonomic job risks
  • Treatment guidelines in the care of the injured worker
  • Willingness to coordinate and manage treatment and rehabilitation to facilitate a speedy recovery and return to work.


This is also an important step in establishing effective employer-employee relations, because when employers take on this responsibility, they will be able to:


  • Improve access to care that results in early treatment and speedier recovery
  • Establish origin of injury: is it really a workers’ comp claim?
  • Improve effectiveness of treatment
  • Reduce claim costs
  • Show your employees that you value them and are committed to their return.


Lower claims costs and a quick, effective recovery benefit all parties involved, and will maintain both your worker satisfaction as well as the productivity of your company.

Court Rules Undocumented Worker Eligible for Workers’ Comp

In a July 2006 ruling, New York’s 3rd Appellate Division ruled that The Immigration Reform and Control Act (IRCA) doesn’t automatically pre-empt the New York Workers’ Compensation Board practice of ignoring immigration status in determining workers’ compensation eligibility. The IRCA, enacted in 1986, requires employers to only hire persons who may legally work in the U.S., such as citizens and nationals of the U.S. and authorized aliens. The employer must verify the identity and employment eligibility of anyone hired.

In the case of Jose Hernandez vs. Excel Recycling Corp., Hernandez filed for workers’ compensation benefits after he was injured in August 2003 while working for Excel Recycling Corporation. At a hearing before a Workers’ Compensation Law Judge, he admitted to buying his Social Security card to obtain work in the United States. In spite of this admission, the judge established the case for injuries to the claimant’s back, left leg and left foot, and awarded him benefits. Excel and its workers’ compensation carrier, the State Insurance Fund, applied to the Workers’ Compensation Board for review of the decision. They asserted that benefits should not be awarded because Hernandez is an undocumented alien who is not legally authorized to work in the United States. The Board denied the application because the issue was not raised when the case was brought before the Workers’ Compensation Law Judge.

The carrier appealed, arguing that the Immigration Reform and Control Act as interpreted by the United States Supreme Court in Hoffman Plastic Compounds vs. National Labor Relations Bd. pre-empts the Board’s policy of disregarding immigration status in determining eligibility for workers’ compensation benefits. The carrier admitted that the issue of the law’s applicability here was not originally raised before the Workers’ Compensation Law Judge. However, the carrier maintains that the Board was incorrect in declining to include the issue because it is a matter of law. The appeals court rejected the argument that the IRCA applied and agreed that the board is not obligated to consider an issue that was not raised before the Workers Compensation Law Judge at the time of the original hearing. Hernandez’s original benefit award was upheld.

Use of Generic Drugs Decreases Workers’ Compensation Costs

A recent survey conducted by The Hartford revealed that the growing use of generic drugs has resulted in the first annual overall decrease in workers’ compensation pharmaceutical costs for 2005. The research data also showed that the increase in usage was directly related to the greater availability of generic substitutes, especially when it comes to expensive name-brand drugs. The Hartford has been publishing studies analyzing workers’ compensation pharmaceutical costs since 2001. Each of these studies has shown that although costs rose, the increase was becoming progressively smaller each year.

The study noted that the continued use of generic substitutes for OxyContin and Neurontin, which are two of the more expensive and commonly used drugs for treating pain in workers’ compensation cases, is having a positive effect on pharmaceutical costs. In addition, the withdrawal of Bextra and Vioxx, which were often taken to manage pain and inflammation, is helping to cut costs.

However, not all of what the study revealed was good news. According to the data, the overall increase in the use of drugs could slow down cost-cutting efforts. The use of OxyContin declined, but that decline was offset by adoption of its generic version, Oxycodone, which costs about 50 percent less. Total consumption of this painkiller increased by 6 percent.

Neurontin was last year’s second-highest ranked drug. It dropped to number 20 on the list, while its generic version, Gabapentin, took over the number two spot. Gabapentin was not even on the list in 2004, yet its popularity results from it being priced about 35 percent lower than Neurontin. Despite this savings, over the course of just one year, The Hartford survey noted a 25 percent price per-pill increase for both versions of this drug.

The Hartford isn’t the only study to uncover these trends in workers’ compensation pharmaceutical costs. Recently, The National Council on Compensation Insurance (NCCI) reported that the trend of rising drug costs in workers’ compensation cases was slowing in 2004, the most recent year for data. The increased rate in 2004 was 8.2 percent, down from 10.2 percent in 2003.

Many experts believe that drug costs for compensation claims are difficult to reduce because the work force has a growing population of older workers who typically use more medication after an injury.

Predictive Modeling Can Lower Workers’ Compensation Costs

Recent statistics compiled by the National Safety Council revealed that workplace injuries are at an all-time low.  The costs of workplace injuries, however, have escalated significantly over the past five years.  Employers and industry professionals alike are perplexed by this contradiction, and have struggled to find reasons to support such a paradox.

The following are factors that contribute to higher injury costs:

  • Injuries that are typically short-term are dragged out into long-term medical conditions, and often result in larger settlements.
  • According to the report, about 20% of employee injuries account for approximately 80% of claims.
  • There is no consistency in procedure for a claim; two employees with the same injury may see vast differences in claims cost.
  • The occurrence of “catastrophic injuries” is very low, so the problems are resulting from minor, “typical” injuries.

The most common workplace injuries are back and joint conditions, and cumulative trauma.  Statistics show that only three in twenty of these injuries become chronic, and cause a delayed recovery, which occurs when the length and cost of an injury do not correspond with the severity of the illness or injury.  Pre-delayed recovery intervention could be effective in ensuring employees return to work fully after an injury; however, this would not be cost-effective since only three in twenty injuries cause a problem.

The best strategy would be to determine which injured employees are most likely to experience a delayed recovery.  However, a survey to uncover these details would most likely violate an employee’s rights. So how can an employer effectively predict which employees will have a delayed recovery?

Fifty years ago, the banking and credit industries created a way of scoring loan applicants to determine which would be more likely to default. This is called Predictive Modeling, and is still used today. This same system could be applied to predict which employees are most likely to experience a delayed recovery.

There are several factors that could affect an employee’s ability to return to full productivity at work, beyond the medical concern of the injury:

  • Job dissatisfaction
  • History of prior injury or medical issue
  • Education level
  • Length of employment
  • Lack of available modified or transition duty jobs

Based on these common contributing factors, the Institute of Work Comp Professionals developed a database and questionnaire, which an employer answers for each employee after an injury.  Then, a score is assigned to predict the risk level for delayed recovery (Low, Medium, or High). Pre-developed intervention plans are available at each level.

By predicting which employees will be more likely to have a delayed recovery, and by having an established intervention plan, you can protect your company from prolonged absenteeism and lost productivity.

The Effects on Workers’ Compensation of an Aging Workforce Tapering Off

Even though the median age of America’s workforce is increasing, its effects on the workers’ compensation system are ebbing, according to Harry Shuford, practice leader and chief economist for the National Council on Compensation Insurance, Inc. This research organization is the oldest and largest provider of workers’ compensation and employee injury data in the nation.

Shuford addressed his remarks to attendees of the annual Workers’ Compensation Educational Conference in a workshop titled “Are Baby Boomers a Bust for Workers’ Compensation?” The session also included Ned Wilson, director of planning and treasury at FCCI Insurance Group. It was one of seven sessions on national trends put on by The National Underwriter Company as part of its partnership with the Florida Workers’ Compensation Institute. The Institute runs the WCEC program, a partnership of the Florida Workers’ Compensation Institute and The National Underwriter Company.

Shuford noted that many workers have been negatively impacted by changes in their retirement systems, which are providing them with less money even though their longer life expectancy has dramatically increased the amount needed for retirement. While older employees in their fifties and sixties are continuing to work, younger workers have been dropping out.

Older workers are injured less frequently than their younger counterparts, but when involved in an accident, they have more severe claims with higher costs and longer recuperation times, Shuford said.One of the reasons for the higher claims costs are replacement wages. Older workers generally receive more compensation because their salaries are higher. In the future, however, differences in average weekly wages may shrink, Shuford added.

Differences in the types of injuries suffered by older and younger workers are also lessening, Shuford stated. However, there is a difference in the treatment cost between the two groups. Workers who are 45 to 65 years of age usually require 40 percent more treatment for an injury than younger workers, and the drugs older workers are prescribed are more expensive.

Wilson mentioned one statistic he couldn’t explain; that medical costs for the 25-and-under age group have risen 10 percent annually while costs in the 35 to 54 year old category have only gone up 7 percent each year.

Shuford noted that even as older workers remain in the work force, the percentage of people over age 65 still working is extremely small and that over age 65, the average weekly wage drops. For workers over 55, nearly 17 percent of their lost work time results from falls. He attributed this rise in fall-related accidents to older worker’s poor eyesight and an inability to move as well as they used to.To counteract these effects of aging, Shuford suggested that company loss control precautions should include better lighting, marking steps clearly and providing handrails.