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Success Stories

CWCA Success Stories

 

AUDITS

Demolition company knocks down $36,000 on its annual premium

Insured
The insured is a demolition company specializing in interior non-structural demolition. It employs 100 workers.

Situation
The company, which performed work in three states—Maryland, Virginia and the District of Columbia—was given a premium that appeared to the client to be higher than usual.

Assessment
Certified WorkComp Advisors (CWCAs), upon reviewing all documents provided by the state’s Injured Workers Insurance Fund (IWIF), determined that although the company had separate payroll premiums in three states, Maryland was charging a premium for all the company’s workers, regardless of where they worked. This led to unnecessary overcharges of $36,000.

Solution
The CWCAs collected all payroll and supporting documentation from each state, including copies of each state’s policies and job records from each project. After careful review, they appealed to the audit department of the Injured Workers Insurance Fund. The findings were revised in favor of the client.

Result
As a result of the work by the CWCAs, the company saw a $36,000 reduction in its annual premiums.

Audit review leads to client savings of $18,940

Insured
The insured is a family-owned trucking company with 20 employees. Its primary business is hauling dirt, sand and gravel, as well as landscape product sales.

Situation
In early April 2008, the insured received an additional premium from the 2006/07 final audit in the amount of $15,129.

Assessment
Following established guidelines as set forth by the Institute of WorkComp Professionals (IWCP), a Certified WorkComp Advisor (CWCA) reviewed the final audit billing and determined that the audit should be placed under protest. Audit worksheets were requested from the insurance carrier. Once the worksheets were received and analyzed, major discrepancies became apparent.

Solution
Examination of the final audit worksheets revealed that the auditor had not properly identified payroll, due to a split Normal Anniversary Date during the policy period. As a result, the carrier had front-loaded the first rating period, which had significantly higher rates. To offset this, the CWCA had spreadsheets prepared that properly recorded the payrolls by rating period, which in turn provided a calculation that correctly identified the proper earned premium.

Result
The carrier’s audit supervisor agreed with the findings and processed the revised final audit billing. Subsequently, this produced a final audit return premium of $3,811. As a result of the Certified Work Comp Advisor’s findings, the net premium savings for the client was $18,940.

A careful audit helps save oil company $2,000

Insured
The insured is a large oil company making deliveries to area businesses, including five convenient stores/service stations that it owns. The company has 40 employees and estimated annual revenues in excess of $50 million.

Situation
Following an audit, the insurance company attempted to charge the company for higher job classifications even though the number of employees or the type of work had not changed.

Assessment
Certified WorkComp Advisors (CWCAs) reviewed all audit worksheets. After a careful review and discussion of the situation with the head of the company, it was determined that there were two employees who had been classified as truck drivers, when the proper classification was maintenance workers. It was further determined that the misclassification was made by an independent auditor hired by the insurance company who had no prior knowledge of the company.

Solution
The CWCAs went through the NCCI Scopes Manual of Classifications and found classifications more suitable to the two workers. The request for the change was put in writing to the underwriter, who agreed to place the two employees in the lower classification.

Result
By undertaking the new audit, the CWCAs were able to zero in on the mistake and return close to $2,000 in premiums to the company.

 

Incorrect audits drive up rates for printing company

Insured
The printing company employs 85-90 people and with revenues estimated at $15 million.

Situation
The employer was witnessing an increase in its Experience Mod and annual premiums.

Assessment
The employer became increasingly dissatisfied with their current carrier because they felt their audits were incorrect. Recognizing the need to have an expert review of the audit, the employer turned to Certified WorkComp Advisors (CWCAs). The CWCAs discovered that not only were employees misclassified, but the business itself was misclassified. They also had a higher than average number of injuries despite a formal safety program that even met state certification and insurance policy credits. This combination resulted in unnecessarily high premiums.

Solution
The CWCAs toured the facility, interviewed employees as to their duties and where they worked, and upon confirming their belief that many employees were incorrectly classified, set up a new audit. Furthermore, by taking the time to understand the nature of the operation, they determined that the company itself was being misclassified as a printing operation, when in fact the operation was sheet-fed, which has a lower employee injury factor.

To tackle the number of injuries, the CWCA’s implemented their Behavior Based Risk & Safety Improvement Program that resulted in a reduction of the number of injuries by 63% in the first year and 94% in two years.

Result
The CWCAs were able to lower the employer’s annual premium from $85,000 to $43,000. The employer also got back an additional 15% of the $80,000 annual premium ($12,000) by correcting their classification. They also saw their Experience Mod drop from 1.30 to .90, with an anticipated drop to .70 in year three due to establishing a unique Behavior Based Risk & Safety Improvement Program.

 

School Goes To Head of The Class by Recovering $32,000 on Audit.

Insured
School for “Exceptional Children” (autism, down syndrome, etc.); 300 employees; safety committee 19 staff members.

Situation
1.88 experience mod, 300% loss ratio, which means the insurance company paid out to doctors, pharmacies, and other medical providers three times more than the premium paid to the insurance company by the School. Based on that ugly statistic, the insurance company would not continue insuring the employer. The School also had a 45 year relationship with its current agent.

Assessment
Claims related to interaction with the children when they have an episode. Most were soft tissue injuries. There was no return to work program and the safety committee did not have a list of transitional duty jobs.

Solution
Using Job Bank Worksheets, each department developed a list of possible jobs that could be done, if there were an extra person in the department. The lists are maintained in the HR/Finance Department. When an employee is on light duty, they report to that department to get their assignment.

Result
Mod projection for coming year: 1.27; School received $32,000 because Dean discovered and corrected errors on the audit. With that money they distributed a $150 holiday bonus to all employees. A very happy new client with more committed employees.

Review of Audit Finds Mistakes: Incorrect Change in Classification Nets $41K

Insured
The business is a local hauler in the South that handles towing risk. It has 25 employees and does approximately $1.5 million per year in business.

Situation
Following an audit of the insured’s Workers’ Comp policy, the company was charged an additional premium of $46,000. The company paid the first installment of the additional premium – $26,000 – and was now being called upon to make the second installment of $20,000.

Assessment
A Certified WorkComp Advisor (CWCA) who had been working with the insured for a number of years reviewed his client’s coverage and performed his own audit of the policy. He found the insurer had incorrectly changed a classification on the audit that had resulted in the additional premium. Besides being the wrong classification for the position in question, the rules governing classification codes in the company’s home state prevent them from being changed in the last 90 days of a policy, as was the case with this change. Initial contact with the insurer was not met with action, but rather with threats for non-payment of the second premium installment. The Advisor continued for several months to work out the situation with the carrier and to get them to admit to the mistake in the classification change.

Solution
After several months with no result, the CWCA finally got NCCI involved. He had previously worked with NCCI to develop a program for towing risk classification codes – the very same program he had used for his version of the audit that had showed the incorrect change. He sent the results of the audit he performed that indicated the code to have been incorrect and also pointed out that the carrier should not have been allowed to make the change under the rules for classification code changes. After several more months, NCCI accepted the data he had sent and supported his claim that the classification change had been incorrect.

Result
After more than 10 months of fighting the change to the insured’s classification code, the CWCA’s data finally led to NCCI ruling that the additional premium should only have been $5,000, not $46,000. The insured was instructed not to make the second payment of $20,000 and is now awaiting a return of premium check for $21,000. Although the carrier is currently disputing NCCI’s decision, the CWCA says, “If I hadn’t gone to the Institute and learned the things I learned, I would have given up on this after a couple months. But relying upon what I learned I knew I was right, so I stuck with it, got the classification fixed and got my client’s premium reduced.”

 

Class Audits & Improved Management Cut Care Provider’s Mod 44%

Insured
The business is a non-profit outpatient, long-term care provider with a $20 million payroll for 512 employees spread over nine locations in the metro-Denver area. The company assists elderly clients so that they are able to remain at home by either picking them up from their homes each day and bringing them to day-centers, or providing in-home nursing care when necessary. They also coordinate and transport clients to medical appointments.

Situation
The employer had a mod of 1.71. The staff was classified in eight different class codes, losses were three times higher than expected and the premium was $321,734.

Assessment
A Certified WorkComp Advisor (CWCA) who had been working with the insured for a number of years reviewed his client’s coverage and performed his own audit of the policy. He found the insurer had incorrectly changed a classification on the audit that had resulted in the additional premium. Besides being the wrong classification for the position in question, the rules governing classification codes in the company’s home state prevent them from being changed in the last 90 days of a policy, as was the case with this change. Initial contact with the insurer was not met with action, but rather with threats for non-payment of the second premium installment. The Advisor continued for several months to work out the situation with the carrier and to get them to admit to the mistake in the classification change.

Solution
Several solutions were needed and implemented. First, the CWCA proposed a $1,000 deductible, to which the client agreed. Then the NCCI was called in to perform a classification audit, first for the current policy year and then for the two previous years. Next, safety specialists were brought in to assess the business and the CWCA implemented the program, “HR That Works.” Safety programs including Shoes For Crews – a non-slip shoe program that reimburses the policyholder for the first $5,000 of a claim if the worker slips while wearing the shoes – were established for all their drivers. A dedicated WorkComp point person was identified and that person now holds quarterly claims meetings with the adjuster, the designated provider, and the CWCA.

Result
The deductible increase immediately eliminated 75% of their losses from the reportable losses for the mod calculation. The class audit conducted by NCCI for the current year reduced the number of classes from eight to three and reduced the mod from 1.71 to 1.24. When the previous two years were audited, that was further reduced to 1.11 and the client received back premiums. In January 2005, the insured renewed their policy with a 0.96 mod. Despite the fact that the payroll had increased to over $20 million from just $12 million the year before, the new premium was $337,114. Had they renewed with that large of an increase in payroll and a mod of 1.71, the premium would have been $587,846. That represents a savings of $250,732!

 

EXPERIENCE MODIFICATIONS:

 

Office Furniture Co. Sees Mod Drop 22%

Insured
This assembler of office furniture employs 86 and has revenues in excess of $32 million annually.

Situation
The employer saw its Experience Mod escalating steadily up to 1.22.

Assessment
Certified WorkComp Advisors (CWCAs) found that one reason for the increase in the Experience Mod was the claim reserve for an employee who suffered a shoulder injury, resulting in numerous surgeries. Based on the extent of the injury, the carrier set a loss reserve in excess of $100,000, resulting in an increase in the Mod.

Solution
Upon researching the case, it was determined that even though the claim was actually settled for $19,000, it remained on the books at $100,000. The CWCAs had the insurance company reopen the claim and re-file it with the state in order to have the lower amount reflected on its state Experience Mod worksheet.

Result
With the identification and correction of this error, the company saw a 22% drop in its Experience Modification Factor from 1.22 to 1.0, lowering its annual premiums by $6,000-$7,000.

Landscape Contractor Sprouts a $104,000 Refund

Insured
This major landscape contractor servicing commercial properties employs 120 people and does $1.9 million in annual revenues.

Situation
A year after purchasing the company, the insured was concerned why, as a relatively new business, its Experience Mod was extremely high at 1.39, with annual premiums in excess of $400,000.

Assessment
Certified WorkComp Advisors (CWCAs) conducted a complete needs analysis on the company, running the gamut from human resources to claims filing. The insured was unaware of how the system worked in regards to ownership changes and it was discovered that the insured had actually inherited the previous owner’s high Experience Mod. Significant aspects of the operation, including the discontinuation of tree trimming, had changed.

Solution
Utilizing techniques and information garnered at the Institute of WorkComp Professionals, the advisors did a thorough investigation of ownership laws and deduced that the insured should not have inherited the previous owner’s excessive Mod rating. Appropriate paperwork was filed with the rating bureau, and the Workers' Comp Insurance Rating Bureau agreed on the findings.

Result
After the successful filing with the bureau, the insured’s Mod was adjusted and lowered to 1.0 and a refund of $104,000 in premiums.

Combining Hotels Saves Owner $823,000 and Lowers Experience Mod

Insured
Five hotels, under a single ownership, with four located in New York and one in Florida. The company employs more than 2,000 with premiums in excess of $1.8 million.

Situation
The company’s Experience Modification Factor and premiums had climbed steadily and ownership was unaware as to why they were seeing such high costs.

Assessment
Certified WorkComp Advisors (CWCAs) did an analysis and discovered that the hotels were being issued independent Experience Modifications. These varied, with some hotels having more favorable loss experiences than others, as well as differing payrolls. The relationship of ownership and experience ratings is one of the most complex parts of the experience rating process, but the CWCAs were well-trained and felt it would be beneficial to examine the possibility and outcome of combining the ratings.

Solution
The CWCAs examined the Mod worksheets from various insurance carriers and the hotel’s ownership information to take a closer look at each hotel separately, to see which ones could be combined. It turned out, after close scrutiny, they could ALL be combined. The CWCAs then went on to work with the insurance carriers and the NCCI to make all necessary corrections and adjustments, retroactive back to 2003. They also established annual checks and continued to work closely with the Ratings Board to ensure the hotels’ Mod would continue to be issued correctly.

Result
Because of the work by the CWCAs, the ownership of the five hotels saw a return of $822,808 in premium, along with an Experience Mod drop from 1.26 to .84.

Consolidation of multi-state payrolls saves company $283,000 and lowers Experience Mod

Insured
The company grows and distributes plant materials and nursery stock nationwide and employs more than 1,800 at plants located in 10 states.

Situation
The company’s Experience Modification Factor climbed steadily and management did not understand why this was occurring.

Assessment
Certified WorkComp Advisors (CWCAs) discovered that the Mod was distorted because the only data factored in was the New York payroll information, which accounted for more than half of the overall payroll for the entire company. The combined NCCI data from the other 10 states was not being recorded. Thus, the New York Mod was not benefiting from the lower Experience Mod from the other states. The CWCA’s researched the situation and found that the company had different Mods in each state. The company was having a NY only Mod issued by the NYS Rating Board. It wasn’t taking advantage of the ability to combine many of the other states they operate in to produce a combined NCCI modification. The NY operation was being charged an inflated modification because the payroll and favorable loss experience from the other locations was not factored in the NY only mod.

Solution
The CWCA’s were in place as the agency for the company’s New York location. With the approval of the client, they began to collect all data related to the other locations, which was a challenge due to the fact that each location placed its own WC policy. Utilizing training they received from the Institute of WorkComp Professionals, the CWCA’s put all the information into a spreadsheet and then presented the data to management. This resulted in receiving the Broker of Record Letter to begin working on the other policies.

Result
As a result of the work by the CWCA’s, the company’s Experience Mod dropped a total of 113 mod points over 4 years, netting the company a savings of $283,000.

Smelting Plant Saves $126K, Sees Mod Drop 30%

Insured
The aluminum recycling/smelting plant employs 36.

Situation
The employer was witnessing an increasing number of claims each year and had been saddled with a surcharge as a result of those claims.

Assessment
Certified WorkComp Advisors (CWCAs) began working with the employer two years ago, just two months after its latest renewal. The CWCAs found that the increasing claims were largely due to a lack of a defined employee-injury plan and hiring procedures that failed to identify employees who either were not well suited for the jobs for which they were hired or came with histories of prior Workers’ Comp claims.

Solution
The CWCAs worked with the employer to organize a formal program that specifically addressed the problems they were having. First, a comprehensive hiring plan was put in place to ensure that those who were hired did not have previous histories of injuries or other issues that may affect their ability to do their jobs. Second, an organizational plan was implemented in order to improve workplace safety and decrease injury frequency. Third, a return to work plan was established and introduced to both supervisors and the rank-and-file. The plan identified both the steps to take when an injury occurs and specific “light duty” opportunities and let all employees know exactly how they were to act before, during and after an injury occurred.

Result
Because the plan showed the promise of significantly decreased claim frequency, the CWCAs were able to free the employer from the State Work Comp Fund and move them to a standard insurance company. This move saved the plant owners more than $57,000 in the first policy renewal and more than $69,000 in the second renewal. In addition, over the two years since the CWCAs began working with the employer, the number of claims has dropped significantly – enough to warrant a 30% drop in its Experience Modification Factor.

Implementation of comprehensive Workers’ Compensation program saves Modular Home Manufacturer $5,000 and lowers Experience Mod

Insured
The company is a manufacturer of modular homes with more than 40 employees.

Situation
The company’s Experience Modification Factor had climbed steadily to 1.07 and management did not understand why.

Assessment
Certified WorkComp Advisors (CWCAs) were called in to review the claims after one of the owners attended a Workers’ Compensation cost reduction workshop.

The Advisors discovered that the insurance company had made a coding mistake with a series of claims relating to knee, shoulder and hand injuries. Some had been miscoded as indemnity claims instead of medical-only claims. This company is in one of 38 states where medical-only claims are discounted 70%, while claims involving indemnity and medical are charged at 100%. This coding error had driven up the company Experience Mod.

Solution
The CWCAs requested that the insurance company inform the rating bureau of the error and correct both the coding and the Experience Mod.

In addition, the CWCAs developed a Workers' Comp plan for the company, including regular meetings with management to review Workers' Comp issues, setting up mandatory safety meetings, coordinating loss control services and claims monitoring.

In addition, a relationship between the company and an occupational medical clinic was established for the treatment of job-related injuries. Working with the clinic, drug testing and return-to-work programs were implemented. A return-to-work program helps keep the injured employee focused on recovery at work and assists in reducing both medical expenses and time off the job.

Result
As a result of the work by the CWCAs, the company’s Experience Mod dropped from 1.07 to 1.00, netting the company a $5,000 annual premium savings, while the overall Workers’ Comp plan will produce continued cost reductions over the years.

Implementation of comprehensive Workers’ Comp program saves auto dealer $2 million in first year

Insured
The chain of full-service automobile dealerships employs more than 500 people divided into three work classes – dealer, auto sales people and clerical. The company did more than $250 million in business in 2005.

Situation
The frequency and severity of claims being incurred by the employer were staggering. It had experienced more than 100 claims for each of the previous three years. The costs of those claims averaged more than $700,000 per year and the most recent year they topped $900,000. These numbers had already driven up the employer’s Experience Mod to 1.3 – more than twice the minimum level of 0.65– and was about to push up the mod for the coming renewal year by another 10%.

Assessment
Certified WorkComp Advisors (CWCAs) reviewed the business prior to the employer’s latest renewal. They found much disarray in its personnel plans and some aspects – such as defined return to work or injury-reporting systems – were non-existent. Furthermore the employer relied upon the carrier to provide on-the-job safety plans, which amounted to employing an outside safety consultant that partially implemented OSHA regulations, but not much more.

Solution
The CWCAs in concert with a risk management team put a business plan together that included, among other things, detailed procedures for reporting injuries, specifications to whom the employees should go for initial medical evaluations and identification of “light duty” jobs. The plan also included a very comprehensive safety program.

Result
Because the plan showed the promise of significantly decreased claim frequency, the carrier agreed to work with the employer and decreased the renewal offer for last year by $950,000. In the first year, the number of claims dropped nearly 70% to only 38 with the overall cost of claims plummeting to $128,000. And in the first eight months of the second year, 12 claims have been filed with no lost workdays – a first for any eight-month period for this employer. The employer’s Experience Mod for this year has also dropped by 25% and this year’s premium dropped by over $800,000. In all, the total savings realized by the employer to date has topped $2 million.

Employee Injury Notification Program Cuts Mod, Saves $135K

Insured
Located in Eastern Pennsylvania, the plastics manufacturer has 78 full-time employees and reported revenues of $22 million in 2005. The company manufactures plastic sheets and molds plastic parts for industrial, commercial and residential use.

Situation
With an Experience Mod already at 1.35, more than twice the 0.65 minimum level, the employers were notified of another 25% increase in the mod, which would raise it to 1.685 and drive up their premium by $78,459. At the root of the higher- than-necessary mod was a four-year average for injury claims of $213,321. The company witnessed an annual average of 18 injury claims with roughly five each year resulting in lost time at work.

Assessment
After initial skepticism about being able to improve their situation, the employers allowed a team of Certified WorkComp Advisors (CWCAs) to review their business. A thorough review of the previous four years showed that the employers did not have a set procedure in place for employees to report injuries, nor were their supervisors trained to handle subordinates who were injured on the job.

Solution
The CWCAs implemented a 14-point-plan that included detailed procedures for reporting injuries, specified where the employees should go for initial medical evaluations and identified “light duty” jobs that injured employees could still perform even if they were not able to handle the physical requirements of their regular positions.

Result
Within a year of instituting the 14-point program, total claims dropped to just 14. Even more impressive, was that none of them resulted in lost time from work. The effect of this was to drive down the net claims to only $12,438 – more than $200,000 less then the manufacturer had averaged over the previous four years. After 20 days of negotiating on the employers’ behalf, the CWCA’s convinced the insurance company to bypass the normal one-year lag in the state’s experience mod system and assign the employers’ new premium on the basis of the progress made.
As a result, rather than an increase of $78,459, the manufacturer’s premium decreased by $52,114 – a total overall savings of $135,073 for that year!

Wausau Glass Company Discovers Benefits of Certified WorkComp Advisor

Insured
Located in Wausau, WI, Rib Mountain Glass specializes in glass for commercial entrances and storefronts, construction glazing and retail glass sales. With 40 employees, the company had sales revenue in 2005 of approximately $2.5 million.

Situation
Rib Mountain Glass began working with a CWCA in 1995. Then, in 2002, the company moved its account to a direct insurance carrier at a time when rates were increasing and lower pricing seemed to be the issue for the owners.

The direct writer promised the coverage would be the same as that which was provided by the CWCA. It wasn’t. The direct writer also agreed to provide Rib Mountain Glass with a safety manual. What they received was a “generic template” from a web site that was not specific to the glass business. To use the manual, Rib Mountain had to revise it for its purposes. In addition, although the goal of moving to the direct writer was to save money, Rib Mountain was actually paying $30,000 more than it did in 2002, largely due to an increase in the Experience Modification Factor (Mod) f rom 0.66 to 1.17.

Assessment
The Rib Mountain experience illustrates several important issues:

• Insurance policies that appear to be identical can be quite different. It is often difficult for insured’s, who are not familiar with coverage issues, to identify the differences.

• The value of a Certified WorkComp Advisor. A Certified WorkComp Advisor reviewed Rib Mountain’s coverage and found the direct writer’s handling of claims had not been good. Some claims that should have been cleared in a year were still open two years later. Rib Mountain’s Experience Modification Factor (Mod), which had been 0.66 in 2002 left nearly doubled from 2002 to 2004, reaching 1.17 in 2004.

Solution
Rib Mountain’s management requested a meeting in 90 days to move the account back to the CWCA’s agency. This occurred on the anniversary of the policy. The CWCA gave immediate attention to the outstanding claims and works with Rib Mountain, the insurance company adjuster and treating medical providers to reduce the outstanding claims. There are many reasons that claim costs escalate unnecessarily. Often employers do not know what to do when an injury occurs and lack a clear and definitive process to manage the injury. In addition, insurance company’s claim management is challenged by increased caseloads and reduced staffs. Medical care is often misdirected and uncoordinated. CWCA’s are trained to Help employers closely monitor the progress of injured employees so that costs do not spin out of control.

Result
The CWCA has been able to stem the tide of Rib Mountain’s rising Mod. For 2006, the client’s Mod will be 1.11 and should continue to drop as the improperly handled claims are cleared. Says a representative of Rib Mountain Glass, “With the help of our CWCA, we are understanding WorkComp better and using their guidance we’re learning how to get our rates and costs under control.”

Correction of transposition error leads to seven point drop in mod

Insured
Located halfway between San Francisco and Los Angeles, the 22-year-old company reported sales in 2004 of $6.1 million and a payroll of $1,156,808. The company’s 47 employees design, sell and lease trailers, modular buildings and storage containers for mobile offices at construction sites, concession stands, sales offices for developers, and alternative accommodations during reconstruction.

Situation
A Certified WorkComp Advisor (CWCA) performed a detailed review of the company’s Workers’ Compensation account and projected an Experience Modification Factor of 0.90 for 2005- 06. When the worksheet came back from the Workers’ Compensation Insurance Rating Bureau (WCIRB), however, the insured’s Mod had been set at 0.97.

Assessment
A thorough review of the 2005-06 Experience Modification worksheet from the WCIRB revealed a discrepancy in the Bureau’s calculation of the Mod. Upon further investigation, it was discovered that a data input clerk at the Bureau had transposed the company’s Actual Incurred Loss of $44,014 as $84,014. The $40,000 difference in the Actual Incurred Loss was directly responsible for the 0.07 increase in the Mod.

Solution
The WCIRB was contacted and the transposition error revealed. The board concurred with the discovery, corrected the entry and issued a revised worksheet.

Result
After correcting the transposition error, the WCIRB adjusted the company’s Experience Modification Factor from its calculation of 0.97 to the correct figure of 0.90, which had been arrived at in the CWCA’s original assessment. The resulting drop in the Experience Modifier resulted in a premium cost reduction of $8,851.

Review of Experience Mod saves over $25,000

Insured
A family-owned building contractor located in central California with 15 employees that did $2,000,000 in business in 2004. The contracting company is one of several businesses owned by individual members of the same family.

Situation
Experience Modification Factor jumped, for no obvious reason, from 0.99 for 2004-05 to 1.27 for the current year. The insured decided it was time to re-evaluate his WorkComp policy.

Assessment
After speaking with the insured to obtain a better understanding of the operation, a Certified WorkComp Advisor (CWCA) performed a basic review and developed a projected Experience Modification Factor. He then compared the contractor’s 2005-2006 Experience Modification worksheet from the Workers Compensation Insurance Rating Bureau (WCIRB) to his projection. The comparison revealed a startling discrepancy.

Solution
After examining the discrepancy, it was determined that the WCIRB had been co-mingling statistical data from a company owned by another family member with that of the building contractor. Correspondence was initiated with the WCIRB identifying the separate and non-combinable ownership of the companies and offering the CWCA’s projections of what the corrected experience modifications should be.

Result
The WCIRB agreed with the CWCA’s findings. It adjusted the contractor’s Experience Modification Factor for 2005-06 from 1.27 to .87, which resulted in the employer saving $9,343 on its WorkComp premium. It was also discovered that the Board had made the same error in the previous year, so it also retroactively adjusted the 2004-05 Experience Modification Factor from .99 to .85, which resulted in another savings of $15,689. The total WorkComp premium savings for the insured came to $25,032.

Conditional offers of employment and pre-employment physicals reduce WorkComp costs

Insured
Non-Profit Social Services Agency; 315 Employees. $8,975,000 in payroll, $13,405,468 in total revenue. Provides day habilitation, vocational, residential and evaluation services to approximately 400 disadvantaged adults. Operate eight-day habilitation facilities and 16 residential programs in which consumers live independently and employees are in consumer residences daily to provide needed services. Also operates a thrift store and cookie bakery and distribution enterprise.

Situation
2004 Experience Mod jumped to 1.85 from 1.55 and 1.58 the previous two years. Management did not understand the increase and felt the WorkComp system was out of control and they had no way to control the cost. They had never discussed the causes behind the claims history or what impact the hiring process had on the cost of their program.

Assessment
Loss data was collected and analyzed for past three years and errors were found in all three years. Errors included open claims that had been closed and incorrect loss amounts on closed claims. Of equal importance was the insured’s lack of understanding of the causes of the claims, how to prevent and better manage them.

Solution
Filing for corrections resulted in a reduction of 16 points on the Experience Mod and a return of over $24,000 in premium. In addition, the value of pre-employment physicals and conditional offers of employment were discussed with the insured. One case clearly demonstrated the value – an employee hurt his back while carrying a case of soda to the van – resulting in an $81,926 claim appearing on the Experience Mod worksheet and costing the insured about $26,000 over three years. The employee had a pre-existing back condition that was unknown at the time of hire. Because they had no conditional offer of employment or pre- employment medical exam process, they had no means to manage his workload to accommodate his physical condition. This claim could easily have been avoided if his duties were modified to exclude carrying heavy objects.

Result
Initial return of premium of over $24,000 and experience mod lowered by 16 points. Likelihood for significant savings in the future as the insured takes steps to manage their WorkComp costs.

Returned Premium and Lower Mod for Social Service Agency

Insured
The insured is a regional social services agency providing day habilitation, vocational, residential, and evaluation services to approximately 400 disadvantaged adults. With a payroll of $8,975,000 for 315 employees, they operate eight day-habilitation facilities and 16 residential programs in which consumers live independently, with employees visiting their residences daily to provide needed services. The organization also operates a thrift store, cookie bakery and a distribution enterprise. In 2004, the insured reported total revenues of $13,405,468.

Situation
WorkComp program services consisted of a policy provided by an assigned risk carrier and an annual visit by the insurance company’s auditor and loss control representative. Their 2004 Experience Mod jumped to 1.85 from 1.55 and 1.58 the previous two years. When they received a renewal bill from their carrier and a renewal policy from their agent, they had no idea why their premium was so high. Management thought the system was out of control and there was no way to control the increasing costs.

Assessment
A Certified WorkComp Advisor collected loss data from carriers for three previous policy years. He compared the data to that found on the Experience Mod worksheet and found errors in all three of them. In the first year, seven errors were found, each consisting of closed claims with incorrect loss amounts listed. In the second year, 27 errors were discovered; most of these were closed claims with loss amounts listed as twice their actual values. In the third year, the policy included one aggravated inequity claim as being open for $15,877, when in fact it had closed a few days after the valuation date for $944. Errors were not the only problem; the insured also had no process in place to perform pre-employment physicals and had no means to manage employee workloads to accommodate physical limitations.

Solution
In addition to addressing the 35 individual errors from the three previous years with each of the appropriate carriers, the CWCA discussed with the insured the claims, their causes and what may have been done to prevent them and to better manage them. He impressed upon them the need for conditional offers of employment and pre-employment medical exams so if an issue arose with an employee they could accommodate his or her workload. At first, they were unsure of the applicability, but accepted the plan after the CWCA discussed the direct and indirect costs to the organization, the personal cost to the employee and pointed to specific instances where a pre-employment exam could have made a difference.

Result
The CWCA pursued corrections with the previous carriers. Corrections for 2000 reduced the Mod to 1.8. Corrections for the 2001 policy year and the correction of the aggravated inequity in 2003 reached the bureau nearly simultaneously and a 1.69 Mod was issued. In total, the client received a returned premium of more than $24,000.

 

INJURY MANAGEMENT:

 

CWCAs unbundled costs and save contractor $25,000

Insured
A midsize masonry contractor.

Situation
The masonry contractor was using a PEO (Professional Employer Organization) and was concerned what it was paying for Workers’ Comp was higher than that of its competitors. It was difficult for them to determine their rate because the payroll taxes, Workers’ Comp and additional fees were combined.

Assessment
Certified WorkComp Advisors (CWCA) analyzed the PEO invoice and broke out the payroll taxes, fees and Workers’ Comp costs. It turned out that Workers’ Comp came to $59,000 a year. The CWCAs requested payroll data and loss information and calculated the Experience Mod at .95.

Solution
The CWCAs marketed the Workers' Compensation and secured a rate of $34,000. Recognizing the importance of making smart hiring choices to avoid future losses due to poor hiring practices, the CWCAs worked with the contractor to develop rigorous and effective hiring practices.

Result
The CWCAs were able to use their expertise in Human Resources and Workers’ Compensation to assist the contractor in understanding its costs and secure a savings of $25,000 per year.

Metal Fabricator Saves $40,000

Insured
A metal fabricator with annual revenues of $2,800,000 and 26 employees. The company manufactures metal sign-holders for various retailers.

Situation
With no history of carpel tunnels issues, the insured experienced a rash of carpel tunnel injuries unexpectedly, with two in excess of $80,000. This drove the company’s Experience Mod up to 1.72 and resulted in the policy being canceled by their Workers’ Comp carrier.

Assessment
The first claim was a legitimate case and the employee required medical attention and physical rehabilitation. The following claims occurred so rapidly that they were deemed questionable. There was also no clear language in place in the employee manual to address the situation.

Solution
After a detailed analysis, the Certified WorkComp Advisors (CWCA) designed and implemented a detailed and specific plan of action. The insured’s Return-to-Work program was replaced with a proper Recovery-at-Work plan and the outdated manual was rewritten. Injured workers were assigned appropriate light duty. The CWCAs conducted educational courses for medical providers, who previously had minimum knowledge of workplace injuries, Finally, the insured was placed with a carrier who more fully understood Workers’ Compensation procedures.

Result
The first injury, a 57-year old woman who had to have both wrists medically treated, returned to work through the Recovery-at-Work program, and the claim remained a medical only claim. This saved the company over $40,000, and an estimated .40 points on its Experience Mod. Further declines in the Mod are expected as a result of the improved injury management practices.

Injury management program reduces annual losses from $163,675 to $6,074 for machine maintenance company

Insured
This machine maintenance company employs 130 people in five states and has annual revenues of approximately $9 million.

Situation
Because the company is a multi-state risk, injury management was becoming a problem, especially since there was no onsite claims supervisor at any of the locations. The result were claims totaling $163,675 in 2005.

Assessment
Certified WorkComp Advisors (CWCAs) reviewed the situation and determined that the company needed comprehensive injury management services. The company had a great HR department but lacked the needed knowledge for handling claims and did not realize how each claim affected the overall cost. Therefore, a plan was developed to treat each situation as if all the employees were under one roof.

Solution
A four-step process to handle employee injuries in multiple locations was established:
1. Trained a Designated Claims Coordinator to oversee ALL claims, instead of processing claims through individual HR Departments.
2. The Claims Coordinator is proactive and is the key contact with the injured worker, medical staff, HR Department and insurance adjuster.
3. Initiated a medical-clinical relationship in each state.
4. Implemented a Zero Loss Time program by having jobs inter-related to expedite a quicker return to work.

Result
By working with the Certified WorkComp Advisors, the company saw losses of $163,675 in 2005 drop to $18,611 in 2006 and $6,074 in 2007. In addition, the Mod, which was at .97 in 2006, is expected to drop to .83 in 2008 that will result in an annual savings of $51,334.

Implementation of comprehensive Workers’ Comp program saves manufacturing company $3,000 on one claim

Insured
The insured is a wood products manufacturing company that employs more than 40 people divided into three work classes – sash/door/assembly millwork, sales people and clerical. The company works one shift, has a very stable workforce and consistently produces a high quality product.

Situation
Although the company has a highly competent management team, claims were being left up to the insurance company to manage and close. Open claims were found that resulted in a higher Experience Mod and higher premiums. One claim in particular had no activity for over a year and was adding seven points to the Mod. The insurance company also failed to explain the importance of a transitional duty program.

Assessment
Certified Work Comp Advisors (CWCAs) reviewed the loss runs prior to the employer’s renewal. They found open claims with no activity that could be closed prior to the renewal. The company was sending the injured worker home to recuperate versus returning to work on a transitional duty job.

Solution
The CWCAs put a risk management plan together that included, among other components, detailed procedures for returning an injured employee to work. They also aided the client in proper follow up procedures with the insurance companies to get claims closed.

Result
Because the plan showed the promise of significantly decreased claim costs, the wood products company became more attractive to other insurance companies. By being more insurable, it was able to secure more services and better pricing.
On one claim alone, the insured saved more than $3,000 as a result of the improved management.

Private School Learns a Lesson by Seeing Mod Drop 95 Points

Insured
The insured is a large non-profit school for physically and mentally-challenged students operated by Catholic Charities. It has 96 students and 400 employees.

Situation
The school was being cancelled by its existing carrier of 45 years because of a poor history resulting in a 300% loss ratio and a Mod tipping 1.88.

Assessment
It was determined that the situation was predicated on a lack of injury management. It would often take up to 37 days to report an injury, and once an injury was reported, there were no procedures in place as to the next steps. Both the Human Resources and Finance managers were new and had inherited an existing problem.

Solution
Meetings were held with both the HR and Finance Managers with the first order of business to secure a carrier. The first quote was $500,000 (the school had previously been paying $133,000.) Finally, a carrier was secured at $300,000 with a small deductible. A five-step plan was then put into place for the school:

1. Create a Safety Committee to establish a list of light-duty jobs to help an injured worker return to work sooner.

2. Utilize the services of a Registered Nurse who was on duty at the school instead of automatically calling an ambulance for every injury (it was determined the injured worker could often receive a higher level of care from a RN than the EMT).

3. Conduct employee-training sessions about what Workers’ Comp insurance does and does not do. By doing this, loss time was reduced, as both managers and injured parties learned the benefits of the return to work program.

4. Make sure a Patient Visitation form went with every injured worker to the clinic, so that the status was constantly updated and the injured worker could be matched to a light duty job.

5. Finally, establish a three-ring binder of 30-50 available jobs to help the return-to-work effort.

Result
With everything in place, the number of loss-time injuries was significantly reduced, bringing about a six-figure decrease in premiums every year and an overall savings of $500,000 in premiums over the last four years. The Experience Mod also dropped from 1.88 to .93.

Implementation of Zero Lost Time Program Lowers Mod & Returns $177,840 To Plumbing Contractor

Insured
The insured is a residential plumbing contractor with 265 employees and annual revenues of $40 million.

Situation
The company was in a transitional stage causing a higher-than-average claims activity. The result was a large number of open claims that included indemnity and an Experience Mod of .98 and rising.

Assessment
Certified WorkComp Advisors (CWCAs) reviewed the situation and realized that the Experience Mod was being driven up not only by the number of claims, but also by the number of malingering claims that were not successfully closed. In fact, because there was no injury management process in place, 80% of the lingering claims included indemnity.

Solution
Putting the number-one focus on injury management, the CWCAs implemented a Zero Lost Time Program. They set up a model program by creating a transitional job bank, establishing a relationship with the local medical provider, and developing a comprehensive injury prevention package. They also set up educational meetings with all site managers, and created an incentive program built around work safety and loss time. .

Result
The company's loss ratio decreased over a two-year period from 80% to just 9%. Along with a drop in the Experience Mod from .98 to .66, the company received a 25% Experience Credit from the carrier due to the decrease in the loss ratio, resulting in a total savings of $177,840.

Electronics Manufacturer Saves $85,500 in 3 years

Insured
The business is an electronics manufacturer. The company employs 110 workers and has gross revenues of $30 million.

Situation
After splitting from a large national manufacturer, the company saw its Mod jump to 1.45, causing uncompetitive labor costs and a loss of profitability.

Assessment
It was determined that the increase in the Mod was a result of an increase in the severity of repetitious injuries to hands and wrists, due to the type of light assembly work involved. The Mod was also being driven up by a number of malingering claims and too much reliance by the manufacturer on their insurance company to manage the claims after they happened, resulting in higher premium costs. The manufacturer had no established return-to-work procedures nor 24-hour claim reporting requirements.

Solution
The focus was on lowering the severity of the hand and wrist injuries and improving the outcome of the malingering claims. A Certified WorkComp Advisor (CWCA) set up an occupational clinic relationship with pre-employment testing, including grip testing to eliminate potential future claims. A clinical relationship was also put in place for existing claims, the CWCA set up a return-to-work process and made the clinic aware that light duty was available as a return-to-work option. This assured early intervention, proper medical treatment and a speedier return to work. He also trained supervisors on 24-hour reporting requirements and the impact that Workers’ Compensation has on the employer’s costs, and started regular safety trainings. Furthermore, he worked with management to demonstrate the value of this process by showing them how much money they would save.

Result
Malingering has been eliminated and outcome from severe claims has been reduced from $35,000 to $6,500, resulting in savings of $85,500 for three years.

General Contractor’s Workers’ Comp drops $101,207 in just two years

Insured
A commercial general contractor with 110 employees and revenue of $52 million in 2006.

Situation
A 62% Workers’ Comp surcharge drove up the company’s Experience Modification Factor jumped to 1.12, costing them an additional premium of $185,000 per year. It also restricted them from bidding work for large corporations that required a 1.00 or lower Experience Mod.

Assessment
A review of the 2004-2005 Experience Mod work sheet, the loss data from the previous four years and OHSA logs revealed that the number and severity of claims was higher than expected.

Solution
A Certified WorkComp Advisor (CWCA), showed the general contractor how they were paying the insurance company $3 for every $1 paid in claims. He designed an aggressive rehab plan of action: installing a safety committee, including training and recordkeeping, providing administrative support for the company by running the WorkComp process, and training the safety coordinator. In addition, he worked with the client in establishing a relationship with Occupational Medical Center, initiating a claim reporting system and a return-to-work process. He also assisted them is completing necessary job descriptions.

Result
Experience Mod went down from 1.12 to 1.03, with a projected 2007-2008 Mod of .95. Because of a radical reduction in the number and size of Workers’ Comp claims, additional discounts were negotiated, lowering the premium cost from $430,302 in 2004 to $394,000 in 2005 and $365,318 in 2006.

Supervisor Training Cuts Claim Frequency and Cost

Insured
The insured is a social service agency with 390 employees in 22 locations. The organization provides occupational training and habilitation services to developmentally disabled adults.

Situation
In one six-month period, the employer experienced 27 workers’ compensation claims totaling $89,000.

Assessment
A Certified WorkComp Advisor (CWCA) looked into the situation and discovered supervisors played no role in managing their employee’s injuries. It was left to the employee to seek medical attention and return to work when his or her doctor recommended it.

Employees routinely went to the hospital’s emergency room or to their personal primary care physician. These doctors ordered lengthy periods of rest and made no effort to assess the employee’s work capacity. Supervisors made no effort to stay in touch with employees or return them to work on modified duty.

Solution
In May of 2006, the CWCA conducted a training session with the organization’s 34 supervisors. The training explained how claim costs impact workers’ compensation insurance premiums; how to work with an occupational medical clinic; and how to support and manage a comprehensive return to work program.

With this new awareness, supervisors took steps to resolve safety issues and employee behavioral problems. They began directing employees to an occupational clinic whenever possible. They stay in contact with employees during any disability and actively seek opportunities for modified duty.

Result
In the six months since the training, the employer’s claim frequency was cut in half (only 11 claims). Amazingly, these 11 claims total less than $1,000. The CWCA is now planning a celebration to congratulate the insured’s supervisors for this remarkable turnaround and to encourage on-going vigilance.

On-the-Ball Injury Management Lowers Reserves and Saves $$$

Insured
The insured is a new home contractor.

Situation
An employee suffered a laceration to his finger while using a saw. The carrier set the highest possible reserves for disfigurement, permanent loss of use, and temporary disability warranted for this type of injury.

Assessment
Knowing that insurance carriers routinely set high reserves on claims and keep those reserves active until the claim is closed, a Certified WorkComp Advisor (CWCA) resolved to keep close tabs on every aspect of the claim. Along with skilled in-house claims specialists, the CWCA worked with the employer, medical providers and claims adjusters to continually assess the case and adjust reserves accordingly.

Solution
As soon as the employee was released to full duty, the CWCA asked the insurance carrier to remove any remaining reserve for disability. A short time later, the carrier made a payment to the employee for scarring, and the CWCA requested they remove any remaining reserves for disfigurement. Later, the CWCA argued successfully to lower reserves for permanent loss of use.

Result
By the insured’s next valuation date, reserves on this claim had been lowered by more than $57,000. As a result, the client’s experience mod rating was 19 points lower than it otherwise would have been. This translated into a premium savings of more than $4,000.

 

Correct medical diagnosis keeps employer from feeling the pain of a mod increase

Insured
The insured is a water and sewer pump company and employs 27, locally. There are additional employees in two other states as well.

Situation
An employee had undergone gall bladder surgery in late January. He was released back to work full duty (without restrictions) three weeks later. On his second day back to work, this employee was moving some cross ties and herniated his healing surgical incision, necessitating further medical and surgical interventions.

Assessment
Certified WorkComp Advisors (CWCA) began investigating this claim and determined further assessment was necessary. An independent Registered Nurse with experience in occupational injuries was engaged and began an investigation. After reviewing the circumstances of this injury and speaking with the employer to get specifics about the employee’s recent abdominal surgery, the nurse concluded that the herniation was a result of complications from the surgery.

Solution
The independent nurse alerted the carrier to this determination and the claim was denied under Workers’ Comp. The carrier agreed that this herniation was a complication of and was directly related to the recent abdominal surgery. The claim was instead submitted to the employee’s health insurance plan for coverage.

Result
This claim was closed in less than three weeks, saving the employer the cost of medical care and potential future wages. Disability guidelines report that a typical uncomplicated incisional hernia costs an average of $21,102 ($10,001 in indemnity and $11,101 in medical expenses). Had this claim been accepted under Workers’ Compensation, it would have increased the employer’s Experience Mod eight points, or a total of approximately $15,000 over three years (based upon the rate & payrolls remaining constant over the three year period).

 

Supervisor training helps change injury pattern

Insured
A manufacturing company with 175 employees, total salaries of $6.6 million and annual revenue of $14 million in 2005.

Situation
From 2000 to 2006, the employer’s average annual Workers’ Comp costs were in excess of $80,000 per year. During that same period the manufacturer averaged 35 claims per year, causing the Experience Mod to rise to 1.12.

Assessment
Certified WorkComp Advisors (CWCA) reviewed the client’s WorkComp program in February 2006. They found that the employer had no established return-to-work program nor did he have a policy regarding the reporting of on-the-job injuries. They also found that the supervisors in the manufacturing plant were unaware of how Workers’ Compensation works and how they can have an impact on the employer’s costs.

Solution
The CWCAs began by implementing the basic programs developed by the Institute of WorkComp Professionals including return-to-work, light duty assignments, employee-hiring practices and injury reporting procedures. They then held an education session for supervisors that proved to be the most enlightening part of the program. The CWCAs explained how the Experience Mod worked and how it was affecting the employer’s bottom line. They also discussed the importance of the return-to-work program and how supervisors, since they have the most direct contact with the employees, play a significant role in keeping the overall claim dollars down.

Result
Just six months into the current policy term, there have been only six claims, three of which were for reporting purposes only with no dollars paid. The cost of the remaining three claims has totaled only $3,200. While it’s too early to make comparisons with previous years, it appears that the supervisor training is paying off. The employer and the supervisors were so pleased with the information and the savings that in August, they invited the CWCAs back to speak. At that meeting, several supervisors said they had brought what they had learned in the first meeting back to the employees and were able to see a marked difference in attitudes. The supervisors and employees now see that they are truly a part of the process and how they can help make the company for which they work more profitable.

The Case of the Disappearing Claims

Insured
This case involves a Southern California fit and finish contractor with a $1.2 million Workers’ Compensation annual premium. Because of financial issues, the company does not meet self-insurance requirements.

Situation
In 2003, the company’s Workers’ Compensation claims amounted to $535,000. Much of the difficulty in managing the claims process resulted from the fact that the company operated crews in some 50 work sites at any given time.

Assessment
WorkComp Advisors analyzed the situation and introduced improved claims management processes in 2004. In addition, the Advisors’ Claim Cost Coordinator found mistakes on the company’s Experience Modification worksheet and had them corrected plus reduced filed claims over the last two years by over $127,000 to lower their new Experience Modification Factor.

Solution
In 2004 the Advisor introduced Post Hire/Pre-Placement processes; Medical Clinic Selection protocols and a Supervisor Claims Responsibility Management Program with the support of a trained management process. Supervisors and a new Workers' Comp Claim Manager were trained in how to control claims including two critical issues:

1. The supervisors were shown the 2003 claims reports so they could see what the premium costs were doing to the company’s bottom line. They understood the message and responded by saying that Workers’ Compensation claims were costing “30 pick-up trucks a year.”

2. A process was set in place in which the supervisors became responsible for discipline, reporting all claims within 24 hours, and checking out job applicants before they were hired to determine the history of job-related injuries.
The company’s new Work Comp Claim Manager effectively managed claims and monitored their Early Return-to-Work program.

Result
In 2005, a year after the program was put into place, Workers’ Comp claims had dropped to $13,000.
The management processes plus the Supervisor Claims Management Responsibility program was then further enhanced to make certain the dramatic gains would continue:

• Each supervisor without a claim during a 12-month period receives a bonus.

• Each year, individual supervisors are given a claims budget and they must stay within that budget to qualify for the annual bonus.

Even difficult Workers’ Compensation situations such as this one can be turned around with the proper expertise and installing a process that changes the culture and delivers continuous results.

 

Comprehensive WorkComp Program Cuts Claims Costs

Insured
The business is a masonry contractor located in Buffalo, MN, with 30 employees and annual revenue in excess of $3 million (2004). The company constructs residential brick walls, patios, sidewalks, floors and driveways

Situation
In a three-year span from 2002-2005, incurred injury claims losses of $123,107. As a result, the employer saw her company’s Experience Modification Factor (Mod) rise 50%, from 0.91 to 1.37.

Assessment
A Certified WorkComp Advisor (CWCA) reviewed the client’s WorkComp program. He found that the employer was “shopping for rates” to save money on Workers’ Compensation coverage rather controlling work-related injury costs. As a result, the employer had no written policy for dealing with employee injuries. As a result, employees were not notifying the employer at the time of injury and were seeing their own chiropractor, who happened to be related to an employee of the company and who excused employees from work for indeterminate periods of time. Furthermore, the employer was not taking advantage of a state law that allows companies to self-pay indemnity costs and go to its WorkComp carrier for only the medical portion of an injury claim. In two sample cases, this failure cost the employer an additional $10,000 over three years for a claim of $1,800.

Solution
The CWCA began by showing the employer how little rates affect overall WorkComp costs using the Institute’s “Iceberg” illustration, where the rates are just the “tip of the iceberg” while the actual costs are what lie below the surface. Then the CWCA addressed these cost issues in several ways. First, he implemented an “indemnity review” process that helps the employer to determine when to self-pay indemnity costs. Next, using the Institute’s “HR That Works” program, he provided the employer with an employee handbook that, among other things, spells out in writing an injury-reporting program that requires immediate notification upon occurrence of an injury and a return-to-work program that defines the “light duty” jobs – such as inventory work – that employees will perform if physically unable to perform their regular jobs. Finally, the CWCA assisted the employer in establishing a clinic relationship program with The Buffalo Clinic, a long-time local medical provider, which directs employees where to go for covered medical treatments.

Result
Since September 2005, the employer has not filed a claim for employee injury losses. Self-paying indemnity alone will save the company up to 70% of its total claims costs. In addition, the written reporting and return-to-work policies have significantly cut the number of work days lost while the clinic relationship program keeps everyone – the employee, employer and medical provider – informed about the employee’s recovery and working towards the employee’s return to full duty.

Note: Self-funding of indemnity costs requires careful consideration of a number of factors, including state law, particular characteristics of exposure, financial condition of the company and an understanding of the risks and resources it requires. You should seek the advice and guidance of a CWCA to better understand if it is appropriate for you.

Back-on-the-job programs bring big returns to employers

Case Study #1

Insured
School for "Exceptional Children" (autism, down syndrome, etc.); 300 employees; safety committee 19 staff members

Situation
1.88 experience mod, 300% loss ratio and dropped by carrier

Assessment
Claims related to interaction with the children when they have an episode. Most were soft tissue injuries. There was no return to work program and the safety committee did not have a list of light duty jobs.

Solution
Using Job Bank Worksheet, each department developed a list of jobs or support functions that could be done if there were an extra person in the department. The jobs could take one hour or a few days. The lists are maintained in the HR/Finance Department. When an employee is on light duty they report to that department to get their assignment.

Result
Mod projection for coming year: 1.45; insured received $32,000 back on audit and distributed as a $150 holiday bonus to all employees.

Case Study #2

Insured

Trucking Company

Situation
High rate and large number of claims - $800,000 premium

Assessment
No return to work program.

Solution
After reviewing the back-on- the-job options, the trucking company decided to stop outsourcing its security guard function and make it a "light duty" job. Injured workers sit in the booth and collect paper work from incoming trucks. Another light duty job involves scanning the bar codes of boxes as they pass on a conveyor belt. By putting a chair on wheels, the employee simply sits and presses a button as the box goes by.

Result
Self insuring the light duty on one case alone, the $4000 in indemnity saved $20,000 in total premium over a 3-year period.

Economic Benefits of a Back-on-the-Job Program
• Reduced workers' compensation costs
• Lower loss ratios and experience modifiers help control premiums
• Lower medical costs and faster recovery time
• No wage and training costs for substitute employees
• Less overtime to make up for lost production
• Elimination of work delays when experienced worker returns
• Reduced stress on co-workers who were expected to perform additional duties
• Improved employee/management relationships
• Litigation is often avoided
• Discourages fraudulent claims
• Identifies cross-training opportunities

How Employees Benefit from a Back-on-the- Job Program
• Maintains the employment relationship, which provides job security and financial independence
• Minimizes the loss of physical fitness and muscle tone due to inactivity
• Maintains employer pension plans, medical benefits, dental plans, and group life insurance
• Maintains vacation/sick day benefits
• Maintains contact with co-workers and friends
• Focuses interest on the workplace and not the disability
• Maintains dignity and self worth by remaining productive
• Maintains necessary job skills
• Alleviates feelings of dependency and lack of control
• Being able to return earlier to a healthy and productive life

Trucking Company on The Right Road by Saving $20,000 in Total Premium

Insured
Trucking Company

Situation
High rate and large number of employee injuries - $800,000 premium

Assessment
No return-to-work program. Analyzed claims and showed employer the true cost of the insurance company paying indemnity to injured employees.

Solution
After reviewing the return-to-work options, the trucking company decided to no longer outsource its security guard function, but make it a “transitional duty” job. Injured workers sit in the booth and collect paper work from incoming trucks. Another light duty job involves scanning the bar codes of boxes as they pass on a conveyor belt. By putting a chair on wheels, the employee simply sits and presses a button as the box goes by.

Result
Self insuring the transitional duty on one case alone, the $4,000 in indemnity reduced the premium by $20,000 over a three-year period.

Local pro teams hit home run by saving $82,657 through agent

Recently, a Certified Workers' Comp Advisor (CWCA), wrote Work Comp for two minor league professional baseball teams. Neither team knew the truth about the Work Comp system.

The teams had very special circumstances due to the seasonality of the sport, since late season injuries often drag out and players do not return to work until the next season. Also the very low wages that the players received relative to the national average worked against them.

However, by using the IWCP education, the CWCA was able to make a tremendous difference and saved the first team $43,548 and the second $39,109.

The CWCA realized that the low wages were also an advantage. Whereas many employers would not continue to pay wages for an employee on the disabled list, these teams benefited by providing light duty or transitional duty for the employees and took advantage of the 70% credit opportunity that the ERA rule in South Dakota offers.