Early Reporting Can Cut Claims, Premium Costs

How long you wait to notify your workers’ compensation insurer of a workplace injury can make a significant difference in the cost of that claim.

When your premium is calculated, one of the key elements that your carrier takes into account is the cost and frequency of prior claims during the past few years.

In short, by improving your organization’s injury notification times, you can also positively affect the cost of the claim, which in turn can help reduce your overall workers’ comp premiums going forward.

The numbers speak for themselves

A National Council on Compensation Insurance study looking at the cost of a claim based on the delay between incidence and notification found that the longer an employer waits to file a workers’ comp claim, the costlier it becomes:

• A two- to three-week delay increases the cost by 13%,
• Four to six weeks increases the cost by 25%,
• Seven to 12 weeks ups the cost by 34%, and
• More than 12 weeks increases the cost by 91%.

Why does early reporting work?

The sooner medical treatment begins, the better the outcome.

For a workers’ compensation claim, the sooner your insurer knows about an injury to one of your workers, the sooner they can start collecting information and plan for appropriate treatment options.

If medical treatment is delayed, the likelier it is that costs will mushroom both in terms of medical costs and lost time from work, which needs to be compensated.

If you notify your carrier when an injury occurs and they can arrange for the worker to begin the medical treatment, it is likely that the length or severity of the treatment program will be less.

For the injured worker, this means a shorter recovery time, better prognosis for general health and return-to-work outcomes, and probably a more positive attitude toward their injury and the workplace.

For you as the employer, this translates to less money allocated to covering wages and treatment for the injured worker, and less disruption to your workplace to cover their duties.

Claims reporting tips:

• Develop internal procedures for reporting injuries. Ensure that your staff know the importance of reporting injuries immediately and that they are aware of your reporting procedures.
• Don’t question employees’ integrity when they report an injury.
• Understand the legal requirements for reporting workplace injuries.
• Report a claim immediately after learning about it.
• Encourage safe work practices and ensure that employees are aware of and practice proper safety techniques.
• If an injured worker has partial capacity for work, you can provide alternative duties while they heal up. This can have a positive impact on potential disability levels, and on the premium impact of lost time.