Tips On Keeping Your Costs Down
The cost of workers' compensation insurance is within your control. If you take some time to understand how the system works, how
your premiums are calculated, and what options are available, you will be able to keep your payments low.
Here are seven cost-saving moves to investigate with your workers' compensation insurance agent:
1. Make sure your classification is correct. Misclassification is one of the most common reasons for overpaying WC premiums.
2. Conduct a payroll audit. WC premiums are based on your regular payroll figures, excluding overtime. Most states allow you to deduct OT pay to straight time in calculating payroll.
3. Use a deductible. Currently 27 states will permit employers to reduce their workers' comp premiums by paying a deductible, which can lower your premiums by as much as 25%.
4. Make sure your experience rating is correct. If you pay more than $5000 in WC premiums, your company receives an experience rating. This rating compares your company's claims history to that of other firms in your industry. The higher your claims, the riskier you are to insure, and the higher your premiums.
5. Use managed care to reduce medical costs. Talk to your insurance agent about finding a workers' compensation insurance plan that uses managed medical care to treat injured workers.
6. Institute safety programs. Company-wide safety programs help reduce the numbers of workers' compensation claims, which will result in lower premiums.
7. Get injured workers back to work. The quicker an injured worker returns to work, the lower your disability claims will be. You may need to modify injured worker's assignments or place workers on light duty