Not all insurance is created equally. While one motor vehicle accident has the potential to cause increased auto insurance premiums, workers’ compensation claims have varying levels of impact on overall workers’ compensation insurance. Luckily, there are steps employers can take to reduce those impacts.
One of the most overlooked variables relating to workers’ compensation insurance is the impact and duration of the injured employee’s absence from the job.
“When an employee is out due to a workers’ compensation injury, up until the end of the seventh day, that employee is not eligible for workers’ compensation disability benefits,” said Caryl L. Russo, Senior Vice President, RWJBarnabas Health Corporate Care. “While the employer is responsible for reporting the accident to their workers’ compensation insurance for medical coverage and to the Occupational Safety and Health Administration (OSHA) as a medical claim, the injured employee would be required to use any sick time or paid time off.”
Russo continued, “Even though the employer will see an impact from indirect costs, such as the loss of productivity, training replacement employees or repairing damaged equipment, the overall impact is less severe and the cost to the employer is much less.”
However, at the eighth missed shift, the injury becomes a recordable lost-time claim under Occupational Safety and Health Administration (OSHA) regulations – resulting in a much greater level of impact and a direct impact on the experience modification factor (MOD). A factor in determining how much a company will pay in workers’ compensation premiums, MOD rates are determined by the industry a company operates in and how many OSHA recordable lost-time claims it accumulates.
“An injury that becomes a lost-time claim with an absence of eight days or more conveys that there is something different about this particular claim. This increases the cost to employers and could even signal an OSHA site visit,” said Russo. “The goal for a business is to get employees treated properly and back to work – even if it is in a modified capacity – to avoid the OSHA recordable lost-time claim and effectively and efficiently manage their MOD rate.”
At RWJBarnabas Health Corporate Care, all staff members are trained to understand the importance of getting patients back to work before the eighth day. Board-certified occupational medicine physicians who understand workplace policies, job demands, and the work environment are actively involved in providing care.
“We recognize the seventh day is a critical marker. Once an injury becomes a lost-time claim, it costs significantly more to the employer,” said Tanisha Taylor, MD, senior medical director at RWJBarnabas Health Corporate. “Our staff is focused on that seventh day. When it is possible to return an injured employee to work before that point, we will try to do so but we don’t jeopardize the care of the employee.”
“It’s critical to monitor patient recovery up to the maximum medical improvement. If there is some level of functional loss due to an injury, the patient may not return to 100 percent, but we will continue to monitor them as long as required,” Dr. Taylor added. “However, it is well documented that if an employee is out for more than six weeks due to an injury, they are likely not coming back.”
Russo has one final tip to remember when dealing with workers’ compensation claims and employee injuries – count every day as an absence.
“There are no business days in workers’ compensation. Every day, even weekends that may not be regularly scheduled shifts, count against those seven days so the clock is constantly ticking,” she says. “But, by encouraging a return to work – even on a modified basis – before that eighth absence, employers can ultimately, effectively manage their costs.”
