3 Cost-Saving Strategies for Workers' Comp

When it comes to protecting your company’s bottom line, your third-party administrator (TPA) is a valuable partner in keeping your workers’ compensation costs in check. Your TPA not only offers you access to valuable cost-saving opportunities, they also provide training and educational opportunities to help you keep your team safer and your workers’ comp costs lower. Here are three steps you and your TPA can take now to keep your workers’ comp costs in check.

Verify your payroll

Your workers’ compensation premiums are based, in part, on your regular payroll numbers. Verifying and ensuring that they are correct can help you ensure that your premiums remain in line with your current payroll costs.

Since most states allow employers to deduct overtime pay for the purpose of calculating your payroll, many employers work with a third-party administrator (TPA) to help them ensure that the payroll numbers reported are correct. Your TPA can help review the reporting requirements for your state and ensure that you’re getting the best premium rates possible for your company. Check out Payroll True-Up Reporting Period to learn more about the Ohio BWC’s annual payroll reporting requirements.

Create a culture of safety

When it comes to keeping your workers’ comp costs in check, the best way to avoid skyrocketing premiums is to prevent or limit the number of injuries in your workplace. A company-wide safety program that reduces the number of accidents in your workplace can lead to significant cost-saving potential.

Managers and supervisors should ensure that team members have all of the proper protective equipment needed to do their jobs. Additionally, your safety team should regularly inspect your facility for safety hazards and look for other ways to stop accidents before they happen.

Supervisors should also encourage employees to be on the lookout for and report any safety issues or potential hazards as soon as possible. Incentive programs that reward reporting concerns and achieving milestones show employees that your company places great value on safety. Consider having a catered lunch if your company goes more than 3 months without an accident or creating a “Safety Star” program to recognize employees who go above and beyond to keep the workplace safe.

Your TPA can work with you and your team to identify the areas of your operations that are most prone to injury, make recommendations about advanced safety considerations, and provide your management team with access to valuable safety training and information. When management demonstrates that safety is an important part of doing business, employees will take safety more seriously as well.

Group Experience Rating

When it comes to cutting your workers’ comp costs, nothing does quite as much as participating in a group experience rating program. Group experience rating programs give employers access to lower premium rates than they could achieve individually.

Rather than looking at each company separately, the BWC treats the group of companies participating in a group experience rating program as one large company. The group experience rating plan is annual and ratings are recalculated each policy year.

Employers pay their premium based upon the reduced rate achieved through participation in group experience rating. The BWC determines a group’s rate by calculating the experience modifier using the combined experience of all members of the group.

Cost-saving opportunities vary depending on claim experience, industry, and payroll history. All participants must be a member of a sponsoring organization, such as a local chamber of commerce. Check out Focus on Savings: Group Experience Ratings to learn more about this valuable cost savings opportunity.

Advocating for you

While the Ohio BWC may not require your company to use a TPA, the cost-saving programs and expertise of these groups can lead to reduced risk and lower overall costs for your company. Partnering with a TPA is an investment in your company’s future that can create a safer workplace for your employees and improve your bottom line.

Contact us today to learn more about our Workers’ Comp TPA services and request a quote. Stay up to date on all things Sheakley by subscribing to our blog and following us on social media. Join the discussion by commenting below.