Returning to work
Successful programs can help lower employer costs, including workers' compensation
- For the first time in years, workers’ comp costs have increased, likely due to the recovering economy and rising medical costs.
- Returning an injured worker to the job can help avoid direct costs to employers’ premiums, as well as “soft” costs such as retraining replacement staff.
- A good return-to-work program includes open lines of communication and willingness to make accommodations, experts say.
In the aftermath of the Great Recession, workers’ compensation costs for employers nationwide began to drop steadily following years of increases. From 2005 to 2010, employer costs fell from $89.3 billion to $71.9 billion, according to the National Academy of Social Insurance.
This trend is reversing, however. From 2010 to 2011, employer workers’ comp costs increased more than 7 percent to $77.1 billion nationally, NASI stated in a 2013 report. The amount of money an employer pays per $100 of covered wages also increased in 2011, to $1.27 from $1.24 the previous year.
Although many reasons for these increases are out of their hands, employers can take certain actions to help mitigate costs – namely getting injured employees back on the job.
“If someone goes back to work soon, [employers] are paying less in disability payments and their workers’ compensation program doesn’t have to pay for the supplemental job displacement benefits,” said Laura Stock, director of the Labor Occupational Health Program at the University of California, Berkeley. “The more people are back at work, the more workers’ compensation costs will be reduced.”
Benefits of returning to work
When someone comes back to work following an injury, he or she may eventually not need workers’ comp benefits, according to Elisabeth Simpson. Simpson is a senior consultant with the Job Accommodation Network, a service from the Department of Labor’s Office of Disability Employment Policy that provides guidance on workplace accommodations and disability employment issues.
“From a financial perspective, it reduces the costs associated with workers’ compensation. From the perspective of the employee, it keeps their employment,” Simpson said. “It’s a win-win.”
A single workplace injury can negatively affect a company for years, even after the employee has healed and returned to work, said Sean Mayer, an account executive in Sioux Falls, SD, for Holmes Murphy & Associates, a risk management and insurance brokerage firm. Most states have an experience modification factor which influences how much an employer pays in workers’ comp premiums, Mayer said.
In many situations, an injured employee has a window of time in which to return to work before the claim negatively affects the experience modification factor.
The time period depends on the state. In Iowa, for example, an injured employee returning to work within three days will not greatly impact an employer’s workers’ compensation premium. But if the return takes more than three days, the employer would see its premiums increase, and the claim would stay on the record for three years. Other states are different – in South Dakota, the window of time is seven days.
Getting that injured worker back through the front door helps avoid this premium hit, Mayer said. Workers do not have to return to their former job, however – they can perform any task that is allowed by their doctor. They may not even have to work a full shift, Mayer said, although some states require a certain number of hours to be worked.
The benefits for employers can be substantial. In addition to direct savings on premiums by returning workers to the job, Mayer said employers can save on several “soft” costs. When an injured employee is off the job, employers may hire additional help, which Mayer said is essentially paying twice for the same job – the injured worker’s salary and the replacement worker’s salary. Additionally, costs could be associated with training the replacement worker, or with shifting employees around to cover for the injured worker.
In some cases, $10,000 in medical expenses can add up to as much as $40,000 in the long run when lost time, retraining and other often-overlooked costs are included, according to Mayer.
“Claims cost a lot more when you factor in the soft costs,” he said.
Injured employees also benefit by returning to work, Simpson said. When injured workers are on workers’ comp, they may receive only a portion of their salary, the percentage of which varies by state. Going back to work gives them a full salary. Some benefits are more intangible, according to Mayer, such as workers feeling like they are still part of the team and getting to see people every day, as opposed to sitting around at home.
The path to returning to work is not always easy, as fear may make some employees hesitant to participate in a return-to-work program.
In June, the Workers Compensation Research Institute released a series of reports that concluded workers who fear being fired as a result of their injury take longer to return to work than employees who feel secure. On average, workers fearing termination stayed on disability four weeks longer than other workers. About 20 percent of workers who feared being fired reported not working – twice as many as workers who felt their job was secure, WCRI found.
The studies’ results did not surprise Mayer, who has encountered many employers suggesting the employee may have committed fraud when the workers’ comp case first begins.
“They feel anything that’s halfway suspicious or if they don’t like the person, they’re just going to shoot for fraud on it,” said Mayer, who advises employers against immediately pursuing allegations of fraud, as it can feed employees’ fear and make returning to work difficult.
An adversarial relationship between employers and employees is not uncommon, according to Stock. Employees may feel workplaces are unsafe or worry about being retaliated against for reporting hazards, and employers might blame workers at times for their own injuries. (Stock was quick to add that most injuries occur because of unsafe conditions.)
When fear exists in a workplace and nothing is dispelling that fear, workers will not speak up about safety, Stock warned, potentially leading to more injuries. “Fear, to me, is a symptom of a workplace that’s not functioning the way it should,” she said.