Purpose of Workmans' Compensation
The system of workers' compensation serves as an economic incentive for employers to prevent accidents and illness among employees, since liability for medical costs and the income lost by placing workers in hazardous environments can easily exceed the costs of establishing safe working conditions.
The cost of Workers' Compensation Insurance is based on the gross payroll, type of business, loss experience and carrier or state insurance rates. Credits may be available in different states for a Written Safety Plan, Managed Care or a Return-to-Work Program.
Written Safety Plan
Written Safety Plans are written document that describes the process for identifying the physical and health hazards that could harm workers. It includes procedures to prevent accidents, and steps to take when accidents occur. The written safety plan is the blueprint for keeping workers safe and it abides by state laws and OSHA requirements and regulations.
Managed Care
In some states, Managed Care permits employers to select providers of medical services for injured employees, and they may opt to utilize this system for the delivery of quality medical care, at a reduced premium. Aside for using Managed Care Networks to treat patients, they also often teach safety techniques that can prevent accidents from recurring or happening in the first place.
Return-To- Work Program
A Return-to-Work Program, often referred to as RTW, is a unique program offered to employers to assist their employees in returning to their occupation following a work-related illness or disability. This is also referred to as Light Duty, since the job may be modified to meet the restrictions that were placed upon this particular employee when he or she was injured.
Experienced Modification Factor
The rating board in each state assesses whether a company’s claims are greater than or less than average by comparing the payroll and claims history with other businesses of the same industry. If the claims are less than average, the account will be credited. If the business has higher losses than the rest of that industry, that is called a Debit Mod and will cause an increase in premium. Everyone starts off with a Mod Rate of 1.00. Values less than 1.00 reflect a better than average claims history, while values over 1.00 reflect a worse than average claims history. In most states the insured will need to be in business for three years with a premium higher than ten-thousand dollars to receive an Experienced Mod. A copy of the Mod worksheet can be requested, for a minimal fee, from the State Rating Bureau.
Find out more tips and ideas about how to prevent claims by calling our office and speaking to an experienced member of our loss control team.
Audit
Most standard Workers Compensation policies will be audited at the end of the policy term based on the actual payroll remuneration in lieu of the estimated numbers on file. The insured will be required to pay any additional premium that is reflected on the audit, or they may receive funds back from the carrier. That return premium is usually applied to their current policy balance.
PayGo Workers Compensation
A good way to avoid a surprise additional premium audit is to sign up for a Pay-as-you-go policy. Many of our direct carriers offer this PayGo option with a payroll reporting plan bi-weekly, monthly or otherwise. This set-up requires a payroll provider or the insured to directly report payroll for a specific time period. Accordingly, the invoice that follows will mirror the confirmed payroll. This is ideal for a seasonal business, or a large company, or an entity where payroll that fluctuates.
Get your quote today, online or by contacting our office and speaking to the underwriting team.
What is the difference between "Workers Comp Insurance" and "Disability"?
While Workers Compensation covers only for injuries that occurred on the job, Disability Policies cover the workforce in the form of weekly payments, should an employee be unable to work for any reason.
The weekly check that the claimant receives will be a percentage of their usual wage. Being that this is a statutory coverage, premium rates are regulated.
Call today to find out if Disability is required in your state and sign up to be in compliance.
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