Controlling Workers’ Compensation Costs by as Much as 20% - 50%

All Rights Reserved. Copyright Disclaimer Under Section 107 of the Copyright Act of 1976. Allowance is Made for “Fair Use” for
Purposes Such as Criticism, Comment, News Reporting, Teaching, Scholarship, and Research. Fair use is Permitted by Copyright
Statute that Might Otherwise be Infringing. Education, and Personal Use Tips Included. No Copyright Infringement Intended.
Cited Work(s) Are the Property of the Author(s) / Copyright Holders. This Information Does Not Constitute Financial, Tax,
Insurance, nor Legal Advice. Consult with a Licensed Professional Before Undertaking Any Important Business Decision(s).
Richard Swartzbaugh

Mastering Workers’ Compensation Costs
2
What is Workers’ Compensation?
Workers' compensation is a form of insurance providing wage replacement and medical benefits to employees injured
in the course of employment in exchange for mandatory relinquishment of the employee's right to sue their employer for the
tort of negligence. The trade-off between assured, limited coverage and lack of recourse outside the worker compensation
system is known as "the compensation bargain". One of the problems that the compensation bargain solved is the problem of
employers becoming insolvent as a result of high damage awards. The system of collective liability was created to prevent
that, and thus to ensure security of compensation to the workers. Individual immunity is the necessary corollary to collective
liability. While plans differ among jurisdictions, provision can be made for weekly payments in place of wages (functioning
in this case as a form of disability insurance), compensation for economic loss (past and future), reimbursement or payment
of medical and like expenses (functioning in this case as a form of health insurance), and benefits payable to the dependents
of workers killed during employment. General damage for pain and suffering, and punitive damages for employer
negligence, are generally not available in workers' compensation plans, and negligence is generally not an issue in the case.
These laws were first enacted in Europe and Oceania, with the United States following shortly thereafter.
Workers' compensation statutes are intended to eliminate the need for litigation and the limitations of common law
remedies by having employees give up the potential for pain- and suffering-related awards, in exchange for not being
required to prove tort (legal fault) on the part of their employer. The laws provide employees with monetary awards to
cover loss of wages directly related to the accident as well as to compensate for permanent physical impairments and
medical expenses.
The laws also provide benefits for dependents of those workers who are killed in work-related accidents or illnesses.
Some laws also protect employers and fellow workers by limiting the amount an injured employee can recover from an
employer and by eliminating the liability of co-workers in most accidents. US state statutes establish this framework for most
employment. US federal statutes are limited to federal employees or to workers employed in some significant aspect of
interstate commerce. The exclusive remedy provision states that workers compensation is the sole remedy available to
injured workers, thus preventing employees from also making tort liability claims against their employers.
https://en.wikipedia.org/wiki/Workers%27_compensation

3
Worker’s Comp costs can be one of your Company’s greatest “out of control” costs, or, YOU can but in a proven 19-
step system to reduce Workers’ Comp costs by as much as 20% - 50%, and utilize critical metrics to address:
Why workers’ compensation metrics are important
The formulas for how to calculate 5 critical metrics
How to leverage these metrics to make an impact at your organization
Following the step-by-step instructions in 19-Step system for the calculation and application of critical metrics will
address:
Workers’ comp viewed as a cost of doing business
Getting management to understand value of return to work
Convincing policy holders to embrace a worker recovery program
Lack of informed and effective employer involvement in WC claims issues
Stakeholder apathy
Managers and supervisors not taking seriously their duty to protect workers
Avoiding Workers’ Comp mistakes & loopholes will help drive three major points:
Drivers of human behavior
Disincentives to “Return to Work”
Most common employer mistakes
Finally:
Evidence-based medicine will create better Workers’ Comp claim outcomes.
In organized environments, executing successful return to work programs with Unions (and members) is essential.
As part of a comprehensive workers compensation program, employers should maintain close communications
with injured employees to ensure they recover quickly, do not drop out of the workforce and return to work rapidly. Get
Well Cards are part of a positive, proactive communication strategy.

4
The learning principles, approaches, and toolsets outlined herein apply to any state, jurisdiction, or county.
Who Benefits from Workers’ Compensation Cost Control? Everyone!!!
Claimants benefit as cost savings (from enhanced
efficiency, reduced fraud, enhanced processes) can go
to funding valid claims & costs.
Risk Managers and Safety Directors can train
supervisors in workers’ compensation claims
management. They learn more about their area of
responsibility – post-loss cost containment – adding
to their overall knowledge. Getting management
committed to rolling out a Return-to-Work program
can be one of the biggest cost savings areas relating to
workers’ compensation costs.
Brokers, Agents, Insurance Companies, Reinsurers,
Adjusters, and Consultants can learn about specific
aspects of cost containment; and benefit by passing
their knowledge on to their clients.
Producers and Account Executives can enhance
communications with prospects to include annual
stewardship meetings to illustrate how their company
is on top of workers’ compensation issues.
Vendors such as doctors, private investigators, law
firms, medical management vendors and triage
companies learn how their services can fit into the
workers’ compensation marketplace. They learn what
is important to employers, and what they look for in
medical provider relationships.
Human Resources find it useful in bringing new
hires including risk managers, safety professionals and
supervisors, up to speed very quickly.
© 2018 AMAXX Risk Solutions, Inc.

Chapter One
5

Chapter Two
6

Chapter Two
7
https://www.optimahealthcare.com/
Risk Retention Group’s (RRG’s)
A risk retention group (RRG) is an alternative risk transfer entity created by the federal Liability Risk Retention
Act (LRRA). RRGs must form as liability insurance companies under the laws of at least one state—its charter
state or domicile. The policyholders of the RRG are also its owners and membership must be limited to
organizations or persons engaged in similar businesses or activities, thus being exposed to the same types of
liability. Most RRGs are regulated as captive insurance companies. However, RRGs domiciled in states without
captive law are regulated as traditional insurance companies.
A risk retention group is a corporation or limited liability association formed under the laws of any state for the
primary purpose of assuming liability exposures on behalf of its members. Members of the group must be
engaged in similar activities or related with respect to liability exposures by virtue of any related or common
business exposure, trade, product, service, or premise. Members must have an ownership interest in the group
and only members may benefit from the group. Risk retention groups only apply to liability loss exposures.
RRGs provide their members with the following benefits:
 Program control
 Long-term rate stability
 Customized Loss control and risk management practices
 Dividends for good loss experience
 Access to reinsurance markets
 Stable source of liability coverage at affordable rates
 Multi-state operations

Chapter Two
8
Captive Insurance
Captive insurance is an alternative to self-insurance in which a parent group or groups create a licensed
insurance company to provide coverage for itself. The main purpose of doing so is to avoid using traditional
commercial insurance companies, which have volatile pricing and may not meet the specific needs of the
company. By creating their own insurance company, the parent company can reduce their costs, insure difficult
risks, have direct access to reinsurance markets, and increase cash flow.1 When a company creates a captive they
are indirectly able to evaluate the risks of subsidiaries, write policies, set premiums and ultimately either return
unused funds in the form of profits, or invest them for future claim payouts.2 Captive insurance companies
sometimes insure the risks of the group's customers. This is an alternative form of risk management that is
becoming a more practical and popular means[according to whom?] through which companies can protect
themselves financially while having more control over how they are insured.[citation needed]
There are many variations of how captives can be set up, which can be broken into two categories. The first
category is known as non-sponsored in which the company is the creator and beneficiary. Within that category
the most common are single-parent or “pure”, group and association. The second category is sponsored in
which the captive is owned and controlled by another company that allows other companies to “rent” insurance.
This category includes Protected Cell Captive Insurers and Rental Captives.3
1. "Protected or Segregated Cell Rental Captive Insurance Companies". www.captive.com. Retrieved 2016-10-28.
2. "How Does a Captive Differ From a Traditional Company".
3. "*|MC:SUBJECT|*". www.naic.org. Retrieved 2016-10-28.

Chapter Three
9

Chapter Four
10

Chapter Five
11

Chapter Six
12

Chapter Seven
13

Chapter Eight
14

Chapter Nine
15

Chapter Ten
16

Chapter Eleven
17

Chapter Twelve
18

Chapter Thirteen
19

Chapter Fourteen
20

Chapter Fifteen
21

Chapter Sixteen
22

Chapter Seventeen
23

Chapter Eighteen
24

Chapter Nineteen
25

26
https://hw359.infusionsoft.com/app/storeFront/showProductDetail?productId=76

19 Workers’ Comp Mistakes & Loopholes
27
How to avoid 19 Workers’ Comp mistakes & loopholes, driving three major points:
Drivers of human behavior
Disincentives to “Return to Work”
Most common employer mistakes

5 Critical Metrics
28
Following the step-by-step instructions in 19-step system for the calculation and application of 5 Critical
Metrics will address:
Workers’ comp viewed as a cost of doing business
Getting management to understand value of return to work
Convincing policy holders to embrace a worker recovery program
Lack of informed and effective employer involvement in WC claims issues
Stakeholder apathy
Managers and supervisors not taking seriously their duty to protect workers

How to Use Evidence-Based Medicine to Create Better
Workers’ Comp Claim Outcomes
29
A common fact often forgotten is workers’ compensation claims are medical injuries and medical expertise
is needed to get the best claim results. The workload of the everyday adjuster is unrealistic to expect accurate and
appropriate medical determinations. Key is how to leverage evidenced-based medicine guidelines to empower
claims handlers and drive positive claim outcomes. Specifically:
- Integrating evidence-based medicine tools into your claims process
- Avoiding excessive medical treatment and unregulated compound prescriptions
- Getting appropriate treatment approved
- Proper utilization of doctor questions to push for needed interventions
- Proper utilization of IME questions to move the claim toward resolution
- Inappropriate use of Utilization Review

Executing Successful Return to Work Programs with
Unions (and Members)
30

Get Well Cards
31
As part of a comprehensive workers compensation program, employers should maintain close
communications with injured employees to ensure they recover quickly, do not drop out of the workforce and
return to work rapidly. Get Well Cards are part of a positive, proactive communication strategy. These are
occupational injury get well cards for industrial or professional worksite settings.

Controlling Workers’ Compensation Costs by as Much as 20% - 50%

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Controlling Workers’ Compensation Costs by as Much as 20% - 50%

Similar to Controlling Workers’ Compensation Costs by as Much as 20% - 50% (20)

More from Richard Swartzbaugh

More from Richard Swartzbaugh (11)

Recently uploaded

Recently uploaded (20)

Controlling Workers’ Compensation Costs by as Much as 20% - 50%