Did you know, depending on your company structure, you can pay your employees their regular wages in lieu of workers compensation? If an employee is accidentally injured during the course and scope of their employment, a claim is reported to the workers compensation insurance carrier. Once the claim becomes accepted, the carrier commences lost wage payments to the employee, until they are released to return to work.
Contingent on the size of the claim quite often our Claims Advocates espouse paying the lost wages for the injured worker directly instead of through the workers compensation insurance. At Metropolitan Risk we teach our clients that workers compensation insurance is essentially a very expensive credit line. On claims under $50k for every $1 the carrier pays, they can charge up to $1.70 through an experience modification factor surcharge over a 3 year period from date of loss. That’s like taking a loan from the bank at a 70% interest rate. Making a small adjustment like this can save you a small fortune over the long term.
We suggest paying the worker their full wages for the first day or two of the injury. If they are not back to work the claim is submitted to your carrier. At this point you can begin to pay the employee at 66 ⅔ of the calculated average weekly wage or you can pay their regular wage. We don’t recommend paying their regular wage as we want to create an incentive for them to come back to work and not sit home. Please be sure to communicate all of your payments to the assigned claims adjuster and or your claims advocate, to avoid any discrepancy and overpayment. Get written confirmation from the adjuster they understand the plan. You do not want to double pay your work as that creates a messy situation and runs counter to your main objective which is to get that injured worker back to work at full duty if not alternative duty. You’ll want to forward copies of the pay-stubs to the adjuster as well.
The employer may seek reimbursement for those wage payments from their workers compensation carrier if the injury or claim goes sideways and you want to stop paying the claim out of your current operating cash flow and hand it over to the insurance carrier. We suggest you draw a hard line somewhere that you are comfortable. If you decide that you want reimbursement from the carrier, you contact the adjuster and request a reimbursement form. Thereafter, a hearing will be requested, and the judge will make the order to reimburse the employer.
Saving money on your workers compensation insurance is not a product of one large silver bullet but small incremental improvements like tracking near misses and not claims, getting employees to report injuries ASAP , even minor ones, and lastly managing every aspect of the workers compensation claim until you action plan and get that injured worker back on the job. This does not happen by accident. It’s a function of a well thought out, strategically run plan like our COMP CARE platform that is turn key for employers looking to gain a competitive edge on their competition by having a substantially lower risk costs like insurance. For more information on COMP CARE, please CLICK HERE.