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 their employment, a claim is reported to the workers compensation insurance carrier. The carrier initiates lost wage payments to the employee once the claim becomes accepted until they are released to return to work.
At Metropolitan Risk we teach our clients that workers compensation insurance is essentially a very expensive credit line.
Contingent on the size of the claim, quite often our Claims Advocates espouse paying the lost wages for the injured worker. They pay this directly instead of through the workers compensation insurance. On claims under $50k, for every $1 the carrier pays, they can charge up to $1.70. They charge this 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. By making a small adjustment, you can save a small fortune over the long term.
We suggest paying the worker their full wages for the first day or two of the injury.
Your carrier will receive your claim once you submit it if they are not back to work. At this point you can begin to pay the employee at 66 ⅔ of the calculated average weekly wage. An option is paying 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. Please be sure to communicate all of your payments to the assigned claims adjuster and or your claims advocate. This will avoid any discrepancy and overpayment. Written confirmation from the adjuster will help you understand the plan. You do not want to double pay your work as that creates a messy situation. This runs counter to your main objective―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.
We suggest you draw a hard line somewhere that you are comfortable.
Next, a hearing will be requested, and the judge will order a reimbursement 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.
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