How effectively are you managing safety?
If you want to keep your workers’ compensation costs down, you’ll need to be even more vigilant about loss control, according to the employer consulting firm Lynch Ryan Associates. In part, that’s because, under the NCCI’s new rating plan, employers’ primary losses – the most expensive costs in a claim – are doubling from the current cap of $5,000 to $10,000 in 2013, and going up to $15,000 by 2015.
The arcane mechanics of workers’ compensation insurance are best explained by specialists, but the basic message here is this: Employers who have higher than expected losses will also see their experience modification rates go up higher than under the current system. Possibly much higher. The experience modification rate (or “mod rate”) compares an establishment’s workers’ compensation claims experience to other employers of similar size operating in the same type of business. The mod reflects a company's safety record and affects its insurance premium. On the other hand, employers with lower than expected losses may see their experience mod rates drop lower than under the current rules.
How do average claims costs for the Oregon construction industry compare to the private sector? As the table below shows, costs were higher (in 2010) for the construction industry.
|Average temporary disability days and claim costs
Construction industry compared to private sector (2010)
|Claims resolved||Average temporary disability days||Average claim costs||Medical services||Indemnity||Temporary disability costs|
|Private sector total||15,856||81||$23,520||$10,770||$12,750||$5,950|
The best way to reduce primary losses is to prevent workplace injuries. The best way to prevent injuries is to have an effective safety and health program, which includes just seven elements:
Need more information about safety and health program management? Oregon OSHA offers these products and services: