Work Comp Premiums-The Big Picture

Hi.  My name is Sharon Leonard and I have been working with Zeiler Insurance for over 10.  My focus is on employer processes and operations that will help control Workers Compensation Premiums and claim potential. 

CompVision is our comprehensive approach to managing workers compensation costs.  With the Work Comp Advisory Group we assist employers in the Illinois Workers Comp arena  to look at insurance cost control as more than a once or twice a year exercise.  Work Comp Rates are impacted by your approach to all aspects of your business.  Visit our web site and read on to learn more about how you can gain control and how Zeiler Insurance can help. 


Hiring to Reduce Work Comp Risk

We welcome the news that in February employers hired workers at the fastest pace in nine months. The jobless rate is at a nearly 2 year low of 8.9% and employment rose across almost all sectors including factory, construction and service jobs. This is a sign that the economic recovery is finally on its way. 

Finding new employees will be the trend for many employers. We want encourage them to focus on finding the right people for their open positions and to avoid the hiring mistakes that can lead to injuries, claims and increased workers compensation costs. The process that we would recommend is:

·         Resume/applicant screening

·         Interview

·         Background check

·         Conditional Offer of Employment

·         Post-offer pre-employment exam

When a candidate successfully completes the initial hiring process (screening, interview, background check) and is deemed to be a good fit for the position, the job offer is made. The offer should be made in the form of a Conditional Offer of Employment. Employment is conditioned upon the candidate being physically able to perform substantially all of the essential job duties of the position with reasonable accommodations for any mental or physical disability. The use of a Conditional Offer of Employment can help employers hire the best person for the job instead of hiring the next workers compensation claim!

Post-offer pre-employment exams allow medical professionals to screen a hire before they start the job and verify that they are able to perform the physical demands of the job for which they are hired. The timing of the exam and the manner in which it is performed is critical. 

An effective hiring process will include a relationship with an occupational clinic or other medical resource that can efficiently schedule and complete the exam so that there is minimal delay. The employee will have been supplied a medical questionnaire to complete before the exam so that the medical personnel will know any pertinent history. This is where prior injuries can be flushed out. 

The medical examiner will need a detailed job description in order to know the job requirements. (See blog on job descriptions.)  The exam should be tailored to the job for which the employee is hired.   The exam may also include an initial drug screen if the employer has a drug policy in place. Once the exam is complete, the medical professional will advise the employer as to the employee’s ability to perform the job and any accommodations that the employee may need. 

Following a clear and consistent hiring process that includes a post-offer pre-employment exam will help to reduce work comp claim potential and decrease work comp premiums in the long run. Follow the link below for guidance from the EEOC for employers on what questions can be asked and how exams can be performed.

Here’s to a healthier economy, a healthier workforce and contolling work comp premiums!


Illinois Workers Comp Benefits from Electronic Health Records

On June 3, 2010, Health and Human Services' Secretary Kathleen Sebelius announced funding for three Illinois entities to expand the use of health information technology. The funds are part of the $2 billion allotted to HHS’ Health Resources and Services Administration (HRSA) under the American Recovery and Reinvestment Act of 2009.  Illinois entities have received a total of $14,222,596 in funds through HRSA grants since last year.

In February, Governor Quinn signed Executive Order 2010-1 creating the Office of Health Information Technology that launched the development of a statewide Health Information Exchange.  For the full press release:

The use of health information technology allows health care providers to more easily share and access a patients health information. Through the use of shared information the hope is that we will see:

  • Improve health care quality and outcomes
  • Improve patient safety
  • Reduce health disparities
  • Reduce medical errors and duplicative services
  • Enhance coordination of patient care among providers
  • Reduce or eliminate paper
  • Control the cost of health care
  • Enhance public health and disease surveillance
  • Promote greater efficiency

From the perspective of an employer, the possible result of shared health information technology is all positive. Enabling a treating provider the opportunity to see if an injury is pre-existing is obvious, but access to the history and objective diagnostics that have been performed in the past is key. The reduction in duplicative diagnostics and the efficient delivery of all records should result in savings for all. 

In the effort to reduce Illinois workers comp rates, the benefits of the expansion of Health Information Technology are promising.  


Supervisor’s Role in Managing Work Comp Rates (part 2)

We know that supervisor’s role on the floor or jobsite is critical to maintaining a safe place to work and limiting unsafe behavior but their role after an injury occurs is also critical.


Getting the proper care after the accident is, of course, the main concern. Calling an ambulance or escorting the employee to your predetermined occupational health expert immediately after an injury is the first step.   Early involvement with your occupational health professional can directly impact the duration of the treatment, overall medical cost and length of lost time. 


Reporting the incident is also critical so that the employer’s work comp coordinator can make sure the insurance carrier is on notice and, again, that the employer’s occupational health clinic is involved.  Timely reporting will also allow for a proper investigation of the circumstances surrounding the claim. Tracking the time to report a claim to management is a recommended benchmark for every supervisor. 


An influential factor in the post-injury outcome is the health of the relationship between the employee and supervisor before the accident. According to a DuPont study, an employee’s perception of the employer and management is directly related to the outcome of a work comp claim. Employee satisfaction surveys are one way to measure employee fulfillment.


The communication between the supervisor and employee after the injury is important. The employee must know the employer is concerned about their well-being and is anxious to have them back. After the accident, keeping in touch with the injured employee will keep work “alive” in the employee’s mind. The employee’s importance and the supervisors/employer’s genuine care and concern for the employee will be voiced. All too often supervisors don’t know what to say or are afraid to contact an injured employee. With some communication the employee can be put as ease and the supervisor can let them know how much they are missed. 


If an employee returns to work on a light duty basis, the quality of the relationship will again be important.  Accommodating the employee’s limitations and finding a valued role for the employee to fill while recuperating is essential. 


Supervisors need training so that they know the step by step process of post-injury behavior. Written guidelines can give supervisors a go-to guide in the case of an accident. Role playing and education can help to reinforce the action that needs to be taken. Engaging supervisors on how their role has a direct impact on limiting work comp costs and maintaining profitability is essential.  


Supervisor's Role in Controlling Work Comp Rates (part 1)

Managing to control Employer Workers Compensation costs is traditionally approached with a focus on preventing accidents and injuries from occurring. Loss control and safety managers are busily working to make factories and worksites safe and OSHA compliant. 


Surprisingly, 90% of injuries are caused by unsafe behavior, not unsafe conditions. The foremost cause of lost time injuries is overexertion. Ironically, OSHA compliance standards do not address this issue. 


Supervisors are the critical link between unsafe behavior and a productive, healthy workforce.  Making sure the safety goggles are on, the helmet is worn or breaks are taken at the proper times is their critical responsibility. Sometimes though, incentives for production can run contrary to safety standards. Supervisors might be motivated to ignore rules put in place to protect workers. 


Having supervisors actively engaged in both production and safety is a key component to controlling work comp premiums. A great way to engage them is to illustrate the premium impact a lost time work comp claim will have over a 3 year period. If you then translate that cost increase to the amount of product that has to be produced, sold and the amount of profit that has to be made just to recoup the additional expense, you will get their attention. They then can understand the very real cost of unsafe behavior!


Lowering Your Workers Compensation Costs - Post Injury Process

Knowing what to do when you have an injured employee is the key first step to managing your workers compensation costs and returning that employee to work.  Employers must have a clearly defined process in place and all employees, not just supervisors and managers, should be trained on proper post-injury management. 

It seems quite simple but the failure to have a post-injury process in place or employees who don't know what to do, can have a dramatic impact on the outcome of that workers comp claim. 

An effective process will start with an emphasis on reporting the claim immediately to the workers compensation insurer.  This is key because the experienced claims handler can immediately acclimate the injured employee with the claim process. They can explain the work comp laws, how bills for services will be handled and if lost income is an issue, when payments will be made.  This will usually put the employee at ease and reassure them that they are being treated fairly.  Putting them at ease can also help reduce the likelihood of an attorney's involvement in the claim.  This can significantly help in reducing the overall claim cost.

Having a process in place will also help to reduce the anxiety co-workers might feel when there is an injury. Knowing what to do to aid an employee will allow co-workers to respond immediately and contribute to the care of the injured employee.

The goal of this process is to allow the injured employee to return to work as quickly as possible, reduce the impact of that claim on your workers compensation experience mod and overall work comp rates.  Have you checked you post-injury process yet? 

Control Work Comp Premiums Through Quality Hires

Employers who are concerned with controlling their work comp premiums sometimes will focus on them at renewal time or when they have received their insurance premium audit.  The reality is that the management of your premium begins when you hire someone. 

The key is to know what skills are needed for the job and to have a process in place to make the right hire.  Employers in the Chicago area are fortunate to have a large pool of potential employees to choose from but many times when discussing their hiring process, employers express frustration with locating the right person.  

Today, most position are filled by using online career sites., and in the Chicago area are all excellent resources for employers to use to find the right person.  These sites are no longer just for the large employer. 

We also encourage employers to look within their companies for the right hire.  If you do not have a process in place for posting jobs both internally and externally, it is time to put one together.  There are advantages to hiring from within which include keeping quality employees from looking elsewhere for greater challenges as well as increasing productivity and commitment.

Finally, an effective, well thought-out, employee referral program can be a gold mine for employers.  Employees will "prescreen" their referrals as most will see their referral as a reflection of themselves, providing a higher quality candidate pool for consideration. (For great referral program suggestions see:

Your work comp insurance premiums can be managed and that process starts with hiring the right person!

Hire Right with Job Descriptions

As we have talked about, an effective first step in controlling your Workers Compensation premium is hiring the right people. But what are you hiring them to do? Most employers think that when they lose “Joe” they are looking for his replacement. Employers who have a hiring process in place focus on replacing the vacant position. That position is defined by the job description. 

Having accurate and effective job descriptions in place will ensure that you are focusing on the requirements of the job and not the personality of a candidate or what the departing employee brought to the position. Job descriptions are also required to help you comply with the Americans with Disabilities Act and other laws. 

You should be able to define the most important functions of a job, the physical or technical requirements, and pre-requisites and incorporate them into the description. Jobs requiring physical stamina or strength should have those requirements measured with metrics that include time, weight and frequency measures. 

 As an agency providing Chicago workers comp insurance, we have coached numerous companies with regards to their hiring process. We find that for many, the job description piece seems to be the most daunting. There is help; on line resources abound! The Bureau of Labor Statistics ( has outlined many jobs and duties and will give employers a good start. Microsoft Office On line has several templates available. 

 For some positions, a Functional Capacity Evaluation might be required. This is an assessment tool performed by a physical therapist to determine the physical demands of a specific job.  It can be used to screen employees in conjunction with a post-offer exam. Importantly, if a FCE is in place before a work related injury, a doctor or therapist can evaluate an injured employee’s ability to return to work when given these very specific, measured job requirements. This can help get a worker back to work when they are able and ultimately have an impact on your Workers Compensation Experience Modification. It can also be used to determine if a reasonable accommodation can be made pursuant to the ADA.

Getting job descriptions in order is a good start to developing a hiring process that will lead to the best hires and lowering your potential for work comp claims!


Hiring Process

The management of your Work Comp Premium begins with the person you are interviewing for that open position! Employer workers compensation risk management and hiring are closely tied together.  Many times employers are motivated by the need to fill a seat and there is little consideration of whether the person hired is able to do the job.  If you have ever found yourself wishing you had not hired a particular person, you know what I mean. 

When employers focus on the hiring process before they have an open position, they are equipped to make the right hire.  Without a process in place, employers are more likely to make a hiring decision based on emotion or simple short term need.  Unfortunately, this approach can have a long term impact on your work comp premiums.  Remember your workers compensation experience modification is impacted by claims for 3 years! 

A good hire not only impacts your productivity and potentially your workers compensation premium but also your other employees.  You probably have experienced the impact of a highly motivated and qualified employee being added to your staff.  That person has the ability to raise the bar for all other employees.  You may have also had the opposite. When you hire an unmotivated or unfit employee, other employees must share a greater burden of work and may become less driven towards your goals as an employer. 

To get started on developing your own hiring process, you might want to take a look at the
steps suggested by  This is a simplified process but for those who need a starting point, this will help.

When considering the time and cost of making a good hire, the impact on your work comp premium will make your investment in the hiring process worth the effort!