Prioritizing Health to Reduce Workers’ Compensation Expenses

Employers pay almost $1 billion every single week for direct workers’ compensation costs, according to the U.S. Department of Labor. There are many ways to lower the amount of workers’ compensation costs and claims. Employers can establish a safety program, pay attention to common industry risks and adopt protocols compliant with Occupational Safety and Health Administration (OSHA) standards. However, the premium costs and the number of claims aren’t just an indicator of how safe your work environment is – they’re a reflection of the overall wellbeing of your employee population.

OSHA recommends approaching safety and wellness together, as wellness plays a surprisingly big factor in workers’ compensation claims. In fact, a project conducted by the University of Michigan Health Management Research Center revealed that employees with high health risks tended to have the highest workers’ compensation costs.

Implementing an effective program that puts equal emphasis on both safety and wellness can improve your Experience Mod, which could ultimately reduce workers’ comp claims and premium costs. Wondering where to start? Here are the areas you should analyze.

Physical Health Matters – Particularly Weight Management and Smoking

A 2010 study by the National Council on Compensation Insurance revealed that obese workers (as defined by mass body index) were more likely to experience injuries that resulted in higher disability payments and a greater likelihood of permanent disability. Obese claimants incurred medical costs 6.8 times higher than non-obese and were twice as likely to file a claim. And the days of work that weight-challenged claimants missed were 13 times higher than similar claims from non-obese workers.

Unsurprisingly, smoking also plays a factor in workers’ compensation claims. Smokers have higher risks of fractures and sprains, lower back pain and arthritis. According to an Ohio State University study, an employee who smokes can cost an employer nearly $6,000 more a year than a non-smoker. Additionally, smokers’ productivity tends to be lower than non-smokers’ because of all the breaks they take to feed their addiction.

To lower workplace injuries and costs of premiums, employers should address obesity and smoking in their company-wide wellness programs. Generally, wellness programs increase employee motivation, productivity, and job satisfaction, resulting in less turnover. Employees retained longer have fewer workplace accidents due to having more job experience and practice – and higher retention often leads to lower workers’ compensation claims. Wellness programs typically offer incentives for employees for meeting the thresholds of a healthy waist circumference (or showing improvement within a year) and for completing a nicotine cessation course.

Don’t Disregard Mental Health in Your Wellness Program

When evaluating workplace accidents, mental health is just as important as physical. Mental health conditions are some of the most expensive health challenges in the United States, following cancer and heart disease. They are the leading cause of disabilities in high-income countries, accounting for one-third of new disability claims in western countries – and these claims continue to increase by 10 percent every year.

Several conditions fall under the mental health scope, including anxiety, stress and depression. Coping with these conditions could potentially lead to weight gain, smoking, heart disease and more, which could ultimately result in additional workplace injuries, as mentioned above. In fact, research has indicated that there is a connection between stress and work-related injuries, increasing the odds of a workers’ compensation claim being filed.

It is beneficial for companies to incorporate mental health in their wellness plans, offering rewards for completing meditation videos, online stress management courses and other related activities. But employers should also re-evaluate their workplace culture and enforce change to ultimately result in a lower stress environment. Companies should provide the proper resources and support that allow employees to do their jobs and feel valued while allowing them to feel a sense of control, empowerment and belonging. Leadership should be trained on how to address employee burnout and help their teams balance their workloads.

In the event of workplace injuries, some companies are addressing psychosocial conditions head-on by establishing programs that identify and intervene with the injured workers who are at risk of mental health issues. This allows the injured employees to solely focus on recovery and skill acquisition and return to work feeling productive and energized.

Take Action to Lower Your Workers’ Compensation Costs

Now is the time to re-evaluate your workplace safety plan to ensure it addresses physical and mental health. If you don’t have a wellness program established, take the steps to form one. Need assistance getting started? Set up a consultation with our Wellness Team and/or Chris Pfeiffer, Team Manager of Horton Safety Consultants. They can help you analyze your biggest risks and develop plans to improve your Experience Mod scores, decrease the number of claims and lower your premium costs.