Vigilant Helps Save Employer $67K by Crunching the Numbers
One of the surprising ways employers can save on a workers’ comp claim is to just go ahead and keep an injured worker on full salary (KOS) instead of depending on L&I to supplement wages. Washington, unlike most states, allows employers to pay wages while injured workers are unable to work. This is a key component of any company’s strategy to mitigate the impact of a current claim on future premium as small time loss claims have an outsized impact on the experience modification factor (EMF).
RECENT KOS STRATEGY WIN
In a recent case, a Washington wood products manufacturer saved almost $67K by doing just that. It doesn’t work all the time, but Vigilant’s access to powerful data and analytics services allow us to run the numbers on a case-by-case basis to determine if the strategy can save premium in the long run.
How the Employer Saved $67,000
In this case, the injured worker had already received time loss benefits after a workplace accident. The claim costs had reached $10,500, including $6,900 for two months of time loss pay from L&I. Not only is that reduced pay for the employee, but every dollar L&I pays out comes with a premium penalty to the employer and a reduced experience rating. The penalty varies by claim type, premium size, claim history, and other factors, and it impacts the employer’s EMF and associated premium for three years. The three-year premium penalty for the wood products manufacturer amounted to over $80,000.
The employer ended up saving money by making a one-time wage payment for $13,962, the amount the employee would have received if they had been kept on salary for the previous two months. The employee then received full salary from the employer and the employer avoided the steep raise in EMF and subsequently, premium amounts. That’s a savings of nearly $67,000!
You Need to Act Quickly
The availability of retroactive KOS strategies like the one described above is limited by L&I to usually just a couple of months so it is important to have a discussion with your claims manager as soon as a time loss claim happens. A KOS strategy, whether proactive or retroactive, may not always make sense and it's important to understand the impact of the strategy on a claim-by-claim basis.
We Analyze Claims Right Away
Vigilant is always on the lookout for ways to help our Retro Group members. We scrutinize each claim, employer by employer, to determine any and every way cost can be reduced; there’s never any rubber stamping, and we don’t lump claims into categories.
Contact us today to learn about our retro program and how we help Washington manufacturing employers with KOS and other critical strategies to lower your workers' comp costs.
This website presents general information in nontechnical language. This information is not legal advice. Before applying this information to a specific management decision, consult Vigilant or legal counsel.