Category Archives: Work Comp

Supplemental Accident & Disability Insurance Take a Bite Out of Your Workers’ Comp Costs

Supplemental Accident & Disability Insurance Take a Bite Out of Your Workers’ Comp Costs                  

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No matter your business, keeping your workers’ compensation costs down is a major concern. And developing the most cost-effective methods for tamping down those costs can be challenging. Add to that determining the actual financial impact to your business from loss of productivity and increased absenteeism as a result of work comp claims.

Most employers understand that lowering the incidence of workers’ comp claims leads to better rates because of a lower experience mod. Historically, companies have achieved this by implementing better safety protocols and improving worksite conditions. But now, the 2014 Workers’ Compensation Report suggests that lower work comp rates may actually be achieved by adding voluntary benefits into the mix.

As we mentioned in the previous blog post on voluntary benefits, employers who have included voluntary accident and disability insurance in their overall benefits offering have realized as much as a 50% reduction in work comp claims.[1]

Accident & Disability Insurance Account for Reduction in Work Comp Claims

Earlier this year,  a Workers’ Compensation Survey of 600 companies to determine whether there was a direct correlation between providing employees voluntary accident and disability insurance and a decline in work comp claims. The survey revealed that 55% of companies who provided employees with the option to enroll in accident or disability insurance actually experienced a decrease in work comp claims. And 34% of small to medium companies also reported a decrease.

Voluntary accident coverage. The survey also measured the direct effect of voluntary accident insurance on workers’ comp claims. Results revealed that when employers included these insurance products in their benefits offering, the following occurs:

 

Employers 50% Reduction in Claims 25-49% Reduction in Claims
All 600 Employers 15% 17%
Large Companies 12% 29%
Medium Companies 13% 14%
Small Companies 15% 9%

 

Voluntary disability coverage.  The results for those companies offering voluntary disability insurance were nearly the same, with 47% of large employers, 43% of small, and 33% of medium-sized companies reporting a decrease in work comp claims. Asked whether they could directly link the offering of voluntary disability insurance to a decline in work comp claims, respondents reported the following:

 

Employers 50% Reduction in Claims 25-49% Reduction in Claims
All 600 Employers 14% 15%
Large Companies 11% 20%
Medium Companies 18% 7%
Small Companies 18% 17%

Reduction in Costs, Claims and Employee Productivity

The information above reveals that employers can, in fact, reduce the frequency and cost of work comp claims by simply making voluntary accident and disability insurance available to their employees AND carefully explaining during enrollment time the purpose and usefulness of these supplemental coverages. With a reduction in claims comes a lower experience mod resulting in lower work comp insurance rates. In addition, employees who avail themselves of these voluntary insurance products gain financial peace of mind and are better able to avail themselves of the care they need. In the end, employers experience greater productivity and a reduction in absenteeism.

Providing these voluntary products is easy. They can be offered as an option with your larger benefits package at little or no cost. Employees pay the premiums through payroll deductions on a pre-tax basis.

Learn how voluntary accident and disability insurance can help you proactively gain control of your workers’ compensation costs.

[1] Employee Benefit News, “Survey Finds Majority of Employees Want Customizable Benefits,” Tristan Lejeune, Mar. 1, 2013

Source: Supplemental Accident & Disability Insurance Take a Bite Out of Your Workers’ Comp Costs