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Between millions of people becoming insured and the prevalence of higher deductible plans thanks to the Affordable Care Act (ACA), there is concern in the business world that the ACA will have a negative impact on workers’ compensation – and that maybe it already has.

Employers should not have to pay higher costs in their workers’ comp policies because employees delay returning to work or file fraudulent claims. Understanding the impact of the ACA and what to watch out for will help you control your workers’ comp coverage.

Delayed Return to Work

In the short time that the ACA has been in effect, more than 16 million previously uninsured people have joined the ranks of the insured, leaving many to wonder if there would be a shortage of access to care. In the world of workers’ compensation insurance, many wondered if this would increase the amount of time it would take for employees to receive treatment, keeping them out of work longer, and increasing the costs of workers’ compensation insurance premiums.

In an access to care study conducted by the National Council on Compensation, the biggest driver of a delay in the time of treatment is not the number of medical providers available, it is the behavior of the injured worker – delays in reporting injuries or filing claims resulting in a delayed return to work. Employees may be better served with a greater understanding of the workers’ compensation process to prevent this delay from occurring.

High Deductible Plans

Many newly insured people have found that higher deductible plans lead to lower monthly premiums. In an effort to save a little money, they take this route, quickly finding that they cannot afford to see a doctor when they become injured. As a result, workers’ compensation fraud has been on the rise.

Workers’ compensation fraud is hardly a new phenomena. Before the ACA, it was seen mostly from the uninsured. Now the claimants have insurance but they still can’t afford to go to the doctor. To prevent fraud, it’s now more important to know the cause of injury more than any other factor. Making matters worse, a physician may take an employee’s explanation at face value without asking deeper questions, because reimbursements for workers’ comp claims have higher payouts than reimbursements under traditional insurance.

How to Prevent Fraudulent Claims

Unfortunately, the burden of preventing fraudulent workers’ comp claims is going to lie with you as the employer, but with a few tips, you may be able to weed out the fakers from those truly injured on the job.

Be aware of typical red flags:

  • Soft tissue injuries to the back, neck, or other parts of the body that aren’t easily visible
  • Accidents that occur at the beginning of the work week when the employee was working alone
  • Employees with prior bad behavior or work-related incidents


Once an accident is reported, have a step-by-step system in process to document the claim:

  • Have the employee put their account of what happened in writing
  • Have a supervisor walk through the area where the accident was said to occur, taking pictures, and walking through the details given by the employee in their written statement, noting anything the find that doesn’t match with the statement given.
  • Talk to other employees to find out if the claimant mentioned any injuries or pain earlier in the day
  • Consider the prior behavior of the employee. If this is a problem employee who is prone to breaking the rules, bending the truth, or causing problems, this is a definite red flag.
  • Document the use (or lack thereof) of any safety equipment
  • Check video surveillance – if available
  • Check social media accounts – if this employee was involved in any activities that could cause injury over the weekend and posted it to their social media, this should be noted.
  • Ask the employee to repeat their story. Details tend to change when the story is false. Compare this account to the original one and what the physician reports.


If you detect fraud, contact your workers’ compensation insurance agent immediately.

Not every employee who makes a claim is lying to you, but it’s important to note the impact the ACA is having on workers’ compensation claims and how to protect yourself from fraudulent claims.

If you’ve got questions about fraudulent claims or your workers’ compensation policy, contact us today.

calculating the cost of self-insurance

For larger companies in most states across the country, workers’ compensation comes with two choices: traditional insurance or self-insurance. Knowing which to choose can be difficult and you should consider much more than the bottom line cost difference between the two when deciding what to do.

If your company meets the requirements, self-insuring may allow you to reduce costs while providing protection for you, your business, and your employees.

What is Self-Insurance?

When a company self-insures as an alternative to traditional workers’ compensation insurance, they are not relieved of the legal responsibilities of paying medical expenses and lost wages for their employees who become injured or ill while on the job. Instead of paying premiums to an insurance company who handles the claims process, the company uses funds set aside specifically for workers’ compensation claims, while overseeing the claims process internally.

There are some very clear advantages to self-insurance:

  • Reduced costs
  • Fewer claims due to more incentive to prevent accidents and reduce claims
  • Investment income may be generated on the funds set aside for claims
  • Better cash flow because medical bills and benefits are paid only when needed


Things to Consider Before Self-Insuring

Regardless of the advantages, you must also carefully consider the reality of self-insuring. You have fiscal, legal, and business responsibilities that must be met in order to comply with your state’s requirements for workers’ compensation benefits.

More administrative responsibilities will include maintaining loss records, filing reports with your state authorities and agencies, working with service providers, and more. Many employers outsource these tasks to third party administrators. You are still responsible for making sure you are compliant, even if another company handles the paperwork on your behalf.

Legal requirements for your state must be met, including posting a letter of credit or a surety bond to cover your company’s financial obligation. If you operate in multiple states, you will need to be aware of each state’s requirements.

Your tax considerations will change slightly. Instead of deducting the amount paid on your insurance premiums, you will need to wait until you’ve paid losses and expenses on claims before receiving a credit on your taxes.

Self-insurance is a long-term commitment. While it’s fairly easy to put a self insurance program together, it can be expensive to move back and forth between self insurance and traditional insurance programs. Give your program time to see the benefits. The programs you put in place to reduce claims or deal more efficiently with accidents may not yield obvious improvements at first.

How to Self-Insure

Becoming self-insured is a four-step process.

  1. Initial Review: Does your state allow self-insurance? What is your company’s loss rate for claims? How much are you paying for workers’ compensation insurance through traditional means? If your state doesn’t allow insurance, you typically have more claims than you pay in premiums, or your premiums are less than $750,000 a year, you may not be a good candidate for self insurance.
  2. Feasibility Study: Data collections of payroll, large loss details, number of employees; actuarial analysis for estimated costs in the year ahead; financial analysis of all associated costs; administration and operational considerations; state requirements; and verbal and written management approval.
  3. Implementation of the program: consent of regulatory bodies; claims handling process; safety and loss control program; application and approval to state authorities; escrow funds; and more.
  4. Monitoring the program: claims; safety; risk management; brokerage activities.


You may want to consider excess insurance or stop-loss insurance policies to protect yourself against large losses if you self insure. Pre-occurrence policies protect you against large, single catastrophic claims with reimbursements between $50,000 and $2 million, depending on your deductible. Aggregate policies protects against higher than anticipated claim activity; once the total claims paid exceeds a specific threshold, you’ll be reimbursed for the overage.

Self-insurance isn’t for every business, but if you’re large enough, without excessive workers comp claims, and a willingness to oversee the necessary administrative and legal requirements, it could be a smart business decision for your company.

employee wellness program

Healthier employees are happier and more productive, have higher morale, and experience fewer accidents on the job than those who are unhealthy. Who wouldn’t want to be surrounded by happy, healthy employees?

Businesses who create employee wellness programs can experience all of the benefits that healthier employees offer.

What is an Employee Wellness Program?

Employee Wellness Programs (EWPs) are clearly defined and organized policies and activities put together by employers to promote better health and well-being for your employees. The goal is to give employees information about their health they may not have and enable them to make good choices to increase their own health and safety.

The best kind of EWP equips both the employee and the employer with good information on employee’s individual lifestyle risks. This is done as a three-step process.

  • Health Risk Assessments are questionnaires given to employees to determine their individual health risks.
  • Biometric testing is done to check blood pressure, glucose, cholesterol, and BMI. This helps identify employees with diabetes, hypertension, and obesity.
  • Behavior modifications offered based on identified health risks: health coaching, weight management, nutrition and diet information, fitness, and smoking cessation.

Once the tests are done and assessments are complete, you’ll be able to see who of your employees are high, medium, or low risk and can begin to find ways to encourage EWP participation.

Unhealthy Employees Cost More

You cannot discriminate against employees with poor health, but you can encourage participation in your employee wellness program to help them become healthier. The differences between an unhealthy employee and a healthy one are staggering.

Employees at a high risk for depression cost 70% more than low risk employees while those at high risk of stress cost 46% more. These employees have lower response times, loss of focus at work, tight and tense muscles which can be more easily injured, and may exhibit risky behavior. All of which is a costly accident waiting to happen.

Obesity is a common issue, with as much as 35% of the workforce considered obese. These employees rack up seven times the medical costs, have a recovery time 13 times longer than the non-obese employee, and 11 times the indemnity costs. In concrete numbers, the average obese employee’s workers comp costs are $51,000, while the non-obese costs are $7,500.

Employee Wellness Programs Reduce Workers’ compensation Costs

Obesity, smoking, poor fitness and nutrition, and depression and stress are common among unhealthy employees. These health issues result in more accidents and injuries while at work. Healthier employees, especially those participating in an EWP, have fewer accidents, shorter recovery periods, and lower workers’ compensation claims.

Through multiple studies, the benefits of EWPs have become clear with a 32 percent reduction in workers’ compensation costs. This includes fewer out-of-work days and accidents.

Sometimes people don’t know they’re unhealthy. More often, they know they are but don’t know what to do about it. An effective employee wellness program can help them identify the problems and get their health back. This isn’t just about reducing workers’ compensation costs, this is about improving the lives of people who work hard for your business every day.

Happy, healthy employees are a smart business investment.


Knowing when your employees are covered by your workers’ compensation insurance policy and when they are not should be pretty simple. When they’re on the job or doing something within the scope of their employment, benefits apply. Employees who aren’t on the clock shouldn’t receive benefits if they’re injured.

What sounds simple really isn’t. There are plenty of exceptions to the “off the clock” rule, and if your employee is injured even when they’re not clocked in and on the job, you could still be liable.

When Workers’ compensation Benefits Apply

Most states follow a simple rule for applying workers’ comp benefits that says “while in the course of employment,” if an employee is injured, their medical costs and lost wages will be covered. This rule means that, regardless of the physical location or the time of day, if an employee is performing an assigned job duty, their injury is covered under your workers’ compensation insurance policy.

What is excluded from this rule is any travel between work and home, before the start of and at the end of the workday. It’s known as the “going and coming” rule or the “portal to portal” rule. It’s during this time that most of the exceptions to workers’ compensation “off the clock” rules occur.

Workers’ Comp Exceptions While “Off the Clock”

When the employer benefits: Employees are covered while they are commuting to and from work while they are required to be away from their primary workplace or home in order to perform their assigned work duties, directly benefiting their employer. Example: Employees who are traveling for work and commuting to and from a hotel.

When the employer requests a special mission: While an employee is driving home from work or to work from home, they stop to drop off paperwork or pick up a much needed supply at the request of their employer, taking them off of their normal route to work and creating a “special mission.” If they are injured during that time, workers’ comp benefits apply. Example: Before coming to work, an employee picks up a report from the company accountant at the request of the manager.

Areas controlled by the employer outside of the workplace: In this scenario, the most common areas affected by this exclusion are sidewalks and parking lots. Any area controlled by an employer that an employee must use to get to or leave the workplace is considered an extension of the workplace. “Controlled” in this sense means the employer owns the area, pays a mortgage for it, pays taxes on it, pays a third party to maintain it, or has designated it a common area for employees to use. Example: An employee is struck in the parking lot designated for employees while leaving for the day.

Outside of regular business hours: This is a little less common, but when employment duties fall outside of regular business hours or the normal work hours of an employee, their injuries and accidents are covered by your workers’ compensation insurance policy. Example: Employees who work on-call after hours.

After-hours visits: This exclusion is a sticky situation for employers. If an employee visits the office or business location when they’re not scheduled to work, any injury they incur shouldn’t be covered under your workers’ comp policy unless the employer was aware the employee came in on their off-time and consented to their presence. Example: Employee visits fellow employee on their day off and waits in the building for the lunch hour to begin.

Not all of these situations can be avoided, but it helps to be aware of when an employee is covered by your workers’ comp policy in the event of an accident. It can help you make decisions about when to request a special trip for the office to pick up supplies or when to tell an off the clock employee it’s time to stop hanging out and go home.

If you’ve got questions about workers’ compensation or if you’d like a free quote for a new policy, contact us today.

increased experience mod

In reviewing your most recent workers’ compensation paperwork, you notice something out of place. Your experience mod went up – again. This means higher premiums and more money you have to spend.

There are a number of things that can lead to an increased ex mod. Take a look at few common reasons you should know about so you can understand exactly what you’re being charged for and why.

Split Point Increase

The split point of the losses from your workers’ comp claims increased in 2013, 2014, and 2015, most recently to $15,000 with a two year inflation adjustment. This is the first increase in 20 years while the average cost of claims have tripled in the same time frame. Claims that cost more than the split point have a greater impact on your experience mod. At the same time, employers with few or no claims greater than the split point may even see a reduction.

Expected Loss Changes

Expected losses are calculated by the total amount of your payroll, divided by 100, and multiplied by the expected loss rate for each job classification. The expected loss for your company can be affected by an increase in payroll, an increase in the expected loss rate, or a change or addition in job classifications for your business.

Payroll Changes

As mentioned before, payroll increases can affect your expected loss which can cause an increase in your ex mod. Look at why payroll increased and if your workers’ comp claims increased at the same time. Did you need to hire more people to keep up with demand and an improving economy? Wonderful! But were the best people hired and were they well-trained in safety protocols for your company? New employees mean higher payroll, but it can also mean an increase in risk and workers’ comp claims.

Overall Losses

If you’re confused about how you had an increase of your ex mod when you’ve lowered your claims for the past couple of years, it helps to understand how ex mods and workers’ comp premiums are calculated. When determining your ex mod (and premium total), three years of losses are used. If your safety program is relatively new, and you lowered your number of claims or the total losses of each claim, that’s great, but it may not make up for losses you experienced the two years prior to that.

It can be frustrating to see your workers’ comp costs go up, especially when you know you’re doing everything in your power to reduce claims. When you see the numbers go up, consider these common reasons to understand what happened and if there’s anything you can adjust to keep you workers’ comp premiums as low as possible.

If you’d like to find a way to save on your workers’ comp insurance premiums contact us, today.

Get A Quote Today!

Your Name *

Your Company *

Your Email *

Phone #

State *

# of Employees *

Do you have workers compensation
insurance currently? *
 Yes No