Ensuring your employees are covered under workers’ compensation is a must for most companies. It’s estimated that employers pay almost $1 billion every single week for direct workers' compensation costs alone, according to the U.S. Department of Labor. Aside from ensuring proper employee classifications, adopting safety protocols and paying attention to other common factors that impact work comp premiums, some employers believe there’s not much more that can be done to lower costs.
But what if improving the overall health of your employee population both on the job and while away resulted in lower work comp premiums? The number of work comp claims you file isn’t just an indicator of how safe your work environment is; it’s a direct reflection of the overall well-being of your entire workforce.
If you want to improve your Experience Mod and lower both your work comp and healthcare premiums, you’ll want to include a wellness program as part of your strategy.
Approximately one-third of adults in the United States are considered obese, leading to higher incidences of diabetes, hypertension and physical inactivity. Obesity ranks as one of the top two chronic health conditions driving health-related costs for employers. One study showed that employees who struggle to maintain a healthy body mass index (BMI) of 25 or lower have nearly twice the risk of filing for short-term disability or filing a work comp claim.
Other research indicated that high BMI was associated with higher workers’ compensation costs for those with major injuries, averaging about $470,000 for obese workers and $270,000 for workers who were generally overweight, compared to $180,000 for those within the normal range. These same researchers indicated that more than 75 percent of claimants were overweight or obese.
Providing resources and driving wellness initiatives to help your employees manage their weight could be a major driving factor in lowering the number and severity of your workers’ compensation claims.
According to the Centers for Disease Control and Prevention (CDC), depression is among the leading causes of disease or injury worldwide. There has been research indicating that employees who are injured on the job have higher incidences of depression as a result. But the reverse is true as well. The CDC says that 43 percent of those who suffer from severe depressive symptoms also experience “serious difficulties in work, home and social activities.”
Depression rounds out the top two chronic health conditions driving healthcare costs for employers. Additionally, those who battle depression can experience more absenteeism and lower productivity, and may be at greater risk for substance abuse, smoking or mental health conditions.
An injured worker who experiences depression will likely experience a longer recovery time, driving workers’ compensation costs higher. This not only stresses the importance of staying engaged with recovering workers to keep a pulse on their needs, but also affirms the importance of developing an effective return-to-work program.
It’s well known that health issues among smokers are much higher than among non-smokers, leading to higher healthcare costs. Smokers have higher risks of fractures and sprains, lower back pain and arthritis. The loss of productivity among smokers who need to take breaks to feed their addiction is significant as well.
Because smokers are more susceptible to injury, they can drive up work comp claims, and their recovery time is typically longer as well. When it’s all added up, an employee who smokes can cost an employer almost $6,000 more per year than a non-smoker, according to an Ohio State University study. Including a smoking cessation program as part of a wellness program can have a significant impact on containing overall health and work comp costs.
Another predictive indicator of potential work comp claims is high levels of stress. Research indicates that there is a relationship between stress and work-related injuries and that it increases the odds of a claim being filed. It’s not just stress at work, but at home, too. Even the Occupational Safety and Health Administration (OSHA) has acknowledged the impact of stress on worker safety and has issued recommendations. As part of an effective wellness program, employers should consider developing a stress reduction program to mitigate the associated risks.
Clearly, wellness can do more than just keep healthcare premiums at bay. It can help a company mitigate its overall risk, including workers’ compensation costs. Good employers know that in order to protect their businesses, they need to protect their most valuable assets — their employees. An effective employee wellness program can be the impetus that helps employees take control of their health and well-being and improve life at home and at work.
Need help identifying potential risks and implementing a wellness program that brings results for your employees and your bottom line? Reach out to our team today and check out the client success story below to see how they were able to reduce their work comp premiums.