Workers’ compensation insurance is crucial no matter the size of your company. In most states, it’s legally required as soon as you hire your first employee. Not only does it help protect your employees in the event of an accident at work, but it also helps protect you and your company financially. Without workers’ comp coverage, you could be expected to pay out of pocket for expenses like medical bills, rehabilitation costs, or lost wages.
Traditional workers’ compensation can make sense for larger corporations, but small businesses may experience a huge financial impacts. Let’s look at the financial impact of workers’ comp on small businesses as well as cost-management strategies that can be put in place to manage financial risks.
Analyzing the Financial Impact of Workers’ Comp
As essential as workers’ compensation is for companies of all sizes, it’s important to look at the financial impact it can have on small businesses.
Workers’ comp often requires large lump sums up front to cover the premium cost for all employees. This may work for large companies that have the capital to cover those costs. Small businesses, however, may not have the funds to pay large amounts upfront.
Small businesses may also hire primarily independent contractors, seasonal workers, or part-time employees—which likely means you would be paying for more coverage than needed with traditional workers’ compensation.
Additionally, small businesses may not have the manpower to handle workers’ comp claims or hire a temporary employee to take over while someone is recovering. Without an HR department, other members of the team would likely have to step in to help. This would mean their own projects being put on pause, or paying overtime for them to get all of their work done.
Cost-Management Strategies for Small Businesses
1. Implement a safety training program
Risk management is crucial for helping keep workers’ compensation costs down as well as helping you maintain a safe work environment for your employees. Start by implementing a solid safety training program for both new hires and your existing employees. Offering these training sessions within the onboarding process is a great way to encourage safety right away and get new employees up to speed with company culture.
2. Stay on top of workers’ comp claim filing
Delays in workers’ compensation claim filing can be costly. When an employee is injured at work, it’s important to stay on top of the process so that they immediately receive the medical care and support they need. What begins as a minor injury could end up escalating without proper care right away—which can be detrimental both to your business and to your employee.
3. Consider pay-as-you-go options with a PEO
Professional employer organizations (PEOs) offer pay-as-you-go workers’ compensation options that can be incredibly helpful for small businesses. If your employees work on a project-by-project basis, are seasonal workers, or even part-time employees, you could benefit from working with a PEO. Pay-as-you-go workers’ comp allows you to pay only for what you need, when you need it. This means you won’t be required to pay large lump sums upfront—you’ll simply pay as you go.
Additionally, because PEOs work with so many businesses, by pooling all of their clients in together they’re often able to negotiate more affordable rates for great coverage.
Managing Financial Risks with Workers’ Comp
The financial risks that come with workers’ compensation can seem overwhelming for small businesses. Implementing safety training programs, staying on top of claim filing, and considering pay-as-you-go options are great ideas to help manage those risks.
Working with a PEO can be incredibly beneficial for streamlining the process. Not only do PEOs offer pay-as-you-go workers’ comp options at more affordable rates than what you would see with traditional insurance, but they can also help your business implement employee training programs that help build the foundation for a safe work environment. In addition, PEOs handle the filing process, so you won’t have to worry about staying on top of potential workers’ comp claims.
If you’re ready to alleviate some of the burden and effectively manage workers’ compensation costs for your small business, reach out to the experienced team at OCMI workers’ comp today!
Workers’ compensation insurance is crucial for any business. Whether you own your own business or you’re the manager of an HR department, you know how important it is to have your workers covered. In addition to protecting your employees if they get injured on the job, workers’ comp also protects you and your company financially. Without coverage, you could be expected to pay out of pocket if one of your employees gets hurt at work.
Though workers’ comp is vital, the process of filing a claim can be somewhat overwhelming. A lot goes into properly filing a claim—from correctly classifying workers and gathering required documentation to ensuring there are no errors in calculations.
Integrating technology into the process can help make workers’ compensation claims more streamlined. When you partner with a PEO (professional employer organization) they can utilize technology to improve claims management. Let’s take a look at the impact of technology on claims processing and key technologies for improving claims efficiency.
The Impact of Technology on Claims Processing
Accurately filing workers’ compensation claims is essential for both your employees and your company. When errors occur, the entire process can be delayed—costing you both time and money. For employees who’ve been injured, receiving the full reimbursement amount right away is imperative when it comes to seeking medical care. Without that reimbursement money from the insurance company, they may be forced to wait to receive the care they need.
As an employer, a workers’ compensation claim mistake will mean spending time searching for the error and adjusting the numbers accordingly. When your team already has their hands full, backtracking can be incredibly costly to your business.
When it comes to workers’ compensation, automation can play a major role in the efficiency of the process. PEOs utilize software that can help streamline the process and ensure that claims are filed accurately and employees are reimbursed as soon as possible.
Key Technologies for Improving Claims Efficiency
PEO software offers many features that can help improve workers’ compensation claims efficiency. Partnering with a PEO means employers and their employees will have access to a mobile app with their own personal portal. This user-friendly hub allows workers not only to clock in and out and view their pay stubs, but also to file their own workers’ comp claims and access telehealth tools. Being able to access everything themselves empowers employees to be proactive with their claims process and get the support they need right away.
A mobile app with a user portal also means necessary documentation can be uploaded and accessed at any time. If any required paperwork is missing, users will be able to see what’s still needed in order to get the ball rolling. This software also allows users to see the status of their claim in real time. This means that employees won’t need to constantly call to check their claim status—they can simply log in to their portal for updates.
Telehealth is another emerging technology that can be used to help improve claims efficiency. For injured employees, after the initial visits to receive immediate medical care it’s important that they continue to get ongoing support. Digital communication makes follow-up visits quick and easy to schedule as well as more accessible for someone who may have a hard time getting out of the house after an injury. These accessible follow-up visits also help ensure your employees stay on track toward a full recovery. The live chat feature may also be available for employees who have a quick question about their recovery and may not need a full appointment.
By utilizing mobile apps, telehealth providers can create rehabilitation plans for injured employees, helping make the return-to-work process as smooth as possible.
The Future of Workers’ Comp Claims with Technology
Integrating technology into the way you file your workers’ compensation claims can drastically improve the entire process. Streamlining your claims with PEO software to easily upload necessary documents and check the status of a claim—all while automating the process—is essential for efficiency. If you’re ready to improve your workers’ compensation claims process by partnering with a PEO, reach out to the experienced OCMI workers’ comp team to get the support you need.
