During the recession, inadequate attention has been given to the burdens the economy places on injured workers and the employer work programs that are trying to assist them. Saving money in their workers' compensation programs while finding transitional positions for those returning to work is a challenge for employers. How do you find restricted duty for a returning employee when full-time, full-duty employees are being laid off or having their hours reduced? How do you effectively manage costs while maintaining a return-to-work program?
Employment rates tend to rebound much later than the economy itself. Disability benefits seem to have a slow rebound as well. The National Council on Compensation Insurance reports that workers' compensation payers are funding temporary total disability benefits longer than before -- likely due to the recession and less return-to-work opportunities.
As injured employees recover at home, they may worry about the end of their recovery period and an end to their disability benefits -- a likely incentive not to get well and rush back to work. It may also encourage family members of the injured employee to get medical issues taken care of before they may lose benefits.
The economy is not the only factor influencing the actions of injured employees. With a reduction in the workforce, there is more work to be done by fewer people and those still working may be too concerned that their jobs could be eliminated to report injuries. Others may not report minor injuries because of the fear of being replaced. Employees are likely working beyond full capacity within their work schedules and are unable to pick up the work of a co-worker out on disability.
The economy and unemployment rates had led to a reduction in workers' compensation claims, but it has also contributed to a drop in funding for return-to-work programs -- a short-term reaction that will cost employers more money in the long run. In 2010, the frequency of workplace injuries increased 3 percent according to NCCI. That's the first time in almost 20 years.
Failure to return injured workers to work when they become available for restricted duty costs employers in experience, quality product/service, and the costs associated with longer benefit periods. Morale can also be damaged.
Employers seeking to cut workers' compensation expenses may cut or delay their return-to-work programs. Instead, employers should note that a strong return-to-work program improves business by saving them money over time. The longer an injured employee is out on disability leave, the higher the cost to the employer. It affects claim reserves, raises claim severity, and can also increase the possibility of litigation. It is important, even when a company's bottom line is being influenced by the economy, for employers to implement and/or continue with their return-to-work programs.
The longer injured workers are away from the workplace, the less likely they are to return. Quick, proactive steps must be taken. Good communication ensures that the employee understands the benefits of returning to work. Early return has mutual benefits: a long-term recovery for the employee and a reduced long-term absence for the employer. A successful return-to-work program will transition an employee back into their job with responsibilities and tasks modified for short periods of time. Insisting on returning to full duty, however, can increase an employer's workers' compensation costs. Long-term injuries and illnesses often result in reduced mental and physical fitness; the worker is not prepared for going back to work. A gradual return to work will build their work stamina and improve the chances of them returning and remaining at full duty.
That doesn't mean sacrificing working employees to allow injured employees to return. Eliminate "make work" positions and focus on work that needs to be done for the facility to work at peak efficiency. Keeping skilled and experienced workers for the next upturn is an investment. Having to replace and re-train employees when business grows is more expensive in time, quality and money. There is no easy answer but employers must measure the impact as they make decisions. Helping to return injured employees to work as quickly and safely as possible is the best outcome for all involved.
Next Step for Employers
A properly implemented and successfully managed return-to-work program is prosperous and proven business strategy, no matter the state of the economy. They get the injured worker back to work while reducing overall costs. A long-term absence debilitates the injured worker as well as a company's bottom line.
MARK NOONAN is a managing principal and the senior knowledge manager for workers' compensation for the Casualty Practice within Integro Insurance Brokers.
December 1, 2011
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