Workers' compensation insurance costs can weigh down a company's budget. However, with a Professional Employer Organization (PEO) you can better control your workers' comp costs. Expert-level PEO services provide your business with the best opportunity to reduce workers' comp costs.
Even without a PEO, your business can still implement cost control measures to save money. Your biggest savings, however, will come from a PEO partnership.
The cost of workers' compensation insurance coverage depends on many factors. Cost per employee can range from just pennies per $100 of payroll to several dollars per $100 of payroll.
The more employees you have, the higher your rates will naturally be. The riskier your industry, the higher your rates. For example, the construction industry is a dangerous industry. Workers routinely suffer injuries causing an increase in workers' compensation premiums for their employer. Because this industry is higher risk, the insurance company providing your workers' comp coverage will charge a higher rate, even if your company has had no claims to date.
It's important to be proactive and take steps to reduce your premiums. Your PEO can provide you with a comprehensive package of ways to reduce your expenses, including workers' comp. You can start to reduce your costs by following these five steps:
When an employee suffers an on-the-job injury and files a workers' comp claim, the insurance carrier pays out lost wages and medical expenses to that employee. This will cause your rates to go up. To prevent or reduce the number of injuries your employees suffer, create a culture of safety. Written safety policy and regularly training your employees on safe working habits helps to prevent workplace injuries, reducing your overall workers' comp burden.
Your company can also work to reduce the cost of your individual claims by creating a return-to-work program. Getting your injured employees back to work, even in a part-time or reduced working capacity, removes them from the workers' comp benefits and reduces your company's burden.
Every business faces risk. By identifying the areas of your business most at risk, you can take proactive steps to reduce the risk. Through the development of a risk management plan, your company can implement changes that may reduce the likelihood of on-the-job injuries and minimize the amount of workers' comp expenses your company faces.
One of the ways that insurance companies determine workers' comp premiums is through an experience modifier (E-mod) rate. Your E-mod rate is determined by your company's workers' comp claims history. The more claims you have had in the past, the higher your rate. By implementing programs, you can work to reduce your E-mod rate as your claims history goes down.
The best way for your company to control workers' comp costs is to partner with a trusted PEO. A PEO provides your business with access to HR experts who can help you implement some of the above changes to help reduce your workers' comp costs. The next section will show how a PEO provides the most efficient workers' comp cost control mechanisms.
A PEO provides your company with a whole suite of HR services, including workers' compensation. Your PEO can help your company reduce costs in many ways, including providing you with expert advice on all of the above solutions. Understanding how PEOs control workers' comp costs shows you just how impactful the right PEOs services are for your company.
Developing and implementing a return-to-work program sounds overwhelming. PEOs have experience setting up return-to-work programs and can customize them to your exact business needs.
Along with a return-to-work program, a PEO can also help you develop a best-in-class safety training. Training all new hires and providing ongoing training for your employees and supervisors can reduce on-the-job injuries.
Part of what determines your workers' comp premium is the worker class codes for each of your employees. If your company operates in a high-risk industry, like construction, appropriately adjusting worker class codes may greatly reduce the premiums for your employees.
When you join a PEO, you gain access to their existing workers' comp plan. This frees up your cash flow because there are no upfront fees for you to pay and your premiums are set up as pay as you go.
Auditing your company for risk is time-consuming and challenging. Your PEO can take the time necessary to provide a full audit of the risks and present a plan for how to address those risks, allowing you to keep your time focused on your core business needs.
When you join the PEOs workers' comp plan, you also get access to their E-mod rate. This rate may be substantially less than what you would get on your own, further reducing your costs.
When you have HR experts working with you, you can reduce the number of claims by eliminating fraudulent claims. While most employees file legitimate claims, some are not so honest. Your PEO can review each claim for accuracy and ensure that only truly valid claims receive benefits.
Controlling your workers' comp costs can seem like an uphill battle. But with a PEO at your side, you can reduce your burden.
The right PEO can provide you with a comprehensive suite of services, including workers' compensation coverage analysis. A PEO is the most efficient way to control your workers' comp costs.
Derek is the Vice President of Sales Growth. He is a proactive leader with refined business acumen and exemplary people skills. He has progressive experience in sales leadership with the skills to drive business growth, capitalize on new revenue potential, and execute proper territory maximization