Insured Solutions
Insured Solutions

THE #1 MOST COSTLY EMPLOYER MISTAKE

Part OneThe most costly mistake leading to employer work comp problems - as measured by how high an experience modifier can go thus directly impacting how high annual premiums will go is -

The lack of an effective game plan for vetting or screening every single applicant.

Every employers’ peak of vulnerability to future claim problems, note I did NOT say injury problems, but claim problems as measured in dollars is at the…point of hire. At this critical juncture every employer will in fact determine their future work comp Modifier, which is guaranteed to manifest itself in their back pocket during the “”policy year following their next renewal””. Discounting the value of this issue leads to what we refer to in the industry as the -

“my carrier did this to me and now I am really mad” complex.

The sad part is the carriers have cleverly set this up to work exactly as it does because they fully understand how 98% of employers think and act on this truly aggravating subject. Sadly many employers actually believe they are already doing everything possible to screen applicants when in reality they - do not know that they do not know - and their in lies their problem.

PT Barnum has been mistakenly quoted to have said in 1869 *“There’s a sucker born every minute”. Ironically had PT or the actual *author foreseen the future of Work Comp in 2012 they would have also directed this unfortunate line of truism at many of today’s private employers.

THE STING or “Being set-up for the Fall”

Let’s examine the reality of the ingeniously designed Work Comp system (regardless of state), which is always couched in nobility, yet is cleverly designed to pillage every employers back pocket unless or until they figure out how to go on offense. Below are 10 unassailable conditions of fact that are applicable in today’s universe of Workers Compensation.

  • First - Today’s economy is lousy, and even when good it requires work, something many today abhor to their very core.
  • Third - Many of those seeking work have current and/or on-going health problems in need of a costly medical fix.
  • Fourth - Work Comp is “no fault” meaning all it needs to be triggered is an allegation of pain at, near or associated with a real medical problem. That the job caused or triggered the pain is irrelevant meaning….Work Comp says it did, case closed.
  • Fifth - The doctor will find a genuine medical problem being indifferent to if or where it originated since he is a Doctor, not an investigator.
  • Sixth - The Doctor is always empathetic to the patient’s pain and their inability to pay for fixing the problem often suggesting the patient make it a work comp claim so they can get relief at no personal out of pocket expense.
  • Seventh – The Doctor will suggest it be made a work comp claim so he can get paid.
  • Eighth - Work Comp will always come to the rescue of perhaps a genuine medical problem thus resolve the question of who is going to pay the tab.
  • Ninth – The medical fix is ultimately going to be on your nickel times three (refer to the Newsletter on the Experience Modifier and how it is your biggest cost driver)
  • Tenth - Work Comp has legislatively created the perfect fix for those needing medical attention but won’t or can’t get Medicaid; have no other insurance or resources to get pain relief making Work Comp the perfect - de facto health & income disability plan with no waiting period to begin and almost no ending period thus making a settlement the only permanent fix. Settlement can work in your favor if you are correctly positioned…making IF very critical to your success.

BONUS POINT #11 – Guess what…Getting on the Workers Compensation gravy train is a wonderful pension plan or a great way to raise $10,000 to $50,000 in cash if needed and best of all it doesn’t even require there be an injury. Is this a good deal or what?

You ask - How can this amazingly attractive employee entitlement be allowed to continue? Answer – Why not, it works exactly as designed by the state legislatures, nothing is broken. Your Question should be what can I do to avoid the guaranteed premium-raising train wreck heading my way if I fail to protect myself at the point of hire?

Find Out Next Month - Part Two

* PT Barnum did not author this famous 1869 quote. To learn who actually did, visit

http://www.historybuff.com/library/refbarnum.html

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