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One of the best ways to reduce future
workers' compensation cost is to establish a Salary Continuation Policy.
The Ohio Bureau of Workers' Compensation allows companies to pay salary
continuation in lieu of workers' compensation payments. Those companies
that set up a salary continuation policy can greatly reduce future claim
costs.
When an employee is injured and has to be
out long enough to receive paid compensation, the Bureau of Workers'
Compensation will establish a future reserve on this claim. A claim that
would result in $4,000 paid out in compensation could result in an
additional $20,000 reserve being put on the claim. If a claim happens
near the end of the year and goes over into the next calendar year, the
reserve can even be higher. As a result, these claims can have an
adverse impact on a company's Workers' Compensation Experience. This can
be the difference between a company getting into a Group Workers'
Compensation Program or being denied.
The Bureau of Workers' Compensation only
establishes reserves on claims where paid compensation is made. If the
Bureau doesn't have to pay compensation, they don't establish a reserve.
No reserves means greatly reduced future claim costs. Therefore, a
company's workers' compensation experience rate can be reduced greatly.
Many of the companies we work with have
now established a Salary Continuation Policy. If your company is
interested, I recommend that the following elements be included:
Talk with your Workers'
Compensation Actuarial Company and advise them that you are interested
in establishing a Salary Continuation Policy.
Establish the parameters. I
recommend that Salary Continuation be paid initially for no more than
six weeks. If a longer time frame is needed, it should be reviewed
carefully before it is approved.
Pay salary continuation on
certified claims.
Set up a Transitional Duty
Program and advise any eligible employee that he/she will be expected to
return to work on transitional duty as soon as his/her physician gives
the OK.
Work closely with the
employee's physician and advise him of your company's Transitional Duty
Program.
Explain to each employee
your policy at the time of injury and the benefits.
Have the employee sign a
salary continuation policy approval form. This is required by the
Bureau.
Always notify the Bureau of
Workers' Compensation in writing of your intention of paying salary
continuation and the length of time you have agreed to pay. If any
changes occur, notify the Bureau immediately.
Review all serious long term
claims beforehand. There may be little value in paying salary
continuation if the claim could last a long time. Review these with your
Workers' Compensation Actuarial Company.
Stay in close contact with
the injured employee while he/she is off work.
Paying an injured employee salary
continuation may appear odd at first, but believe me — it can be money
well spent in the long term.
If you have any questions on your safety
program or need any assistance, please call American Safety & Health
Management Consultants, Inc. at 1-800-356-1274.
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