Workers’ Compensation, like other employee benefit programs, continues to be a major expense to most employers, says advisor Tom Bone in an article published today by Insurance Thought Leadership.com.
The article, The Changing Insurance Marketplace and How It Can Affect How Employers Manage Costs, describes how decision makers are always looking for ways to better manage their costs, but sometimes containment is out of their control.
As an aside, Insurance Thought Leadership has published my White Paper in serial format, as well as a few other earlier blog posts, so I highly recommend them. You can read them on their website or go to my LinkedIn profile and look under Publications.
Mr. Bone also says that employers who have had a series of injury claims, or even one large claim, have experienced greater increases in their workers’ compensation premiums, because of the way their Workers’ Compensation Experience Modification calculation was changed.
This has led many employers in the US to consider using a Professional Employer Organization (PEO) or employee leasing organization. A PEO is an arrangement where an employer transfers their employees to another organization who then “leases” them back to the original employer. This usually relieves the employer of managing employees, handling payroll and employee benefits and HR functions, but the employer is considered a “co-employer”.
Some of the key takeaways of Mr. Bone’s article are as follows:
- Workers’ compensation insurance, like other employee benefits programs, continue to be a major expense to most employers.
- Late last year, the workers’ comp market began to change and insurance companies began to raise rates and become more selective about which employers they would keep or consider as new customers.
- As a result of these premium increases, there has been a move by employers to seriously consider a Professional Employer Organization (PEO) to take the place of their workers’ comp and employee benefits programs.
- Employers who are historically financial losers to the insurance industry are also financial losers to the Professional Employer Organization organizations.
- It can no longer be assumed that a Professional Employer Organization is always a viable alternative to employers who are not controlling their cost of work injuries.
What this all has to do with medical tourism will be clear once you see some of the changes Mr. Bone recommends that employers should make, in order to avoid a history of frequent or costly work-related injuries so that employees will not become “patients” of the workers’ compensation medical system.
- Accept that workers’ comp is a way to finance claims
- Understand that you, as the employer, are ultimately paying for each work injury — have a claim and you the employer pays it back plus more
- Take the selection of employees and safety in the workplace more seriously — match the characteristics of the job with the characteristics of the candidate being considered
- Take an active role in the claims process
- Train employees in safe work practices and hold them and their supervisors accountable
- Maintain a respectful and positive relationship with employees
- Create an open working relationship with a medical clinic that practices “evidence based medical treatment”
- If you do not have the resources to make changes, hire the appropriate insurance advisor to help them
Unfortunately Mr. Bone left out one or two more changes employers can make.
- Implement or have your insurance carrier, implement medical tourism to select medical tourism destinations through experienced and reputable medical tourism facilitators, or if unable to do so because of state laws and regulations.
- or get your state legislators to change the rules and regulations regarding workers’ compensation secondary level care, so that employers can realize greater savings from most surgical procedures common to workers’ compensation injuries, and to provide the same or better quality of care.
A PEO may save an employer some money in the beginning of the claims process because the injured employee is their concern, not the original employer’s (co-employer) concern, but if medical tourism is implemented down the road for non-emergency cases, at a secondary care level, both the co-employer and the PEO can save money. And in addition, the employee can benefit from recuperation in a relaxed setting, and even possibly in their home country if they have ties to medical tourism destinations in the Caribbean and Latin America, as more workers in the US will be of Hispanic descent.