11 Tips to reduce your annual workcover premium and/or your overall workcover costs
Firstly, you can shake it, you can bake it but there are three main factors that make up the DNA of a workcover premium:
• Workcover Industry classification
• Total Remuneration
• Claims Cost History
To change your premium you have to change one or more of the above AND/OR you can save by paying your premium early (surprisingly, not too many employers seem to know about this).
1. Take advantage of the 5% discount if you pay your premium in full by August 5th or 3% if you pay by October 1st 2018.
To qualify for the 5 percent discount employers must:
• Pay any outstanding balance from 2017/18 (or previous years); and
• Pay their full 2018/19 premium (less the 5% discount) by 6 August 2018.
To qualify for the 3 percent discount employers must:
• Pay any outstanding balance from 2017/18 (or previous years); and
• Pay their full 2018/19 premium (less the 3% discount) by 1 October 2018.
We all know that paying up front puts a dint in the cashflow, but when you think of it, that 5% is better than bank interest if you can pay it without dipping into an overdraft. Speak to your accountant or financial advisor for definitive financial advice to determine which is right for your circumstances.
2. Injury prevention – understand your risks and then take steps to reduce them
“One ounce of prevention is worth a ton of cure”. This is so true of workplace injuries – identify the things that can harm your staff and fix them. Simple? Well yes and no.
Look around your workplace. Are people exposed to frequent lifting or carrying? Unusual postures? If so, there is a huge chance you will end up with a musculoskeletal injury claim (and these are among the biggies).
Is it a noisy workplace? Yes? Well you might get a hearing loss claim (even if you supply them with hearing protection) unless you take steps to protect yourself.
Mobile plant? Machinery? Dust and fumes? Cold/hot working environments? There are countless risks in just about any workplace.
Take our Workplace Health and Safety Health Check today – it’s free and can save you a lot of time, effort and grief down the track.
3. Early intervention – get your employee back to work As Soon As Possible!
Sadly, injury claims are not like vintage wine, they do not get better over time. Any expert in this field will tell you that getting a worker back in the workplace is greatest step to take to get them back permanently. It helps them, it helps you and it helps workplace morale. That’s why all employers have a legal obligation to have a Return to Work Plan. If you don’t have a Return to Work Coordinator, we can take you through that process from go to whoa.
4. Make sure that the information you provide to Worksafe is accurate – don’t pay too much!
Your premium is calculated on your annual remuneration and your Workcover Industry Classification (WIC). There are literally hundreds of WICs and businesses can have one or more depending on their “predominate activity” which bases the premium cost on the risks inherent in your industry. For example, an accountant at an accounting firm is probably going to have less of a chance of injuring themselves than a cleaner working for a cleaning company, so their WIC rate will be less. But what about a cleaner at an accounting firm? Or an accountant at a cleaning company? That is where things can get messy and complex.
Workcover will provide you with a WIC but that doesn’t mean you can’t have it reviewed. Sometimes they get it wrong.
5. Educate yourself and your staff – don’t live in the dark – you need to understand the cost of claims and how things like the time that claims are open, when they cross from year to year, etc affect your premiums going forward
You don’t need to be an expert in Workers’ Compensation matters – we do that for you! But it is a good idea to have an understanding of things like what drives your premium costs and how expenses, lost time and cost projections affect your premium.
6. Closely manage your claims – don’t let things get out of control
Decisions on your claims will rarely involve you. That doesn’t mean that you can’t have input over decisions that increase the cost of the claim (and your premiums) such as getting the employee to attend an Independent Medical Examiner (IME), appoint a Factual Investigator (and who they use) and, if you think there might be some fraudulent activity Worksafe can appoint a Surveillance Investigator.
Workcomp have several preferred investigation firms that we know conduct high value work. Unfortunately, there are quite a few firms out there that are quite amateurish and a poor investigation can truly affect a claim to the employer’s detriment.
7. Be very careful when using subcontractors
Unfortunately, subcontracting work doesn’t always mean that you don’t have to pay the workcover payments for them if they get injured. Depending on how you contract the work out, Worksafe may “deem” that subcontractor as an employee. This is a real minefield – in some cases you could be up for long service leave, superannuation, etc, etc. There are some fairly simple tests that we use to determine whether or not the subcontractor could be deemed as an employee.
If the injured subcontractor is deemed to be an employee, then those claims costs can be used to determine your premiums for the years to come.
8. Look out for the “red flags” – this is your early warning system
There are a number of red flags that we look at fairly early in the claims process. This doesn’t always mean that the injured worker is being tricky or fraudulent, it just means that more likely than not, the claim is not going to resolve itself as smoothly as we would hope.
The following is a list of just some of the red flags (there are many more):
The injured worker
Anxious and distressed
Relationships and communication with fellow team members have deteriorated
Supervisors and work records indicate a history of under performance
Attends a doctor a long way from home or the workplace, or a physician known to be problematic in managing work injuries
Difficult to contact
The injury report is significantly delayed
The injury is severe/surgery will be required. Surgery is delayed for a significant period after the initial injury. Stress is a significant factor.
There are significant differences in the assessment of the injured workers work capacity between medical practitioners
The details of the accident are vague or contradictory
The worksite has a culture of claims
There is a focus on statistics such as lost time injuries hours, at the expense of the well-being of the employee.
Frequent changes in treating practitioners particularly once capacity for work has been identified
Treating medical practitioner/s seen as advocating for the worker rather than directing focus on the importance of early and sustainable RTW
9. If you dispute a claim there is a process to follow to achieve the best results. There are some do’s and don’ts
10. Consider the claims buy out provision – this will depend on your risk profile and your overall premium but can be a way to lower your own direct claim costs (unfortunately won’t affect how your premium is calculated)
If you have a micro business (say 2-3 employees) and a fairly low remuneration then the cost of buying out the excess can be cost effective if there is a claim. Currently, the excess for any one claim in 2018/18 is $707.00 plus wages for the first 10 lost time days.
11. Call WorkComp today on 1800 330 316 for your FREE 15-minute consultation
Reducing your premium and claims costs is a two-stage process: stage 1 is to hit the “low hanging fruit”, the easy stuff that we can do quickly and easily. The second stage takes a bit longer and is a bit of a project. The good thing about stage 2 is that it provides long lasting financial gain, will streamline your injury management systems and help business owners sleep better at night.