Workers’ compensation insurance and claims experts agree: Return-to-work (RTW) programs can help employees get back on the job after an occupational injury or illness. That makes them a cost-saving and effective workforce management strategy. But the key is creating and managing a truly effective return-to-work program.
“Merely having a policy or occasionally being open to making a temporary duty offer is not enough,” explained Robert Young, Valiant’s vice president. “As an integral part of their safety plan, an RTW plan can help reduce the longevity of an injury. It helps the worker back to work more quickly, in a role that he or she can handle without difficulty, until they’re fully recovered.
“Valiant Insurance Services represents several carriers that excel in assisting clients with risk management tools, including return-to-work programs, that make for safer workplaces, happier employees, and eventually lower Workers’ Compensation premiums,” he added.
However, as one IRMI commentary explained, risk managers must understand that not every temporary alternate work offer will save the employer money. A worker may reject her employer’s offer upon her doctor’s advice. Or a returning employee on light duty may be reinjured, resulting in his filing a second claim that could be even more expensive.
It’s important that your clients evaluate their return-to-work program on a cost-analysis basis, comparing year-over-year results of total claims, average claim duration, average claim cost and more, to see how results are trending.
But many workers’ compensation advisors believe there are other metrics to consider as well. Before we dive into those benchmarks, we’re first going to lay the groundwork of best practices for a return-to-work program.
How critical is a return-to-work program?
Well-documented in their ability to reduce both the costs and the duration of workers’ compensation claims, RTW programs minimize the economic and human impact of disability. According to the New York Workers’ Compensation Board, an effective RTW program can save a company 35 percent in medical costs and 30 percent in lost time days.
Any delay is costly in the workers’ compensation system: The experience modification factor calculation is weighted so that the first $5,000 of every case counts the most. Any bottleneck can lead to a lost time claim which will exceed this $5,000 value. If your clients can operate their return-to-work program at a level where lost time claims are routinely avoided by providing modified work, they’ll see reduced workers’ compensation costs. The Dept. of Labor offers a return-to-work toolkit for employers that can help.
Consider the alternative of no RTW program: An injured worker on medical leave is receiving close to their full salary with workers’ compensation benefits, yet contributing nothing to the company’s bottom line. The employer, on the other hand, will need to pay a replacement employee to do their job while they’re off duty. Essentially, they’re paying twice the salary for the one job. This likely will also result in increased premiums in the future, continuing for the three years of the experience period.
As a cost-saving measure, a RTW program can help reduce claim reserves – the amount of dollars set aside for future claims. Second, it can improve experience modification ratings, which impacts not only rates but possibly your client’s ability to win a bid for a future contract or business based on their in-depth RFP.
A successful RTW program works hand-in-hand with a safety management system. Once an injury occurs, their RTW is the next best way to reduce the human and financial impact of injury. It also assists in reducing the potential for secondary conditions – both physical and psychological – from developing, ranging from depression, anxiety, loss of motivation or confidence to substance abuse, weight gain and loss of muscle tone.
In a nutshell, a well-oiled RTW machine works to ensure employees recover faster both physically and psychologically and return to their full-duty jobs sooner, leading to improved morale, better performance and lower premiums for employers.
Five factors of a return-to-work program that contribute to its success
1. An RTW program is part of a larger loss management program, not a free-standing plan. It’s step three in the process, after 1) accident reporting/ investigation and 2) medical treatment.
“This synergy is critical, because your medical providers must understand your business and work with you to determine the optimum temporary alternative work for the recovering employee,” Young explained.
Your company should have on file written job descriptions that detail physical requirements to provide the doctor, to help in the assessment. Otherwise, doctors are on such tight schedules that, without knowing the physical requirements of both the injured worker’s permanent job and temporary role, the doctor may simply take the safe route of vetoing work of any kind.
2. Active communication with the doctor. Receiving up-to-date medical reports can help place the injured employee more quickly into a temporary role. It’s best to have the employee either drop off the report personally after their visit or ask the doctor to provide your client with updated reports. This allows the employer to make the offer of alternative work more quickly, in time to prevent a medical-only claim from becoming a lost-time claim.
3. Ongoing review of the modified work role. Ideally, the temporary job should last 30-90 days. The plan should include a weekly review of the injured employee’s performance in their alternative role. That way, if the worker is struggling physically in the easier role, or has a bad attitude, adversely affecting those around him, your client can catch it early and consider withdrawing the offer. You can help them make the call as to whether it’s more costly to keep the employee in the modified role or to place him back on benefits.
4. Supervisor buy-in. Playing a key part in the success of your client’s program, their supervisors can help not only establish job descriptions but also modified duty assignments. They monitor the employee’s healing progress and performance in the modified role. They also ensure that the injured worker doesn’t exceed work restrictions, possibly aggravating the injury.
5. Careful documentation of their RTW program will help in future litigation. First, your client is minimizing the risk of litigation from the present claim, because they can show the employee refused a reasonable offer to return to work – therefore he or she should not receive continuing benefits. “Without a job offer, the odds of having a judge remove an employee from workers’ compensation benefits are close to nil,” said the previously mentioned IRMI article. Additionally, when litigation does occur at some point, your client has a track record to show their ongoing procedure of making good faith job offers, thereby greatly strengthening their case.
“From time to time your workers’ compensation clients will experience situations where a job offer does not result in net savings to the employer,” Young added, “however, that doesn’t mean your return-to-work program is not beneficial in general.”
RTW strategies have proven to save employers money and help them maintain a stable workforce. The long-term alternative? According to the Bureau of Labor Statistics, after six months, there’s only a 50 percent chance that an injured employee will return to work. After one year, the chances of a successful return to work drop to 25 percent.
This article was edited and updated from an earlier post on Arrowhead’s blog.
“Measuring the Value of Return-to-Work Programs in an Economic Recession” from The Self-Insurer
Six Benchmarks for Evaluating Return-to-Work Programs
Return-to-Work Program Assessment
New York State Workers’ Compensation Board Return to Work Program
Workers Compensation Return-to-Work Programs: Cost Savers?