We often find ourselves working with the Human Resource Manager of a businesses on a workers compensation problem. Most of the time these problems are related to workers comp audits, classifications or re-classification of employees into different workers compensation codes. In other words, premium related problems. Let’s talk a little bit about how an HR Department Manager can get ahead of potential workers compensation problems for their company.
Many folks wear many different hats of responsibility. We’ve all seen it. For example in a small business, the owner not only wears the hat of the human resource director tasked with interviewing, hiring and firing workers but also manages benefit programs, oversees product development, the sales force, production and distribution of their product, accounting along with buying supplies and making coffee! For a small business there’s often no choice. After all, if the job’s gonna get done someones gotta do it! This same situation often spills over into very large companies with dedicated departments responsible for assigned work tasks. And it’s this very reason that we often find the duties of managing a workers compensation program under the responsibilities of the Human Resource Manager.
Classification of workers under a workers compensation policy can be confusing for many involved. There are a multitude of seemingly contradicting rules that govern the proper classification of an employee. From an employers stand point it may often times seem that the insurance company has all the power on their side. It may seem like it, but they don’t!
Class code adjustments occur for a variety of valid reasons. They also occur improperly. Unfortunately the workers compensation system has an overall poor record of communication. So it’s usually at audit that the unsuspecting employer finds out about a re-classification of their employees leading to a significant increase in premium.
The audit process is another area that often causes problems for HR Departments. Workers compensation audits, while simple in concept, can cause significant, seemingly unexplained increases in premium. Audit problems for an employer, just like class code issues, seem shrouded in a cloak of secrecy! Again, the insurance company knows the rules but the employer does not! Errors occur in audits and, without oversight, an employer may overpay premium for years without knowing that a mistake has even been made. We’ve reviewed cases in the past where an auditor has continued to copy and paste incorrect company information year after year making the same costly mistake time after time for the employer.
Faced with an out of control Experience Modification Rate or EMR? Often we find that the HR Department is tasked with monitoring and in some cases re-gaining control of an out of control EMR. This policy modifier can have a significant impact on an employers ability to secure, and in some circumstances maintain, contracts for work. Be sure to visit our website for detailed information about EMR’s, the problems they can cause and to learn what an HR Department can do to get things back on track.
What should a Human Resource Manager do when faced with these types of workers comp problems? Here’s a few tips:
- Contact your insurance broker for a detailed explanation of your situation;
- Review the audit documents supplied by the insurance carrier for obvious errors;
- Review EMR’s for accuracy and ask for help when things seem to be out of control;
- Contact a Workers Compensation Consultant for assistance. Sometimes it’s a good thing to have another set of eyes on a problem!
Remember, if you’re an HR Manager or the owner of a business, there’s help out here for complicated workers compensation problems. You don’t have to go it alone!
Hope this helps out and thanks for reading!