Better benefits could lead to reduced comp frequency

Employers worried about their workers filing bogus workers compensation claims for injuries that didn’t happen on the job or workers staying out too long on a comp injury might want to re-examine their benefits portfolio: Are deductibles too high? Do benefits include programs to help workers improve their health?

Comp experts say a growing segment of research could help employers create health and wellness plans that ensure injuries don’t end up in the comp space, where there are no copays or deductibles for a worker seeking care.

It’s called “case-shifting,” and it’s what employers need to worry about with regard to costly soft-tissue injuries especially, said Richard Victor, a 30-year industry veteran and fellow with the Sedgwick Institute, the research arm of Sedgwick Claims Management Services Inc.

Mr. Victor dives into the topic in a book released in December, “Threats and Opportunities for Workers’ Compensation Systems,” which predicts what the world of comp will look like in 2030. While the predictions range from labor shortages and managing care for more older workers, case-shifting between workers and providers — who often collect more under workers comp than in group health — is “something that is already happening” due to “financial incentives,” he said.

Recent data suggests a link between high out-of-pocket expenses and the likelihood of submitting a comp claim.

A study released in February 2019 by the Workers Compensation Research Institute found that injured workers are 1.4% more likely to file a workers comp claim if they have a remaining group health deductible of $550 or higher, compared with no deductible at the time of injury. This transfer of care can amount to a 5.3% increase in the workers comp claim volume, according to the report.

In addition, Cambridge, Massachusetts-based WCRI researchers found that the increase in soft-tissue workers comp claims saw an overall filing increase of 6.2% between 2008 and 2014.

WCRI CEO and President John Ruser said the institute researched the case-shifting trend so that employers understand that even though the shift from group health to workers comp looks like “money coming from one pocket to another,” the employer’s costs in comp are typically higher.

“Companies end up internalizing more of the cost when the claim is in workers compensation,” Mr. Ruser said. “Workers comp pays a premium over group health for the same services.”

The data appears to be catching up to the anecdotes, according to Carin Burford, shareholder at Ogletree, Deakins, Nash, Smoak & Stewart P.C. in Birmingham, Alabama, who also teaches workers compensation law at universities.

“What I have seen since the Affordable Care Act is employers who are no longer covering employees, where employees are going off on their own for health care as is allowed by the law, I see that they are making more (comp claims)” with the higher deductible plans, she said. “That’s absolutely the Monday morning injury. … When you have employees shouldering more of the burden, they are going to go the other route.”

What’s worse than high deductible plans when it comes to comp costs? No insurance, especially as regards returning to work: In June 2019, WCRI researchers released a separate report that showed a 2.5% higher rate of return to work for employees with health insurance and that such workers returned to substantial work on average one week faster than workers without health insurance.

Another avenue for reducing comp through benefits — besides re-examining plans with high deductibles — is better managing workplace wellness programs, experts say. 

Aware of case-shifting and that healthy workers often suffer fewer, or less severe, injuries, The Hartford Financial Services Group used its 2017 acquisition of Aetna Group Life and Disability to design a new program for employers that uses data from both disability management and workers compensation to better handle claims, according to Mary Nasenbenny, Chicago-based head of health services at The Hartford.

The program leans heavily on data analytics, Ms. Nasenbenny said, noting that “data really provides a road map to work with employers on how to prevent claims.”

Using that data, companies can tailor their approach to wellness and health, she said, adding that most companies are just catching on to the “very strong correlation between employee health and workers comp severity and frequency.” 

Employment lawyer Ms. Burford called wellness programs “a hot topic in workers compensation.”

“Clients are asking about that now,” she said, adding that it’s the millennial generation that wants the enhanced benefits. “They want the gym memberships, the massages in the breakrooms, the standup desks.”  

“On the comp end … if you look outside the box, if you look at holistic approaches, those are things that not only pay off in getting people back to work (after an injury), it also makes people look forward to coming to work,” she said.