Cost-Saving Ideas: Managing Workers’ Compensation Costs
You must provide your employees workers’ compensation coverage as a mandatory benefit. Local governments can get insurance for workers’ compensation in one of four ways:
- Purchase a policy from a private sector insurance carrier
- Purchase a policy from the New York State Insurance Fund
- Become self-insured as authorized by the Workers' Compensation Law
- Participate in a county self-insurance plan as authorized by the Workers' Compensation Law
Review vendor and self-insured options and costs at regular intervals. If your experience rating and other factors are good, you may find comparable coverage at a lower cost. Self-insured counties may offer workers' compensation coverage to local governments located within the county.
Monitor Your Bill
If you purchase a policy from a vendor, your chief fiscal officer or other appropriate official should review your bill to assess the accuracy of your employees' job classifications and the apportionment of their gross wages and salaries to those job classifications.
If you participate in the State Insurance Fund or purchase a policy from a private insurance carrier, your premium is often based on various factors such as employee wages, level of risk for each job classification and your experience rating. You should request and review a copy of your annual payroll audit (used to determine the job classification and salary allocations for workers' compensation purposes). If your audit indicates that the employee's duties are not properly classified or that positions are not allocated among different categories of risk, you could be paying more in premiums than is warranted.
If your local government participates in a county self-insurance plan, it’s important to know the cost apportionment method to make sure that your allocation numbers (such as salaries or full valuation of real property) are accurate.
Monitor Your Claims
Keep track of where your claims come from so you can actively manage your risk areas and ensure that your operations, policies and procedures aren’t contributing to your liability.
Prevention is the best way to save on workers' compensation costs and to keep your employees safe. Many private sector entities manage their safety programs aggressively in order to save money. Your insurance carrier or a private consulting firm can help you develop policies and procedures to make safety and accident prevention a top priority for your local government.