Safety: Controlling Insurance Costs Part 2

May 1, 2011
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Katie Schofield is a loss-control consultant for more than 200 construction companies at The Builders Group (TBG) of Minnesota, a self-insured workers’ compensation fund. TBG was founded more than 10 years ago to provide a long-term, stable workers’ compensation program for the construction industry of Minnesota at the lowest possible net cost to each member. TBG has more than 1,000 members who pay in excess of $40 million in annual premiums.

Many construction companies have trouble enforcing safety rules consistently, Schofield says. She says the written warning and sent-home-without-pay rules are in everyone’s employee handbook. “But many people rarely do it,” she says.

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“Especially in terms of a safety issue, many people rarely follow through on other steps of discipline,” she says. “We tell people that discipline is something they need to work on and do consistently with everyone.” What if OSHA comes to your job and finds someone not wearing a safety harness who should be wearing a safety harness? You need to document that you have done training on safety harnesses, that you have told the employee to wear a safety harness, and that you make everyone else wear a safety harness.

Sometimes, says Schofield, that documentation can get you off the hook with OSHA. If someone doesn’t show up for work, you probably will discipline them. But many times employers don’t discipline people for safety-and they should.

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First Report of an Injury
The faster you can get a claim report to the insurance company, the faster a claims manager can be put on the case, says Schofield. Then the claims manager can start to manage the claim. Where do we recommend this person go for a doctor? What should we do here? Does the person need to return to work?  “The claim can be directed actively from day one,” says Schofield. “If your insurance company gets the first report late, a lot can happen that usually increases claim costs. The medical costs can spiral out of control, and often they don’t need to.”

In the state of Minnesota, if you turn in a first report more than 10 days after the date of the injury, the insurance company can actually get fined for that. “But then in turn, we pass that fine down to the company that turned in the report late,” says Schofield. “Many times when employees get minor injuries-say an employee cuts a finger or needs a stitch or two-employers just pay for it themselves and don’t report it to workers’ compensation.”

That’s a problem. If an employer gets caught doing that in Minnesota, the Department of Labor can fine them up to $10,000 per occurrence. What’s more, sometimes a small injury can become infected or get much worse. “It usually shows up about a week later and needs more significant medical care,” says Schofield. “We have even had people end up in the hospital for a week or two. All of a sudden, there is no first report of injury. The employer has already paid; the insurance company gets the report late. The claim has already spiraled out of control before the insurance company even knows about it and can do anything about it.

Accident Investigations
It’s important to know why an accident occurred. Did someone violate a rule? Did the employer have faulty equipment? Was someone not trained properly? Did we just forget to train this guy? Are we having some kind of employee conflict?

Accident investigations are not to blame someone. Their purpose is to figure out the cause so that it doesn’t happen again. “Sometimes these are very useful training tools as well-both accident investigations and near misses,” says Schofield. “Nothing makes for a better tool box talk than to discuss why a real accident occurred and what can be done about it.”

The OSHA 300 Log
The OSHA 300 Log is OSHA’s way of keeping track of reportable and recordable injuries and the rate and severity of those injuries. Employers need to fill out this log anytime an injury requires more than first aid. You do a count of the number of those that occur in a year. OSHA also keeps track of the number of days away from work, and restricted work, and transferred duty. So, at the end of the year, you often do an incident rate count, which is your number of recordables times 200,000, divided by the number of hours employees worked at the company.

“You often hear of a DART rate, which is days away, or restricted, or transferred,” says Schofield. “You add up all those days, multiply by 200,000 and divide that by the number of hours that employees worked at your company for the year. Often that number is used in bidding. Companies must submit those numbers for bids for projects.”

These numbers must be reported to the OSHA 300 Log, but it is not insurance related. “Many people are under a misconception and are confused about that,” says Schofield. “You download the form from on the Internet.

“People call here a lot and ask us to send them their OSHA Log for the past three years,” says Schofield. “I don’t have that. I do have some record of injuries-probably recordable injuries or injuries sent into workers’ comp, but not necessarily.

“There are some differences between workers comp and the OSHA 300 Log,” says Schofield. “With workers’ comp, we are concerned about the money, the paying of a claim. Perhaps someone hurts their ankle and goes to a clinic to see if it is broken. They get an X-ray and find it is not broken and that they can go back to work. You want to send that to worker’s comp because we are going to have to pay for the visit, the MRI, or the X-Ray. But nothing else is actually wrong with the person and it didn’t require more than first aid. You do not need to report that to the OSHA 300 Log. Incidents of diagnostic matters only-where there is no an actual injury occurrence or lost time-do not need to be reported on your OSHA Log.”