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Return-to-work/incentive programs.

All risk managers would like to reduce their companies' workers' compensations claims. Over the years, many methods have no doubt been tried, but if Risk Manager Charles McDonald's successful approach is any indication, perhaps a return-to-work/incentive program is the way to go. Over the last four years, Mr. McDonald's employer, St. Johns River Power Park in Jacksonville, "has saved $221,000 in benefits it did not have to pay" as a result of a return-to-work program.

What should a risk manager look for when structuring such a program? Mr. McDonald believes that "if you have an incentive program, everyone should know what it takes to get the incentive and this should be in writing. Also, the goals should be realistic -- ones that employees feel cannot be achieved do not offer any incentive." It also helps to establish a sense of accomplishment among the employees if the employer frequently posts their standings within the program. Mr. McDonald notes that when their incentives are on the line, employees will take more of an interest in the health of their fellow workers, encouraging them to get better and making them feel welcome when they do come back.

St. Johns River Power Park measures how the employees are performing all year long and that establishes the incentive level (usually between .1 percent to .5 percent of the employee's annual salary) paid out in December. Mr. McDonald recommends measuring the costs of your workers' compensation program against the cost of an incentive program to determine your own company's appropriate percentage level. At his company, all employees that worked during the incentive period will receive a check, even if they leave the company.

A key factor Mr. McDonald sees as necessary for success is for incentives to be part of an overall program -- there "has to be management commitment; you have to have a readable safety manual; and you need to have safety meetings." The risk management department requires the filing of incident reports on anything that could potentially cause harm to an employee in order to prevent more harmful incidents from occurring. "You also need to have formal investigations of any accidents that you do have."

Claims at St. Johns River Power Park have been handled externally either by an insurance company or a third-party administrator. "We measure what is the reserve level they have set and what the claim actual settles out at. In our experience, we have had savings for three consecutive years." His company did not show a savings last year due to the notable absence of injuries -- the company experienced only one lost time injury last year -- further indicating that the incentive program appears to be working.
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Title Annotation:Joint Florida RIMS Coverage; for reducing workers compensation claims
Author:Kurland, Orin M.
Publication:Risk Management
Date:Oct 1, 1992
Words:447
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