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Why Safety Pays | History | Program
Design
Why Safety Pays
In principle, workers' compensation is a good and necessary
requirement. An employee working in the private sector is entitled
the security this coverage affords should he suffer harm as
the result of an accident. Unfortunately, what is theoretically
a good idea has become a disaster of immense proportion in its
execution. What exists today is an institution which rivals
only the welfare system in its inability to objectively provide
benefits where the need truly exists.
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Rather than enact needed reforms, state legislatures have instead
broadened injury definitions to include such intangibles as "job stress".
The inevitable result is a system overburdened by specious claims,
and worse, massive abuse.
Meanwhile, private companies are expected to foot the bill via statutory rates
increased regularly by the legislature. To illustrate just how exorbitant worker's
compensation costs can be, consider the example of a typical company in the
meat industry. Assuming average claims exposure, the yearly workers' comp premium
for such a business is nearly 20% of its annual payroll. If its claims experience
is higher, that premium could double, triple...in certain cases, even quadruple.
Imagine having to pay as much as 80% of one's annual payroll for workers' compensation
coverage. It's little wonder many insolvent companies attribute a major factor
in their demise to the skyrocketing cost of workers' comp.
To make matters worse, the workers' compensation system has become a favored
vehicle for the commission of fraud and misrepresentation, due primarily to
the legislative changes mentioned earlier. Contributing to the problem have
been the dozens of legal clinics created by enterprising lawyers "to protect
worker's rights". They're more than aware most claims (particularly those relating
to back pain and stress) are impossible to disprove . Quite simply, the way
the system works is that if just one doctor verifies an alleged medical problem's
existence, the employee is entitled to medical, disability and rehabilitation
compensation. It's an atmosphere ripe for collusion. When a company disputes
a claim, its carrier inevitably settles because of the enormous cost of fighting
such an action. In fact, over 99% of those claims denied by companies are settled.
Even in those rare instances where a claim's denial is upheld, the law nevertheless
requires that all of the claimant's medical and certain other expenses be reimbursed.
Overall there has been little if anything the private sector has been able to
do to stem the tide of rising claims. Any attempts to fight the problem have
either been met with tighter legislative controls or created an atmosphere of
hostility and distrust between management and its workers'. This was the dilemma
facing the developer of Safety Pays five years ago. He realized the only solution
was to create a means by which a company's employees would somehow become as
vested in reducing claims as management. The result was the creation and implementation
of what was to become the Safety Pays program. One year after its introduction
into the company for which it was originally designed, a premium savings of
over $60,000 was documented. To date over a million dollars has been saved at
this business since the program's implementation. With this success, it's abundantly
clear that Safety Pays provides a long sought after solution which thousands
of businesses in virtually every working environment can now utilize.
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