Resources & Insights

A Better Strategy to Reducing Your Workers’ Compensation Costs

September 17, 2019

John Kirke,
Executive Vice President, Employee Benefits

Workers’ compensation premiums in Colorado have been dropping but, if you’re like most organizations, costs aren’t as low as you’d like.

You’ve implemented safety training, your HR team has an injury-reporting process in place, and your company’s return-to-work program is getting injured workers back on the job with few hiccups.

Despite all of that, claims frequency remains higher than it should be and, as a result, your company’s Experience Modification Factor is too high for your carrier to even begin considering lowering your premiums.

There is another employee benefits strategy to consider: Providing Personal Accident and Disability coverage.

How does this strategy work? Assume your worker suffers a fall at home or a twisted ankle on the trail. The injured employee could then turn to their Accident insurance policy for help.

The cash they collect from that policy can help them pay for medical expenses such as deductibles and co-payments as well as non-medical costs while they’re recovering, rent and groceries included.

Accident insurance also offers your employees a way to offset the costs of a higher deductible in their health plan.

A Disability policy, meantime, will cover your workers for what is typically up to 60% of their earnings for a period of time, usually no more than six months, depending on what state you’re in.

The idea, by the way, isn’t to circumvent the workers’ compensation system. Claims for on-the-job injuries should be filed through your workers’ comp carrier. But workers who get hurt while away from the job won’t be as likely to file a questionable workers’ comp claim if they have an Accident policy in place.

Premiums for both Accident and Disability insurance can be subsidized by your company or paid entirely by the employee and deducted from their paychecks.

An Effective Approach to Lowering Workers’ Comp Claims

According to one industry survey, 51% of all companies providing access to Accident insurance saw declines in their workers’ compensation claims.

Lower claims, of course, can lead to a lower Experience Modification Factor and the potential for smaller annual premium increases, if not a reduction in your workers’ compensation premium.

With so much about healthcare seemingly up in the air at the moment, one thing is certain: employers (and employees) continue to be concerned about cost.

Two-thirds of employers say rising health insurance costs prevent them from increasing compensation, and many reveal their companies have little extra to spend on their annual benefits contribution.

That fact of life alone is a strong argument in favor of adding Accident and Disability benefits to a company’s employee benefits package. Bringing your workers’ compensation costs lower would be the proverbial icing on the cake.

John Kirke heads CCIG’s Employee Benefits division. He can be reached at 720-330-0453 or

CCIG is a Denver-area insurance brokerage with insurance and employee benefits clients nationwide.

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