According to insurance companies, specific industries are at high risk and require broader workers’ compensation insurance coverage. The premium level is set high for them, which often becomes a burden in the long run. If you are one such company dealing with high premiums and invalid claims, you can take the help of a Professional Employer Organization (PEO).
But how exactly PEOs help reduce the workers’ compensation cost?
Here’s a guide to educate you about all the ways PEOs manages to lower workers’ compensation insurance premium and their overall cost in a breeze.
How PEOs Reduce Workers’ Compensation Costs?
When you outsource the task to a PEO, it staffs your workplace with HR experts that incorporate sustainable cost–saving methods and reduce overall cost. Some of the ways are mentioned below:
● Ensuring Worksite Safety
The main factor influencing insurance premiums is whether the workspace is highly contagious to employees’ health. PEO helps lower the cost by looking at the organization’s safety programs, implementing better measures, and maintaining an injury-free environment.
● Managing Workers’ Compensation Claim
A company has to dedicate a large chunk of its operational time to looking after workers’ compensation claims. PEOs help by taking over this complex and time-consuming job. They save costs by preventing fraud and giving enough time to the company to improve its production.
● Implementing Return-To-Work Program
Workers’ compensation costs reduce drastically when a company implements a return-to-work program. However, as it is a complex process, it can be overwhelming to introduce without expert help.
PEOs have the required experience and thus help customize the program to benefit the company. When injured employees join the work (even part-time or at reduced capacity), it lowers the workers’ compensation benefit and the overall burden on the company.
This is not it! PEOs also work on strategies to lower workers’ insurance premiums to reduce the cost incurred after an employee. Some are pointed out in the next section.
Effective PEO Strategies to Lower Workers’ Insurance Premium
Working with a trusted and experienced PEO gives the required peace of mind. They help manage risk by bringing precision, reducing accidents, and saving costs. The strategies PEOs use to lower workers’ insurance premiums are as follows:
● Safety Training
PEOs help keep your employees safe by providing them with top-class safety training. Moreover, it is not only for your recruits but also for the existing ones as revising safety measures at regular intervals is necessary. This, in turn, reduces the total number of mishaps taking place at the workplace, thus lowering the insurance premium amount. Moreover, this service is available at no extra expense.
● Maintain a Lower Experience Modified Rate
Experience Modified Rate (EMR) is the basis on which insurance companies calculate your workers’ compensation insurance premium. If the rate is high, the insurance premium rate is also high. So, here a PEO helps reduce this rate by including you in its existing workers’ compensation plan.
● Correct Employees Classification
Each employee working in your organization is classified under a worker’s code. However, there are times when an employee is fit for multiple codes. Here, if you choose the wrong code, it can increase the premium amount of the employee. So, a PEO helps by ensuring an employee gets the correct code with the lowest compensation rate.
Getting professional assistance from a PEO is a one-stop solution to solve all your problems relating to burdened employee costs, HR management, payroll system, and others. So, if you require a managerial expert to help you out in these areas, reach out to us. Moreover, if you want to know more about what a PEO can do for you, explore our blog section.
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