Emphasis on safety helps reduce workers’ compensation claims
Every job brings a degree of injury risk in one way or another, from office jobs to people on a manufacturing floor.
Workers’ compensation is designed to alleviate a worker’s anxiety over that risk, by providing lost wages and covering medical expenses as a result of a workplace injury. According to experts, claims have been on the decline over the past few years due to companies placing a larger focus on safety.
Jackie Bott, chief financial officer with manufacturer CID Associates in Buffalo Township, said new employees go through a full day of safety training, which includes ladder safety, work truck safety, risk safety and training related to various federal Occupational Safety and Health Administration guidelines.
This information also is reiterated each year to all employees to refresh everyone and go over any new OSHA standards.
Steve Warheit, production manager with CID Associates, said the company is working on breaking its previous record of 1,042 days without a lost-time injury.
“That reset a few years back,” Warheit said. “Right now we’re currently at 888 days without a lost-time injury.”
Bott said employer’s workers’ compensation rates from insurance companies can vary depending on a couple of factors.
“It’s called an experience rate,” Botts said. “The less injuries you have, the lower the rate.”
From 2024 to 2025, Bott said CID Associates paid about $56,000 in workers’ compensation premiums to its insurance company, which comes to about $1,000 per employee for the year based on its 56 employees.
Businesses then go through what is called a payroll audit, and insurance rates can go up or down depending on how many hours are worked among all employees.
“For example, we might have told our insurance company we are going to work, say 10,000 hours,” Bott said. “Then when the year is over, I have to pull the payroll and say we actually worked 12,000 hours. In that audit they will say we underestimated, then there would be an additional payment of X amount of dollars because it is based on what you actually did.”
Alternatively, if a company overestimates the amount of hours employees are going to work, a credit is applied to the next payment.
Alex Halper, senior vice president of government affairs for the Pennsylvania Chamber of Business and Industry said rates can vary by industry along with a company’s history of workplace injuries.
Halper said statewide data over the past few years shows the number of workplace injuries and workers’ compensation claims has been generally declining, which, in turn, is giving companies better rates and means less money is spent on insurance claims.
“I think that’s a product of employers investing significantly into workplace safety,” Halper said. “Jobs are just generally less dangerous than they used to be. However, the cost of individual claims continues to increase.”
Halper attributes the rising costs of individual claims in Pennsylvania to the state’s high prescription drug costs when compared to other states and the overprescribing of these drugs by doctors.
“While the vast majority of claims are administered without any issues, a handful create problems, drive up costs and impact everyone else,” Halper said. “We have seen issues where a particular prescription costs thousands of dollars more than the amount that would be paid if the individual was getting treatment through any other type of insurance.”
Larry Sommers, an agent with C.W. Howard Insurance in Butler, said when it comes to employees filing a claim with their employer, it is important to do an incident report almost immediately following an injury. He said having witnesses to the event will go a long way as well.
“One thing they should know is that if you do get hurt on the job, it is important to tell your employer so it can be turned into workers’ compensation,” Sommers said. “You don’t want to hide the injury.
“It makes it seem worse if you come in two weeks after the event and say two weeks ago I got hurt. Then a lot of times evidence has disappeared, and it becomes more suspicious and they might think you got hurt outside of work.”
Obtaining workers’ compensation for individuals who are self-employed used to be tough, Sommers said.
He said if a person opens a store, there are no laws telling them that they need to have workers’ compensation insurance, unless they hire other employees.
“If you have employees and have a corporation, you are automatically included (in the insurance plan) unless you exclude yourself,” Sommers said. “The problem was always for the smaller single-person operation trying to get workers’ comp on yourself. Most carriers wouldn’t do that, but now you have the option to get it through the State Workers’ Insurance Fund.”
In Pennsylvania, workers’ compensation is set to pay medical bills associated with the workplace injury through a neutral, third-party doctor, in addition to 66.6% of lost wages during the downtime of the employee.
Some occupations are different, such as law enforcement, whose workers will receive 100% of their lost wages.
Sommers said there often are instances where the employee could be 100% at fault for their workplace injury, but negligence doesn’t always exclude people from coverage.
“Coverage is really broad,” Sommers said. “Maybe they were warned and going against company policy, and that doesn’t play a factor as to whether there is coverage or not. Maybe they have to wear goggles or gloves and they weren’t doing that and they end up getting hurt. Well it’s still covered.”
“For the most part, I think workman’s compensation insurance is a business of honesty,” Sommers said. “Unless there are some hints of untruthfulness, for the most part they are just taking your word for most injuries.”
This article first appeared in the February edition of Butler County Business Matters.
