ADVANTAGES OF REHABILITATION

Without a well-thought-out rehabilitation program, an employer's workers' compensation costs can spiral out of control. Although insurance carriers in most states are required to set up programs to rehabilitate workers, it is a mistake to leave rehabilitation up to the carrier. Active participation by the employer is vital to the success of any rehabilitation program.

Statistically, the longer a worker stays away from work, the less likely he or she is to return to the workplace. Therefore, the employer must take charge of the rehabilitation and return to work return to work process immediately after an employee has been injured on the job. Sitting at home, the employee may begin to make the illness or injury the focus of life, concentrating on the slightest ache or pain. After a time, the employee may honestly believe that a return to work is impossible.

An employee's mental attitude may become increasingly negative the longer he or she has been unemployed. As the days on disability lengthen into weeks, employees may begin to feel useless to the company or afraid they will be incapable of doing their job. Additionally, employees on disability leave have plenty of time to nurture grudges against the company or its management.

Cost Savings

Reduction in wage-loss benefits. While many employers balk at the expense of the best rehabilitation facilities, they have proven to be cost-effective. An employee's speedy return to work may save money the employer would otherwise spend on wage-loss benefits. In most states, the job an employee takes upon returning to work doesn't have to be the same job the employee had at the time of injury (but must be within the employee's vocational and physical abilities). Because wage-loss benefits are based on the difference between the employee's before- and after-injury wages, any payment the worker receives from the new job will reduce the benefits the employer or insurer must pay.

For example, an injured machine tool assembler who receives a wage-loss benefit of $500 per week becomes a supply clerk at a salary of $350 per week. The employer or its insurer must pay only $150 rather than $500. If the assembler's new job had paid about the same as her old job, the employer would have been required to pay no wage-loss benefits because there was no reduction in her wages.

If your company's workers' compensation insurance premium is calculated according to the "experience rating" method, then any reduction in your workers' compensation loss experience (amount of benefits paid) will be reflected in a reduction of your experience premiums. Today, all but the smallest employers can usually take advantage of these discounts. Of course, a self-insured employer is also going to want to reduce losses since loss expenses are coming right out of the employer's pocket.

Reduction in unemployment period. If an employer refuses to hire back an injured worker, other companies may not be interested in hiring the employee either. Potential new employers may be reluctant to hire a worker if they know there is a pending workers' compensation claim. Particularly in areas of high unemployment or periods of economic recession, the employee who is unable to find a job may become a "hard-core" long-term disability case who will sit at home and collect benefits.

In the past, employers would use work-related injuries as an excuse to get rid of unwanted employees. Today it is simply too expensive for an employer to pay the compensation claim in the long run. Worse yet, an employer who gets rid of an injured worker may cause a lot of hard feelings among other employees.

If you don't have your own rehab program, the court will make up one for you. The peril of not coming forward with your own rehabilitation program when an employee gets hurt on the job is illustrated by a decision of a Nebraska Court of Appeals in which the court endorsed a recommendation by a state counselor that an injured employee enter a training course of adult basic education and English as a foreign language. When the employer objected to being required to pay for the courses, the court of appeals responded that the employer had not provided the workers' compensation court with any alternate job placement or training plan within the time specified by the court.

Other cost savings. By doing all they can to show employees they are valuable to the company, employers give their workers the incentive to want to return to work. By contrast, employers that don't establish a rehabilitation and return to work program as part of their benefit package may be in store for long periods of benefit payments or litigation.

Good rehabilitation and return to work programs make good sense because they allow employers to retain experienced employees. Most states require an employer or its insurance carrier to provide these services. When employers voluntarily provide rehabilitation, there may be a reduction in the number of claims disputes. Finally, companies gain a lot in employee goodwill when employees return to work faster at their full salaries.

Reprinted with permission. © CCH