Workers Comp Makeover: Pay-as-you-go, digitization, loss control

Workers’ compensation (WC) claims can significantly dent a business’s productivity and margins. Out-of-work employees coerce company leaders to manage with inadequate workforces while training replacement staff and augmenting employee safety. The average cost for a WC claim is $41,003.

A leading WC risk is ergonomics-based incidents, including manual material handling and repetitive upper extremity movements that cause musculoskeletal disorders (MSDs). MSDs are the most frequent and severe workplace injury type. In the US, nearly 2 million workers suffer from MSDs annually, causing 30% of all WC costs. Employers spend as much as $20 billion a year on direct costs for MSD-related WC. Those with no remedies around poor ergonomics fail to protect their employees and bottom line, from this threat.

Emerging technologies, from water sensors to telematics, promise a broad, positive impact on insurance risk reduction. Many companies have seen the advantages of automation powered by AI and are reaping the benefits this technology offers in reducing workplace injuries.

Examples of advanced technologies to mitigate risk in the workplace include:

• Ergonomic wearable sensors to track employee’s movements throughout a job task.
• Shifting focus from manual observation to analysis through virtual, real-time data .
• Sensors and video amplifying data available for businesses to reduce the potential risks.

Since the start of COVID-19, the WC industry has undergone significant technology transformation. Payers have had to navigate an onslaught of new challenges, from changing regulations to unprecedented staffing shortages. Many companies continue to chase opportunities to increase automation. The top findings from a recent survey are:

• Telemedicine & Electronic Payments/Billing are the top technologies invested in throughout 2021.
• Mobile Apps for Injured Employee Communication are the main focus, with the goal of improving communication and the return-to-work process.

While most of WC has been focused on using technology to solve immediate issues from the COVID-19 pandemic, going forward, the industry is turning its attention to improve the injured employee experience, keeping claims moving forward and allowing employees to return-to-work faster. Using technology to improve communication with injured employees can deliver major benefits including:

• Improved adjuster productivity by ensuring they have access to information they need in a timely manner.
• Facilitating more engagement with injured employees, simplifying administrative processes, providing a channel to communicate with case managers and more.
• Providing pertinent information, such as assisting injured employees in getting prescriptions filled in a timely manner.

For frontline workers in the industrial workforce, the Internet of Things and wearable technology are being incorporated into WC policies, that curtail claims from happening in the first place.  Insurance carrier Nationwide has partnered with Kinetic Insurance, a wearable device company, to deploy wearables for workers compensation insurance.

NEXT Insurance offers a pay-as-you-go offering that provides small businesses the option to bundle purchases by using Stripe Financial Connections to link a customer’s bank account, thus making payments frictionless. It pulls data from over two hundred payroll partners and integrates directly into providers like Intuit QuickBooks, Gusto and Square. Small business owners get access to a variety of post-purchase benefits for efficient policy servicing.

Pay-as-you-go offers valuable benefits that can help better manage coverage, avoid risk, and stay compliant. Cash flow payments are spread out, improving budgeting and cash flow. Minimal down payments help by keeping money interest earning. Comprehensive reports are provided during pay periods to show gross wages, exempt wages, and premium totals for each employee. When premiums are based on actual payroll figures, audit non-compliances are passe.

Market research projects that the WC sector will grow by $33.73 billion by 2025. As that growth materializes, the intuitiveness of solutions based on sophisticated behavior based safety models, will be key to success. Such solutions can be expected to drive down accidents and fatalities towards the ultimate goal: near-zero.

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