What Makes Workers’ Compensation So Complex?

Many employers find managing their workers’ compensation program to be a frustrating and confusing task. The process can be especially difficult for temporary staffing firms, which tend to have large, dispersed workforces and a wide variety of hazards to account for in their policies. These are some of the reasons why workers’ compensation is so complex:

The wide variety of required benefits.

If workers’ comp was only required to cover basic medical treatments for predictable kinds of injuries, it might have been a simpler system. But health care and employment are both difficult topics to capture in simple ways. Mandated coverage can differ from state to state. In California employers are required to provide these benefits:

  • Medical care, including medically necessary prescriptions and other forms of intervention.
  • Temporary disability benefits, such as wage replacement.
  • Permanent disability benefits, which may include wage replacement as well as other benefits.
  • Death benefits payable to an employee’s spouse and children in the event an employee dies from injuries sustained on the job.
  • Supplemental benefits to assist employees who are displaced from their jobs as a result of their injuries.

Processing claims is technical.

Some workers’ compensation claims are straightforward. A sprained ankle or a dislocated finger might involve simple treatments and little or no downtime for the patient. But many claims are tricky. If an injury entitles an employee to disability benefits or leads to medical complications, the claims process may go on for some time. Paperwork needs to be completed accurately and on time. Claims need to be coded correctly to avoid delays in benefits and misunderstandings with insurance providers. All of these issues make it necessary for an employer to dedicate resources to developing expertise on the workers’ compensation system, or hiring an outside firm to handle some or all of the claims management process.

Managing costs takes a comprehensive effort.

Workers’ compensation insurance can be a significant expense for temporary staffing firms. If the cost of a workers’ comp program is not controlled with care, it can render a business unprofitable and unsustainable. Bringing costs down requires a comprehensive risk management plan that takes into consideration the full range of hazards faced by employees. In the case of temporary staffing firms, that can mean an examination of client work sites, implementation of an employee training program, and other steps.

At Gunnin, we specialize in helping clients in the temporary staffing industry examine and improve their risk management programs, and make their workers’ compensation insurance program a source of strength rather than a burden. To learn how we can help your business, contact us today.