There is a lot going on in this thread that I would like to comment on; I'll try to keep it short. I used to pay almost 100% of payroll, I was in the "assigned risk pool, so I have learned quite a bit about reducing the workers comp bill.
Your WC bill is mostly determined by what is called your "experienced modifier". This is a simple number that is associated with your company for insurance purposes by an organization called National Council on Comp. Ins. or NCCI (you can contact them at Midwestern Division, P.O. 19430 Springfield, IL 62794-9430 or call them at 1800-622-4123 cust serv)
All the insurance companies report their expenses to NCCI, so switching companies will not help change your experience mod.
They calculate the experienced mod with a terribly complex formula that involves comparing the predicted injury related expenses for your work categories and the actual expenses incurred by your insurance company. It also factors in how many claims you have had in addition to the total expenses incurred. Fortunately, a cap is set at $5000 for each claim, so a huge injury does not affect your experienced mod any more than a serious injury.
1. The best way to get a lower workers comp bill is to get your experience modifier down as low as possible. A few years back, my experience mod was 1.66, and my workers comp bill for tree work was almost 100% of payroll!
some methods to get your experience lower:
Pay small medical bills yourself. In Missouri, you are allowed to pay for all medical expenses less than $500 for the express purpose of reducing your experience mod. Trust me, guys, it is worth it!
Do what you can to reduce your insurance companies losses. this includes monitoring your employees medical claims very carefully, taking injured employees to a health provider that specializes in occupational health injuries, and making DAMN sure that injured employees are required to return to work under limited duty as soon as the doctor releases them.
2. One month prior to renewing your WC policy every year, ask your insurance broker for a copy of your "loss runs". Even if you do not do anything with your copy of your incurred expenses in the last year, it puts your broker on notice that you are an experienced buyer, and that you are shopping around for a better price! You will probably see an immediate reduction in your renewal fee.
3. Do what you can to reduce your payroll in the more expensive categories. As has been noted above, you can divide your payroll into different categories, each of which has different fee schedules. My company employees in these categories:
Class Code
Tree pruning: 0106
Salesmen 8742
Clerical 8810
Park NOC 9102
Street cleaning 9402
Each category has its own relative rate of insurance expense, so the more you keep each employee registered in a less expensive workers comp rates, the more money you will have at the end of the year. One good way of keeping a good record of the different categories of pay is to pay each employee a different scale for different duties. Obviously, the employees will always be making sure that you pay them as long as possible in the higher rates. I maintain different pay scales for snow removal (street cleaning), tree pruning, and Park NOC (landscaping).
4. Obviously, it pays huge rewards to your bottom line if you can eliminate insurance fraud. My experience rate was very high due to a series of fraudulent or exaggerated work comp claims. I have been hammering away at the workers comp issue or 10 or 15 years now, and I went from an experienced mod of 1.66, to my current rate of .94 and an ARAP rate of 1.00 [your ARAP is another number that magically gets multiplied by your insurance company to make the bill bigger. Generally, the higher your experience mod, the higher your ARAP]
I hope all of this text helps somebody save some money, because I really, REALLY hate insurance companies, and workers comp in particular.
