Ouch! Don't let workers' comp costs squeeze your bottom line.

• Author: Butler, Don

Workers' compensation laws and regulations increase in number and complexity each year. All too often, employers simply rely on their insurance companies to handle any cases and keep workers' comp costs from skyrocketing. While this may work most of the time, companies must do more than sit on the sidelines. This is especially true given the rapidly rising premiums that employers are paying for workers' compensation insurance.

In the first quarter of 2002-the most recent statistics available--employers on average paid 21 percent more for workers' comp coverage than they did a year earlier, according to the Workers' Compensation Insurance Rating Bureau of California, a trade group that analyzes data and recommends pure premium rates to the state Department of Insurance.

During that period, California employers paid $3.8 billion in premiums for workers' comp insurance. The bill for the year was $11.9 billion and California is already on track to exceed that in 2003.

And, thanks to Assembly Bill 749, higher benefits will be applied to claims starting Jan. 1. By the time the bill's fully implemented in 2006, the bill will increase employers' costs by 22.8 percent.

A FEW HIGHLIGHTS OF AB 749

* Maximum workers' compensation benefits for temporarily and permanently disabled workers will increase 20 percent--from $490 to $602 per week--beginning Jan. 1.

* Disabled benefits will increase to $728 per week in 2004, and $840 per week in 2005, and annually thereafter based on cost-of-living adjustments in the state's average weekly wage.

* Benefits for workers who are permanently partially disabled will see an increase from the current rate of $170 per week to $230 by 2006 (the rate increases gradually each year in the interim).

Despite the dire statistics, there are steps--many inexpensive--that employers can take to minimize workers' compensation costs. Among those steps:

1. Make job site safety a priority every day. A safe workplace can lower your claims cost by preventing accidents in the first place. Ensuring job safety generally is an inexpensive investment compared with what your costs would be following an accident.

   For example, if some of your employees must lift or move heavy objects, make sure they have the proper equipment to do so. Or, make sure hallways and areas surrounding offices and cubicles are open and free of items that could hinder or impede walking traffic.

   For more information on how to make your workplace safe, visit the...