A Texas county is proving that employers can reduce their workers' compensation costs by implementing safety measures. Six years ago, a record $2.87 million workers' compensation insurance premium in Nueces County, Texas, contributed to a $3.6 million budget deficit. The deficit triggered a series of layoffs and forced the county to get serious about safety. Since then, the county has actively worked to reduced it workers' comp costs, not by denying benefits to workers, but by encouraging everyone to work safer and by being upfront about the hidden costs of workplace injuries.In Texas, workers' comp premiums are administered through the nonprofit Texas Association of Counties. About 200 Texas counties pool their resources and pay an annual premium based on their individual history of on-the-job injuries during the previous three years. As Nueces County has reduced the number of on-the-job injuries and the length of lost-time injuries, its workers' compensation premiums have dropped.
The county has mandatory safety meetings for employees, and has created a return-to-work program that allows people who have been hurt to return to work sooner, often in a light-duty capacity. In addition, the county has been very transparent when discussing the impact of workers' compensation costs on things such as pay raises. The result? Workers' compensation premiums for the county have dropped every year since 2002, including by $100,000 this year.
This year, Nueces County's premium has dropped to $655,694, a decrease of more than $2 million since 2002, and a 13.4-percent reduction from a $757,575 premium in 2007.
"Few Texas counties have implemented and managed their workplace safety as effectively as Nueces County," said Ernesto Galindo, a safety specialist with the Texas Association of Counties. "When other counties want to know what works, we point to the efforts of Nueces County."
Companies could learn something from this Texas county's example. Often, employers push workers' compensation reform within their state legislatures as a way of reducing their workers' comp costs. That's the easy way out, and it often occurs at the expense of injured workers. What companies they should really be doing is reforming their own internal processes, including safety training and return-to-work programs that allow injured workers to take on different job duties while they recover from their injuries. The best way for a company to reduce what it spends on workers' compensation is by preventing workplace injuries before they happen.
