Offering Group Health Can Affect Workers’ Comp Costs

Employers who provide group health insurance and wellness programs to their employees tend to have lower overall workers’ compensation costs.

While the programs are separate, employees who have access to preventive care, chronic disease management and wellness resources are often healthier when an injury occurs. This may lead to fewer complications, faster recoveries and lower claim costs.

Studies have found that an employee’s overall health can affect how quickly they recover from a workplace injury. Conditions such as diabetes, hypertension, obesity, depression and substance-use disorders can complicate treatment, slow healing and extend the time an employee remains away from work. Consider the following:

• The National Council on Compensation Insurance has found that workers’ compensation claims involving comorbidities generate roughly twice the medical costs of similar claims without those conditions.
• Harbor Health Systems, after reviewing over 7,000 workers’ compensation claims, found that underlying health conditions were associated with longer recovery, more temporary disability days, increased litigation and higher surgery rates.

How health insurance affects workers’ comp costs

Employees with health insurance are generally more likely to schedule annual checkups, undergo preventive screenings, fill prescriptions and seek treatment when medical issues first arise.

That access to care may reduce the severity of chronic conditions before they complicate a workplace injury. Claims involving underlying medical conditions frequently require additional treatment, longer disability periods and more coordination among physicians.

Those factors can increase the likelihood of disputes over treatment, causation or return-to-work decisions, which may contribute to higher litigation costs.

On the other hand, a worker whose diabetes or hypertension is well managed may recover more quickly than someone whose condition has gone untreated.

Access to health insurance may also reduce situations in which employees delay seeking treatment because of cost concerns. And when employees have health coverage for non-work-related illnesses and injuries, there may be less financial pressure to characterize a nonoccupational medical condition as work-related simply to obtain care.

How wellness programs fit in

Employee wellness programs do more than improve overall health. They may also improve workplace safety, which in turn affects workers’ comp claims and costs.

Programs that encourage physical activity, healthy eating, tobacco cessation, stress management and behavioral health support can improve employees’ overall health. Healthy workers are often more aware of their actions and may recover more quickly from workplace injuries.

Telehealth services, employee assistance programs and mental health resources may help employees address health concerns before they become more serious.

Fatigue is another consideration. Employees who are chronically tired, stressed or dealing with unmanaged medical conditions may be more likely to lose focus or make mistakes on the job. Wellness initiatives that promote better sleep, stress reduction and overall health may improve alertness and reduce accident risk.

An investment beyond employee benefits

Many employers view health insurance primarily as a recruitment and retention tool, but it’s really a crucial part of a broader workforce risk management strategy.

Over time, healthier employees may experience fewer workplace injuries, recover more efficiently when accidents occur and generate less costly workers’ compensation claims.