How to deter substance abuse, trim workers’ compensation premiums

Statistics from the National Council on Compensation Insurance show that 38 to 50 percent of all workers’ compensation claims are related to the use of alcohol or drugs in the workplace. According to the U.S. Small Business Association, on average, employees with inappropriate substance use cost their employers $7,000 annually. Many Ohio businesses are turning to the Bureau of Workers’ Compensation’s (BWC) Drug Free Safety Program (DFSP) for assistance to address this issue and reduce their annual premium.

“A well-designed DFSP will help an employer deter substance use on the job, create a safer workplace and impact the bottom line by providing a discount to the employer’s premium,” says Cassy Taylor, senior risk services analyst at CompManagement, Inc.

Smart Business spoke with Taylor about the main components of Ohio’s DFSP.

What discount levels are available and when are enrollment deadlines?

DFSP offers basic and advanced discount levels that provide a 4 and 7 percent discount, respectively. Public employers wishing to participate may start their program Jan. 1 of each year. However, private employers have the opportunity to begin on either Jan. 1 or July 1. Applications for programs beginning Jan. 1 are due to the BWC by the last business day of October while those starting July 1 must submit their applications by the last business day of April.

What components does a DFSP require?

Basic and advanced levels of DFSP require:

  • Annual reporting.
  • Annual online safety assessment.
  • Accident analysis training for supervisors.
  • Use of online accident analysis on the BWC website for each accident/claim.
  • A written policy in place.
  • A minimum of one hour annual employee training.
  • A minimum of two hours first year and one hour refresher supervisor training.
  • Pre-employment, post-accident, reasonable suspicion and return to duty follow-up drug/alcohol testing.
  • A cut off level of .04 blood alcohol content.
  • Zero tolerance (basic level only).
  • List of referrals for employee assistance.

In addition, the advanced level program also requires 15 percent random drug and alcohol testing, a second chance agreement for employees, a substance assessment for employee assistance and an annual safety action plan.

How does Ohio’s rebuttable presumption law factor in?  

The rebuttable presumption law puts the burden on employees to prove that alcohol or drugs found in their system were not the proximate cause of a workplace injury. It also allows employers to ask for a disallowance of a workers’ compensation claim for an employee who tests positive on a qualifying chemical test. The law also is applied if an injured employee refuses a test. For a workers’ compensation claim to be allowed the injured employee must prove that being intoxicated by alcohol or under the influence of any controlled substance not prescribed by the employee’s physician was not a factor in the accident that caused the injury. Employers must post a written notice provided by the BWC to alert employees that they may not be eligible for workers’ compensation benefits if they are injured while intoxicated or under the influence of a controlled substance.   

What impact would the DFSP have on a midsize company’s premium?

Assuming the eligibility and program participation requirements are met, a midsize service company could expect the following in annual premium savings by implementing the advanced level program, assuming the employer is participating in no other alternative rating programs:

  • Payroll — $3,990,000.    
  • Individual discount — 16 percent.
  • Individual premium — $14,683.
  • 7 percent advanced level DFSP discount — $700*.

*Based on pure premium, which does not include assessments for DWRF and administrative costs for operation of BWC/IC.

Savings reflected above do not include the additional savings that can be realized by also participating in programs compatible with DFSP such as Group Rating, Destination Excellence, Small Deductible, and Safety Council to name a few. Always have your third-party administrator conduct a feasibility study to evaluate the best savings options available for your organization.

Cassy Taylor is senior risk services analyst at CompManagement, Inc. Reach her at (800) 825-6755, ext. 65434 or [email protected].

Insights Workers’ Compensation is brought to you by CompManagement, Inc.