There's a big bill coming from the Ohio Bureau of Workers' Comp-one that could be devastating to any employer not expecting it. The January workers' comp premium bill, unlike the last three, will not reflect any dividend credits nor will it include another rebate check.
Marty Herf, chief risk officer with the bureau, says he is concerned that employers "have been lulled into a false sense of reality with these credits and give-backs" and that "many employers we have spoken with have no realization what they will be facing with the January bill."
Those bills could be as much as 75 percent higher, because employers have been paying roughly 25 percent of their normal premiums thanks to those credits and rebates.
There is one way to help soften the blow: the bureau's Drug-Free Workplace Program. By operating drug-free, qualifying employers can receive premium discounts of either 6 percent or 12 percent the first year, up to a maximum discount of 79 percent over the course of five years. An employer who pays $50,000 per year in premiums, then, could save as much as $39,500 through drug-free program discounts. In fact, the bureau's program gives employers the discount up front as an incentive to motivate them and give them cash resources to develop a policy, administer testing and provide assistance.
The bureau is convinced that these discounts are actuarially justified because they have studied the facts and the figures: 47 percent of workplace injuries, 40 percent of workplace deaths, and 38 percent to 51 percent of workers' comp claims in America have alcohol and/or other drugs involved.
Many familiar companies have instituted programs matching the one outlined in the bureau requirements:
- Wal-Mart reduced accidents 10 to 15 percent each month for the first 18 months after starting its program.
- Tropicana reduced its accident rate by 55.3 percent.
- AT&T reduced its accident rate by 81 percent.
It takes money, time and a reason for employers to establish drug-free workplaces. But once they do, they will increase safety, lessen the frequency and severity of accidents and add to their protection against the liability that results from substance abusing workers.
Each substance abuser costs an employer an average of $7,000 in accidents, as well as lost productivity, absenteeism and tardiness, increased use of medical benefits and theft.
In relation to this problem, small employers are at particular risk, as these employers are less likely to establish policies and practices that will adequately protect them from losses associated with substance abuse. The number of substance abusers employed is rising (from 67 percent in 1992 to 74 percent in 1997) and the number of employers with more than 250 employees operating drug-free has also increased-to about 90 percent
Therefore, any employer who is unaware and/or unprotected can suffer the "trickle-down" effect of abusers looking for work who have been turned away from other employers.
The bottom line: Any employer who doesn't have a drug-free workplace program, has a substance abuse problem.
To protect against these drains and qualify for the bureau's drug-free workplace discount, an employer must have a program with five active components:
- A written substance abuse policy with operational guidelines and practices.
- Employee awareness and education.
- Supervisor training.
- Alcohol and drug testing (as appropriate).
- A plan for employee assistance.
An employer can get technical guidance in setting up program elements from his corporate attorney, from the bureau, from the Internet or from not-for-profit consortiums such as the Business Against Substance Abuse Coalition.
To make sure all employers can take maximum advantage of the bureau's drug-free workplace discount, special rates can often be negotiated for associations, trade groups and chambers of commerce.
January's workers' comp bill will give employers the motivation and incentive they need to take advantage of these resources and secure their workplaces against this insidious corporate raider-substance abuse.
Dee Mason is the founder of Working Partners and the Business Against Substance Abuse Coalition.