According to the 2014 Annual Report by the Georgia State Board of Workers’ Compensation, there were 31,977 total indemnity claims in 2013. The total amount paid out for these claims was $796,560,196. Additionally, the total amount of medical paid on indemnity claims was $772,227,221. While these numbers are of course very large, they reflect only a portion of the actual costs incurred by Workers’ Compensation claims and injuries. In fact, it can be hard to compile statistics that accurately reflect all of the costs faced by employers when a Workers’ Compensation claim drags on. Put another way, indemnity and medical benefits often represent only the “tip of the iceberg” when it comes to the total expenses actually incurred by employers.
While both indemnity and medical expenses can be considerable, it is important to not turn a blind eye to some of the other expenses that can result from a prolonged claim. Here is where the Iceberg Principle comes in. The Iceberg Principle refers to only seeing a small amount of information when, in actuality, the bulk of the information lies below the surface. In the context of Georgia Workers’ Compensation law, the obvious expenses incurred by employers are the direct expenses associated with a claim. Things such as medical examinations, physical therapy, mileage reimbursements, medical testing, and prescription reimbursements can add up quickly.
Below the tip of the iceberg, there exist these other, more indirect costs. These hidden costs may include; disruptions in productivity; staff rescheduling; accident investigations; time lost due to new employee training; costs associated with hiring replacement employees; increased insurance premiums; and in a worst case scenario, the ripple effect that can occur when other employee’s perceive a free ride on the gravy train. The longer a case drags on, the more likely that these costs may add up. Thus, ignoring these expenses can be quite harmful.
What the Iceberg Principle tells us is that an effective strategy for mitigating potential exposure requires a skilled appraisal of your present situation. In fact, a thorough analysis of your potential exposure can be critical to avoiding as many of these expenses as possible. At the core of such a strategy is the quick and efficient resolution of claims. The quicker we can work to get an employee back on the job or resolve their claim, the more likely many of these costs can be avoided, and the less likely it will be that a Workers’ Compensation claim will effect your bottom line.