Connecticut is currently trying to expand its Workers' Comp program to include coverage for mental and emotional distress after an employee witnesses a violent event at the workplace, according to a report by Insurance Business America. If the two proposed laws pass, that would mean employees can collect Workers' Compensation Insurance benefits after witnessing…
- Another person maimed or killed in the workplace.
- Another person maimed or killed by another person at work.
At first blush, the expansion seems like a win-win. In Connecticut, business owners are already required to offer Workers' Compensation Insurance, so why not have coverage that accounts for more possible work ailments? But some businesses are resistant to the change. Let's explore both sides of the proposal.
The Drawback: Possibly Higher Workers' Comp Premiums
In some high-risk industries, Workers' Comp rates are already considerable. As you may recall, Workers' Comp rates are based on several factors, such as…
- Your payroll and number of employees.
- Your business's experience modification factor.
- Your employees' work codes.
Experience modification factors look at your actual losses compared to other businesses in your industry. Here's how they work: if your industry has a higher rate of Workers' Comp claims, your premiums may be higher for the first three years. After that, you may qualify for discounts if you have a clean claims history. The inverse is also true: if you have more Workers' Comp claims than the industry average, you can expect to pay higher rates for your coverage.
Your employees' work codes are not subject to change. Different professions come with different levels of risk, which affects insurance rates. Employees who work in higher risk jobs (e.g., construction) may cost more to insure than those who do clerical work. (Learn more about that here: "What Goes into a Workers' Compensation Insurance Quote for Small Businesses?")
So what does this have to do with those Connecticut laws we were just discussing? Simply this: some businesses are already paying high Workers' Comp rates because of the nature of their work. Worker injuries may be an unfortunate reality for construction professionals, firefighters, and EMTs. If Workers' Comp Insurance must also pay for emotional and mental duress, these businesses can expect even more claims on their policies. Remember, the more claims made on a policy, the higher your rates may be.
With that in mind, you can see why The Association of Ambulance Providers is opposed to Connecticut's proposed Workers' Comp changes. The argument is that EMTs see a lot of accidents and trauma on the job. If employees can make Workers' Comp claims over the emotional distress that comes with their work, ambulance provider companies may pay even more for their coverage.
The Perks: Healthy, Productive Employees
Though Connecticut's changes may increase Workers' Comp costs for certain businesses, the long-term benefits of the change can be substantial in terms of…
- Employee health.
- Talent retention.
It goes without saying that employees who have experienced emotional trauma on the job may have a difficult time doing their work. With the appropriate treatment and therapy that Workers' Comp could feasibly pay for, however, those employees may receive the care they need to get back to work quicker and perform effectively.
Additionally, employees who suffer from depression and stress are not as productive as their contented colleagues. To put a number on it, a joint study by the Wall Street Journal and the iOpener Institute found that happy workers achieve their goals 31 percent more often and are 36 percent more motivated. If your business is able to help employees get the help they need to deal with traumatic events, their good mental health may literally pay off.
Lastly, employees devote much of their time and talent to their employers. Having coverage that helps them cope with unexpected violence at work can help build trust, which is an essential ingredient to keeping talented employees.