Higher workers’ compensation costs possible with benefit cuts

On Behalf of | Oct 22, 2014 | Workers' Compensation

Although health insurance is important to New York employees, some corporate giants – such as Wal-Mart, Target and Walgreens – are trimming their budgets by cutting out medical benefits for part-time workers. While this may seem like an effective cost-cutting measure, experts worry that the lack of benefits will lead to a higher rate of workers compensation claims.

Healthcare costs continue to rise every year. These increases eat a company’s profit and affect the bottom line. Many large retailers have tens of thousands of part-time workers and it can be financially impossible to pay for medical insurance for all of them.

But, at the same time, these workers are liability issues for employers. Part-time employees typically receive less safety training than their full-time counterparts. This means that are more prone to workplace accidents and subsequent workers compensation claims. As a result, the money that the company thought it would have saved by foregoing coverage for part-timers is being spent on workers compensation claims.

Another issue is fraud. Many part-timers want to work their way up to become full-time employees. When they learn that dream may not come true due to budget cuts, they may retaliate by injuring themselves on the job.

Many employees rely on employer-covered health insurance to pay for medical expenses. It can seem unfair when employees get their hours cut or are not allowed to work full-time because employers want to make cuts. This action is legal, but it could come with financial consequences. Employers should understand how workplace injuries are related and take the proper steps to ensure training and safety.

Source: Business Insurance, “Trend of cutting benefits for part-time workers may add to workers comp costs,” Sheena Harrison, Oct. 12, 2014