I recently read an ARTICLE published by the Federal Times regarding the Workers Compensation costs associated with the U.S. Postal Service. According to the article, an Inspector General inquiry has uncovered nearly $335M in excess Workers Compensation costs the Postal Service is spending as compared to its Private Sector counterparts.
One of the biggest issues is that U.S. Postal Service employees receiving workers compensation benefits continue to receive those benefits beyond their normal retirement age. At the time of the inquiry cited in the article, approximately 16,200 Postal employees were receiving workers compensation benefits and nearly 6% of those individuals were 80 years of age or older.
There is no financial incentive for many aging postal employees to transition from receiving Workers Compensation benefits to retirement benefits at retirement age. The reason is due to the fact that the workers compensation benefits are tax free to the recipient, and in many cases equates to a significantly higher take-home pay then those employees would receive if they were to return to work or begin receiving retirement benefits.
Another considerable over-expenditure is the fact that postal employees receive full reimbursement for brand named drugs while receiving workers compensation benefits, while their private sector counterparts do not. The inquiry noted that by simply requiring benefit recipients to utilize generic brand drugs, the U.S. Postal Service could save $9M or more per year.
It appears that all the changes that individual states have made to enact Workers Compensation Reform have fallen on deaf ears when it comes to the government, as can be understood by the investigation cited in the article.
The up-side to an article like this is to show that by focusing on active Workers Compensation Claims Management, Experience Modification Forecasting and Analysis, and conscientious Safety and Compliance programs; it is vividly possible to Reduce Your Workers Compensation Costs.
It is just a shame that some of our largest governmental employers are not able to lead by example.
For information on how your business can benefit from lower Workers Compensation rate, why not Talk To The Experts at GDI Insurance Agency by calling 888-991-2929.
Matthew Davis MBA, AAI