A Model for Determining the Direct Costs of Workers Compensation in a Self-Insured Company

The purpose of this study was to examine the total direct costs of occupational injuries as they relate to workers compensation allocations within a self-insured firm. Through the use of a model, this study provides financial impact information for safety professionals by defining the total direct costs of occupational injuries. The investigator constructed a model which traced actual workers compensation allocations over a five year period at a division of Hewlett-Packard in Corvallis, Oregon. The objective of this model was to compare actual workers compensation cost history with that of adjusted workers compensation cost data to determine the total direct costs that occupational injuries have on the division's workers compensation cost allocations. This study indicated that injuries produce cost impacts to divisions well beyond the injury compensation costs reported by insurance carrier payment summaries. The study at this specific Hewlett-Packard division in Oregon indicated total costs at 1.7 to 1.9 times the actual cost of workers compensation reimbursements. Redacted for privacy This study supports the need to continue research efforts that will further refine the identification of total injury costs and the impact these losses have on the business performance of a company