Exploring Rate-Based vs. Behavior-Based Safety Incentive Programs

There has been a lot of media coverage about the effectiveness of safety incentive programs over the past few years. Indeed, these programs, which were initially seen as measures that could potentially reduce the number of work-related injuries each year, are sometimes viewed as a tool that employers use to discourage their personnel from reporting work accidents. This article compares the two types of safety incentive programs with tips for best practices.

Let's compare Rate-Based vs. Behavior-Based Safety Incentive Programs

In a rate-based safety incentive program, employees get rewarded for reporting a small number of injuries contracted at work.

While in a behavior-based safety incentive program, rewards are tied to the adoption of safe behaviors. This means that if it’s proven that you applied all the necessary safety measures when performing the duty that led to your injury, or if you participate in training programs, you’ll get rewarded.

From the employer’s perspective, either program is good because it gives some leverage to negotiate lower premiums with the insurance company. 

Do rate-based safety incentive programs lead to underreporting?

This is a debate that is currently raging between advocates and opponents of safety incentive programs. The focus of the debate is on the rate-based programs, which are said to promote the non-reporting of work-related injuries. Consider a worker who managed to keep their rate of injuries/illnesses low for months and is only a few weeks away from being able to claim their reward. If they get injured during those weeks, they’ll feel mentally pressured not to file any reports by fear of seeing their targeted reward vanish.

And rate-based safety programs may be a direct violation of OSHA rules. Note this from osha.org and the U.S. Department of Labor: "Incentive programs that discourage employees from reporting their injuries are problematic because, under section 11(c), an employer may not "in any manner discriminate" against an employee because the employee exercises a protected right, such as the right to report an injury."

But which type of safety incentive program is better?

Proper application of a well planned safety incentive program guarantees that employers will reap the benefits. Ideally, employers should move away from rate-based programs, and encourage the adoption of safe behaviors instead. Not just because of OSHA, but also a study from DuPont revealed that behavior-based safety programs are effective in 87% of the companies it surveyed.

A safety program should be behavior-based rather than being injury-rate-based. It means employers should provide incentives to workers practicing safe operating procedures and practices instead of incentivizing schemes based on number of accidents.
— ProcessMap Corporation

To further succeed in your safety plans, we also recommend praising and recognizing employees in front of peers to acknowledge their safe behavior and encourage others to do the same. Foster a culture of "safety first" and be willing to compromise efficiency if needed in the name of safety.

As mentioned, we've found that monetary rewards for unreported injuries may violate OSHA policies and they also destroy employee morale.

Instead, we recommend incentives that promote worker participation in safety-related activities, such as identifying hazards or participating in investigations of injuries, incidents or "near misses."

As you might know, insurers conduct their own investigation when work comp claims are submitted. If they determine that the worker did everything right and the company had safety training and programs in place to help, they’ll likely not consider increasing the premiums. All they want to see is that proper safety measures are adopted. 

Please contact us for more information on making your safety incentive program a success!

Why Wellness Programs Can Lower Healthcare Costs

Obesity and smoking are two major drivers of health insurance premiums in the United States. Finding a way to mitigate or address them would result in thousands of dollars saved each year. This is precisely what a growing number of companies are trying to do in the country by teaming up with wellness services. Employers are taking measures to encourage their workers to take part in wellness programs, and pledging rewards to those who accept to try to adopt a healthier lifestyle. This article explains how wellness programs can help to lower your health care costs.

The Affordable Care Act is now in effect

As you might know, Obamacare went into full force on January 1st for all companies featuring fewer than 100 full-time personnel. Although it was severely criticized by employers, it’s still a legislation by which all concerned entities must abide. Many companies are still struggling to juggle with the repercussions of this law on their profits, and intending to pay the excise tax rather than providing coverage to all their workers. Yet, this isn’t the optimal solution since Obamacare can have greater financial implications on the companies that opt out than on those that embrace it. The optimal solution is the adoption of wellness programs.

Wellness programs are the way to go...

If your employees get healthier, they’ll cut:

  • The number of costly visits to the doctor’s office
  • The quantity of medications purchased
  • The likelihood that they might be hospitalized
  • The number of sick days they use and miss work

Because of all these, your employees will see their life expectancy increase, which means that they’ll be able to remain in the job market longer and earn more money. It's a win-win-win trifecta!

How to encourage employee participation?

As mentioned earlier, you need to develop a rewards program for the participants. One great example would be to redistribute to your workers a portion of the savings generated via the lower insurance costs paid to the company’s insurer. Insurers view wellness programs as contributors to good health, and are willing to charge less for their coverage costs as a result. At the end of the year, a participating worker will end up with several hundreds of dollars extra on their annual income.

Please contact us for more information on how to offer incentive programs that ultimately help you save money on health care costs.