Health risk status influences employee compensation costs
To investigate the association between employee health risk status and workers' compensation costs.
3,338 long-term employees of the Xerox Corporation (US), 943 of whom had completed a health risk appraisal, 2,395 did not.
Data from the health risk appraisal (HRA) were used to categorise individuals as i) low (0-2 risk factors), ii) medium (3-4 risk factors) or iii) high risk (≥5 risk factors), and compensation costs between 1996 and 1999 were compared for each risk group.
- As risk status increased, so did the proportion of employees who had made compensation claims; 4.9% of low-risk, 5.4% of medium-risk, and 8.2% of high-risk employees.
- Compensation costs increased with rising health risk status from an average of $2,178 per person in the low-risk group, to $15,162 per person in the high-risk group.
- Overall, employees who had completed a health risk appraisal had lower total workers' compensation costs ($6,506) than nonparticipants ($9,482).
What does this mean?
The strategies that have been used to reduce medical care costs could also be used to reduce employee compensation costs.