June 16, 2012
If You Don't Do This, It Can Cost You Big Money
If your company does not use a Post Offer Health Questionnaire and a Conditional Offer of Employment letter after you have made an offer of employment, you're setting your company up for potentially large losses.
In our last segment, we discussed how important the “Pre-Hire” process was to your bottom line relating to various “on-boarding” activities companies should consider when hiring new employees.
The second step in the “4P” plan is known as the “Post-Offer” step. At this stage, you should be asking yourself this question, “What should we be doing after we've offered someone a job?”
That question leads to another very important question: Does your company use a Post Offer Health Questionnaire and a Conditional Offer of Employment letter after you've made an offer of employment?
If your answer was no, please realize you're setting your company up for potentially large losses to your profits. A manufacturing company offered a job to a 34-year-old male without using these two documents which ended up costing them an additional $76,178 in insurance premiums and $2,158,742 in lost revenue.
By having an applicant sign a Conditional Offer of Employment letter before putting them on the job, you at least give yourself time to conduct your background checks that should be done on all applicants. You're putting your new hire on notice of the various procedures you conduct during your hiring process. In having the new hire complete a Medical Health Questionnaire, they are documenting their past medical history that should show any issues that might be a red flag that could keep them from fulfilling their job description safely. You may want to consider having your applicant take a “Physical Abilities Test” to ensure they are able to fulfill all the physical requirements of the job safely.
Let me explain the importance of why the use of the medical health questionnaire is so important. In 1961, an important case known as “Martin Company vs. Carpenter” set the precedent which later became statute in 1994 (in Florida). It gives your insurance company the ability to deny workers’ compensation benefits if an applicant commits fraud in their employment documentation and did not disclose material information.
In the case study above, the manufacturing company did not use the questionnaire which would have given the applicant the opportunity to share that he had back surgery 3 months prior, and due to his limitations, would have not qualified for the job and its physical requirements. The new employee re-injured his back which required more surgery which cost their company significant profits.
If an applicant were to commit fraud, the carrier has the ability to deny the claim. If the applicant were to disclose his previous injury, you’ll need to evaluate the situation to see if accommodations can be made or if they are physically able to do their job safely.
As another point, please make sure you keep an applicant’s medical questionnaire in a separate filing cabinet away from routine paperwork in order to be in compliance with HIPPA laws.
In our next post, we’ll look at the third part of the “4P” plan — yhe Pre-Claim process and its importance to your profitability.