Brandon Putnam
Vice President, Business Insurance
When an employee gets injured at work, two pressures immediately come into play. One is recovery. The other is cost. How quickly and safely the worker returns can influence whether a claim is contained or escalates into mounting expenses and premium increases that may affect a company for years.
That’s where a well-structured return-to-work (RTW) process can make a difference. It helps employees reintegrate sooner while helping contain claim severity and keeping premiums in check—a mutually beneficial outcome.
As business leaders look for ways to reduce comp costs and safeguard their workforce, strong RTW programs are often considered an important strategy. Explore the core elements that can help an RTW process deliver on its potential, and what businesses may gain.
How do businesses and employees benefit from an RTW process?
Many employers assume they can “figure it out” if someone gets hurt. But when processes are verbal, inconsistent or too vague, the consequences can be costly.
With a disciplined RTW process, employers can secure a stronger defense against costs and liability, while employees follow a structured path back to stability.
Contain claim severity and duration
Once an injured employee is away from the job for more than seven days, the claim typically shifts into lost-time status. In Arizona, that change triggers additional workers’ compensation obligations. What might have been a straightforward medical claim can grow more severe, with larger reserves, penalties and longer case timelines.
Containment is one of the clearest benefits of an RTW program, helping keep minor injuries from developing into months-long cases that strain budgets and complicate renewals. This also helps prevent employee issues from being sidelined too long.
Companies of all sizes can benefit from this discipline, but the stakes are often higher for larger organizations where higher claim volume multiplies the financial impact.
Control costs with transitional work
The strength of an RTW program often depends on whether light-duty assignments are clearly defined. Without them, employees may be sent home (sometimes for weeks) while wage-replacement benefits accumulate.
For industries like construction, manufacturing and healthcare, where modified work is harder to find, creativity can have a big impact. Safety training, equipment inspections, inventory management, and even less appealing tasks, such as deep cleaning, can keep employees engaged and maintain safe boundaries for recovery.
Many carriers partner with nonprofits, allowing injured workers to “clock in” at places like food banks or soup kitchens. They’re still earning wages, and employers still meet RTW obligations—a positive outcome for both sides.
Stabilize premiums through EMOD control
Every claim feeds into the experience modification rate (EMOD), the benchmark insurers use to calculate workers’ comp premiums.
- Scores below 1.00 = credit (you pay less).
- Scores above 1.00 = debit (you pay more).
For example, a company with an EMOD of 1.50 may be paying about 50% more than their peers. If their base premium is $40,000, that higher score could push the bill to around $60,000.
One poorly managed claim can swing the EMOD because lost-time claims lose the medical-only discount. This effect is amplified since the claim stays in the rating period for three consecutive policy years, resulting in persistently higher premiums that may outlast the injury.
Employers with a formal RTW process can help employees return in modified roles, which may keep more claims in the medical-only category and help stabilize EMOD scores so premiums remain more predictable.
Strengthen defense against claim fraud
A clear, documented framework makes it easier to push back against exaggerated or fraudulent claims. Carriers and courts typically want proof of consistent practices. A paper-thin process may leave businesses exposed to drawn-out disputes and inflated settlements.
RTW documentation creates the paper trail that discourages opportunistic claims and provides evidence when disputes arise. Without it, employers may be more vulnerable to exaggerated allegations that can escalate into expensive, precedent-setting losses.
Protect employees’ livelihoods
For employees, a strong RTW program can help safeguard their financial footing at a time when stability matters most. Wage-replacement benefits typically cover only a portion of income, leaving paycheck-to-paycheck workers vulnerable to missed bills, rising debt, or even loss of housing. Transitional assignments allow employees to keep earning their full wages while they recover.
Staying engaged in meaningful roles also preserves routine and purpose. That connection can help injured workers avoid the isolation, resentment, and uncertainty that sometimes set in during long absences. Instead, they may return to full capacity with confidence and stronger ties to their employer.
Three core elements of a successful RTW process
A return-to-work process doesn’t succeed on paperwork alone. What determines its impact are the conditions that shape how it functions when an injury occurs.
- Immediate action: Day one sets the tone. A delayed response can allow claims to drag and costs to increase. Strong RTW programs have a playbook in place, so injured employees are engaged right away—before a simple medical case turns into a costly lost-time claim.
- Clear communication: Programs need a defined communication chain so supervisors, HR, claims managers, and the injured worker know exactly who to contact and what steps to take. This clarity helps keep the process moving and builds trust with employees.
- Leadership education: Many managers underestimate how much a single claim affects EMOD scores and premiums. Teaching leaders how RTW connects directly to financial performance helps ensure the program is treated as a business priority.
Partner with experts who put people first while managing risk.
Thoughtful RTW processes can help support financial outcomes, and they also reinforce trust, stability, and a culture of care that workers carry with them long after recovery.
Connect with a Marsh McLennan Agency Arizona representative to explore how an RTW process may strengthen resilience for your business and for the people who make it run.
Our team can also walk you through an EMOD review to show the potential financial impact of current claims and where a stronger RTW process could make a measurable difference.
