Reduce Workers’ compensation Premium with a Drug-Free Workplace
By Andrew Current and Katherine Miller
With 50 states in the U.S. and no federally-mandated, nation-wide drug and alcohol testing program, laws vary drastically by state. Twelve states currently have workers’ compensation premium discounts available for those that choose to comply with their voluntary drug testing laws. Discounts vary by state and some states even offer multiple discounts. As well, the requirements to receive such discounts vary according to law and may cover testing, lab procedures, MRO, panels and test type, etc. Following is a brief overview of which states offer workers’ compensation premium discounts.
Workers’ compensation Premium Discounts through Drug-Free Workplace Credits by State
Alabama has no mandatory drug testing laws but requires compliance with two laws in order to receive a workers’ compensation premium discount. Alabama offers an up to 5% workers’ compensation discount if employers comply substantially with the voluntary Alabama Code 25-5-300 to –340 and Alabama Administrative Code 480 5-6.
Arkansas offers employers a 5% discount on workers’ compensation insurance, but employers have to meet strict conditions in order to receive it. All drug and alcohol testing must conform to the standards, procedures, and rules outlined in Arkansas Code Ann. 11-14-101 et al. and Arkansas Admin. Rules 099.36, and must report annually to the Director of the Workers’ Health and Safety Division of the Workers’ compensation Commission. Employers who are required to adhere to federal drug testing policies and procedures are considered compliant with these laws, and are eligible for the discount upon the completion of a compliance form provided by the state.
Florida has a voluntary drug testing law that employers can choose to follow which offers a 5% discount to employers who comply with Florida WC Code 440.102 and Florida Admin. Code 59A-24 et al. Some construction contractors are mandated to comply with the voluntary program.
Employers who choose to follow Georgia’s voluntary drug testing law can receive a 7.5% discount. Employers must comply with the requirements of the law set forth in Code Section 33-9-40.2 in order to receive the discount.
Idaho offers a voluntary drug testing law that employers can choose to follow in order to receive a discount under Idaho Code 72-1701 et al. Unlike most other states, Idaho does not offer a set percentage discount, but rather allows the insurer to determine the discount offered to employers on an individual basis.
The state of Kentucky offers a general workers’ compensation premium discounts for employers through a voluntary law, as well as a specific discount for the mining industry. Employers complying with KAR 25-280 are eligible for a 5% credit on workers’ compensation premiums. Mining industry employers who are coal mine licensees and have a drug-free workplace program that is certified by the division are eligible to obtain a credit of at least 5% unless it is deemed actuarially unsound.
Mississippi has a voluntary drug testing law that allows for a workers’ compensation premium discount for employers under Mississippi Code 71-3-201 et al., Mississippi Code 71-7-1 et al., and Mississippi Admin. Code 15-3-1-53 et al. The employer must show proof of certification to their insurer annually in order to receive the 5% discount
Ohio’s Drug-free Safety Program offers a varied discount rate. Employers who comply at the basic level are awarded a 4% discount and those that comply at the advanced level are offered a 7% discount. Full details on what constitutes a basic or advanced level of compliance can be found with the Ohio Bureau of Workers’ Compensation.
Employers that comply with South Carolina Code Ann. 41-1-15 and 38-73-500 can receive a 5% discount. These laws offer employers wide latitude in developing their programs and only set basic drug testing threshold requirements.
Employers who choose to follow Tennessee Code Ann. 50-9-101 to 112 and Tennessee Comprehensive Rules and Regulations 0800-02.12 et al. are entitled to a 5% discount unless the Commissioner of Commerce and Insurance deems that it is actuarially unsound. All employers who are required to conduct federally mandated drug testing are entitled to the 5% discount.
Virginia offers a voluntary drug testing program under Virginia Code Ann. 65.2-813.2 where insurers create their own criteria for employers to receive a 5% discount. Employers must contact their workers’ compensation insurance provider to determine the exact requirements of that insurer’s drug-free workplace program.
Wyoming offers a voluntary drug testing law that provides a workers’ compensation premium discount. The first law, detailed in Wyoming Code Ann. 27-14-201, allows a discount not to exceed 10% for a drug and alcohol testing program that complies with the conditions outlined in the voluntary law. The second law, outlined in Rules Wyoming Workers’ Compensation Division Ch. 1, 2, & 10, makes additional provisions in order to qualify for the above-mentioned discount. However, if an employer does not maintain their program during the entire discount period of one year, then they are responsible for the reimbursement of all previously granted discounts to the workers’ compensation division for each year or portion of a year that they did not comply.
While compliance with drug testing laws may seem overwhelming, it can be a straightforward and simple experience if employers repeat the process seen here. Identify applicable laws, lay out requirements for testing procedures, and weigh the costs and benefits. The savings available on workers’ compensation insurance premiums covers the cost of drug testing many times over. These savings manifest themselves in direct discounts on insurance premiums, but also in reduced accidents, sick-time, and lost productivity as workplaces become safer.
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