Good Reasons…


To have a drug- and alcohol-free workplace program

In its simplest form, managed care describes a variety of techniques that, when properly deployed, can help support an effective risk-management program. These strategies can be most effective when they concentrate on both injury- prevention and post-injury techniques.

Testing May Equal Savings

One effective managed care strategy is a drug- and alcohol-free workplace program, which, where appropriate to business need and after consultation with qualified counsel, may include pre-employment, random, or post-incident drug testing. An appropriately utilized and compliant program can help prevent drug and alcohol use. A drug- and alcohol-free workplace program can also offer benefits over and above initial intent.

  • Direct savings may come in the form of premium credits. Some states offer workers compensation discounts for a certified drug- and alcohol-free workplace program. Insurance carriers in other states may have discretionary underwriting credits available.

  • Indirect savings are those realized by simply reducing the negative consequences of workplace drug and alcohol use. Intuitively, it makes sense that employees who are under the influence of drugs or alcohol are more likely to experience a workplace injury. Breathalyzer tests detected alcohol in 16 percent of emergency room patients injured at work.1. These workers jeopardize their productivity and safety, and the safety of others. Few businesses are immune from this issue.

What Can a Drug/Alcohol Policy Impact?

An effective drug- and alcohol-free workplace program can have an impact on your business in a few different ways.

  • Pre-employment drug testing can help sidestep the risk before you hire it into your business. This also sets a cultural expectation that drug and alcohol use will not be tolerated in your workplace.
  • Random drug testing sends a strong message to employees that workplace substance abuse will be monitored. It may also help you identify and manage employees with risky behavior.
  • Post-incident drug testing can be a critical component of claims management. The presence of drug or alcohol usage can impact the course of treatment for the affected individual.

The End Result

When using any of these drug-testing measures, a worthwhile goal is to help eliminate negative consequences of drugs and alcohol. You’re not testing to catch anyone; it could be argued that the best testing program is one that catches no one. Success can be defined by the absence of these substances.

Taking appropriate measures to help reduce the number of claims could create a distinct competitive advantage, not to mention the overall positive effect on your business. A compliant and well-managed program is a technique you can use to enhance your work environment. It is important to note, however, that legal rules and restrictions may apply to policies that involve workplace drug use or testing. Be sure to seek qualified legal counsel before developing and implementing a policy.

Federated Insurance offers clients access to vendors that provide drug and alcohol testing resources. For more information, contact your local Federated representative or log in to Federated’s Shield Network.

1 “Drugs and Alcohol in the Workplace”; National Council on Alcoholism and Drug Dependence, Inc.; accessed June 2018

Article Written By Jerry Leemkuil

Jerry Leemkuil is field manager for Association Risk Management Services, Federated Insurance Company. For information, write to Jerry at or call 1-507-455-5507.

This article is for general information and risk prevention only and should not be considered legal or other expert advice. The recommendations herein may help reduce but are not guaranteed to eliminate, any or all risk of loss. The information herein may be subject to and is not a substitute for, any laws or regulations that may apply. Qualified counsel should be sought with questions specific to your circumstances. © 2019 Federated Mutual Insurance Company. 


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