Who's Managing your Experience Modification Rate Factor?
Focusing on employee
education and management
accountability will help mitigate workplace risks, thus preventing
accidents before they happen.
Employers can control workers' compensation claims and lower related
costs through the creation and support of both pre- and
In the pre-claim phase, employers should begin by
creating a culture of safety and implementing effective new hire
critical element in any post-claim program is the implementation of a
return-to-work program that provides employees with an opportunity to
begin working on a modified schedule with the goal of transitioning back
to their regular jobs.
In the post-claim phase, employers should focus on the injury and claims
management processes. This may include ensuring that consistent
internal policies as well as medical referral procedures are in place.
Ideus&Co. can provide your organization with both pre and
What Drives the Cost Increases?
costs can primarily be attributed to an increased use of medical
benefits and duration of disability.
Claims are modified in the experience rating formula to
weight on the frequency of claims, rather than severity of
Generally, an employer has some influence over the frequency
but once a workplace injury occurs, an employer has little
over the ultimate cost of the claim.
Because of this, the experience modification calculation
into two parts - a primary amount and an excess amount.
represent the more controllable portion of a claim, while
amount represents the less controllable portion.
*Effective January 1, 2010, the first $7,000 of a claim's
value is considered Primary. Any remaining amount is considered Excess.
The longer employees remain out of
work, the more wage replacement and medical services are required.
To manage this costly trend, companies must take a more aggressive
approach to managing their experience modification rate and their workers' compensation procedures.
What Will You Say When They Ask What Happened?
Employers who want to control their workers' compensation costs should
be asking themselves these questions:
How do our workers' compensation costs compare to those
Do we encourage and reinforce safe working behaviors?
How do we allocate workers’ compensation costs? How are accountability for safety and workers' compensation incorporated
management's performance metrics?
Aside from my insurance programs, what proactive steps can I take to
lower costs and reduce the number and severity of injuries? Do we have
an effective cost containment program in place?
Is there a pattern to our claims? Are some locations performing
better than others?
Have we audited our workers' compensation service vendors to ensure
they are meeting service quality standards? Have we confirmed their
compliance with operating procedures?
Do we conduct pre-claim and post-injury assessments to target and
control workers' compensation cost drivers?
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