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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 post-claim programs.
In the pre-claim phase, employers should begin by creating a culture of safety and implementing effective new hire selection programs.A 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 post-claim programs.
What Drives the Cost Increases?
Rising 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 place greater weight on the frequency of claims, rather than severity of claims. Generally, an employer has some influence over the frequency of claims, but once a workplace injury occurs, an employer has little control over the ultimate cost of the claim.
Because of this, the experience modification calculation divides claims into two parts - a primary amount and an excess amount. Primary losses represent the more controllable portion of a claim, while the excess 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:
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 post-claim programs.
In the pre-claim phase, employers should begin by creating a culture of safety and implementing effective new hire selection programs.A 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 post-claim programs.
What Drives the Cost Increases?
Rising 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 place greater weight on the frequency of claims, rather than severity of claims. Generally, an employer has some influence over the frequency of claims, but once a workplace injury occurs, an employer has little control over the ultimate cost of the claim.
Because of this, the experience modification calculation divides claims into two parts - a primary amount and an excess amount. Primary losses represent the more controllable portion of a claim, while the excess 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 of our peers?
- Do we encourage and reinforce safe working behaviors?
- How do we allocate workers’ compensation costs? How are accountability for safety and workers' compensation incorporated into 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?
