“What is Your Company’s EMR? – Experience Modification Rate?” #WorkersCompensation

What Is an EMR Rate?

Experience Modification Rate (EMR) has a strong impact on your business. It is a number used by insurance companies to gauge both past cost of injuries and future chances of risk. The lower the EMR of your business, the lower your worker compensation insurance premiums will be. An EMR of 1.0 is considered the industry average.

If your business has an EMR greater than 1.0 the reasons are simple. There has been a worker compensation claim that your insurance provider has paid. To mitigate the insurance company’s risk, they raise your worker compensation premiums. The bad news is this increased EMR sticks with you for 3 years.

Want to know how Experience Modification Rates are calculated?

The base premium is calculated by dividing a company’s payroll in a given job classification by 100, and then by a ‘class rate’ determined by the National Council on Compensation Insurance (NCCI) that reflects the inherent risk in that job classification. For example, structural ironworkers have an inherently higher risk of injury than receptionists, so their class rate is significantly higher.

A comparison is made of past claims history to those of similar companies in your industry. If you’ve had a higher-than-normal rate of injuries in the past, it is reasonable to assume that your rate will continue to be higher in the future. Insurers examine your history for the three full years ending one year before your current policy expires. For example, if you’re getting a quote for coverage that expires on January 5, 2008, the retro plan will look at 2004, 2005 and 2006.

NCCI has developed a complicated formula that considers the ratio between expected losses in your industry and what your company actually incurred, as well as both the frequency of losses and the severity of those losses. A company with one big loss is going to be ‘penalized’ less severely than a company with many smaller losses because having many small losses is seen as a sign that you’ll face larger ones in the future.

The result of that formula is your EMR, which is then multiplied against the manual premium rate to determine your actual premium (before any special discounts or credits from your insurer). Essentially, if your EMR is higher than 1.00, your premium will be higher than average; if it’s 0.99 or lower, your premium will be less.

How does a high EMR affect costs?

An EMR of 1.2 would mean that insurance premiums could be as high as 20% more than a company with an EMR of 1.0. That 20% difference must be passed on to clients in the form of increased bids for work. A company with a lower EMR has a competitive advantage because they pay less for insurance

How do I lower EMR?

The good news is that EMR can be lowered. If you need help in putting an effective safety program in place that eliminates hazards and prevents injuries contact us at Benton Safety Consultants.  Remember, No injuries equal no claims.

In the real world, injuries will happen, but the response can help keep EMR from increasing as much as it could without proper management. Having a plan to manage injuries and workers compensation claims is a must to get control of the EMR.

Reducing EMR gives you an edge over your competition when bidding out work and save money. Construction general contractors and owners are realizing the benefits of low EMR numbers and often prequalify companies before they even look at bids. It would be unfortunate to lose business and money because of high EMR.


“Infographic: “Is It Recordable?”

Is It Recordable?

Is It Recordable? by Safety.BLR.com

“Nursing Our Injured Workers’ Ain’t No Hooey”

I was intrigued by this article in my daily Workers Compensation.com – CompNewsNetwork on how Traveler’s Insurance has taken a bold step in hiring Nurses for a “Concierge Claim Nurse Program which guides an injured worker back to work quicker and saves money by working one on one with their Concierge Claim Nurse. Seems that Unions might not be in agreement with the program. Now, don’t get me wrong, I have no issue with Unions…But, isn’t the ultimate goal when an employee gets hurt is to get them back to work sooner? Read on!



A recent article in the Houston Chronicle likely provides a glimpse at what an element of workers’ comp will look like in the not too distant future. The subject concerned the use of what is called the ConciergeCLAIM Nurse program run by Travelers Insurance. Travelers touts it as a program that has both lowered cost and improved care for the injured workers’ who elect to enter it.

Those injured workers are assigned a nurse who helps them navigate the complex and confusing world of workers’ compensation, and assists them in setting appointments, communicating with doctors and employers, overseeing physical therapy sessions, arranging medical equipment deliveries and making sure treatment proceeds smoothly.

Travelers’ reports that employees in the program returned to work 24 percent faster and workers’ comp costs were cut by 5 percent in cities where the program is employed. They also claim that the program better steered injured workers through their provider network and sped up workers’ compensation claim initiation.

Not everyone, of course, is a fan of this concept. True to form, the United Steelworkers Union has come out opposing programs such as this, calling them “an intrusion into what should be a sanctuary where doctors and patients make decisions unfettered by corporate concerns”. A spokesman for a United Steelworkers Local told the Chronicle that he believes it is just “another attempt by the insurance company to override doctors and patient care to try to cut costs”. Specifically, he said, “I think it’s a load of hooey”.

That statement is clearly the quote of the week for Bob’s Cluttered Desk.

As visionary as that statement seems on the surface, we must recognize that “hooey” is a rather subjective term. I am not sure which Union Spokesman School is still utilizing it as part of the curriculum for their students. It largely went out of favor after the “Making cars cheaper in Mexico is a bunch of hooey” debacle of the 1980’s. That embarrassing faux pas of course was preceded by the 1960’s version, known as “Making clothing in Southeast Asia will never fly and is a bunch of hooey”.

The union simply sees these services as “interference” that is preventing the injured worker from getting to the doctor and receiving the care they need.

That, quite simply in my opinion, is a classic example of an organization clinging to the past, and championing what has become a failed medical provision model. Workers’ comp is confusing. Medical costs are soaring, and outcomes have been declining. Disabilities are on the rise. We are paying much more, and getting much less for the effort. Health care reform will only increase pressures on this failing fee for services system.

Nurses and Nurse Practitioners will be a major component of workers’ comp medical care in the future. This style program makes too much sense to ignore. This is not about preventing care; it is about targeting and expediting care. It is about personalizing the process, and assisting people on a path to recovery. It is about lower cost and better outcomes.

With the pressures that exist within modern medicine today, clinging to an archaic vision of a time “where doctors and patients make decisions unfettered by corporate concerns” is just a bunch of hooey.

Sorry if I got too technical on you.

This seems to be Travelers’ view as well. In a written statement, VP of Travelers’ Workers’ Compensation Claim Services, Jim Wucherpfennig, whom we will refer to as Jim W as we have no idea how Wucherpfennig is pronounced, said, “Increased demands on the health care system, an aging population and a limited supply of physicians could mean increased time out of work for injured workers because of longer waits to access medical care. The local and responsive nature of the ConciergeCLAIM Nurse program helps employees return to work sooner and reduces employers’ workers’ compensation-related costs.”

That statement is absolutely correct. Innovative use of medical professionals such as nurses can smooth the path to successful recovery for these injured workers. They should be utilized. The unions should learn that before all their jobs end up in Hooeyville, Malasia. The stats back it up, and that ain’t a bunch of malarkey.

Source: http://www.workerscompensation.com/

%d bloggers like this: