What is the Experience Modification Factor?

Intro

An employers E-Mod is used to modify manual workers compensation rates causing premiums to either increase or decrease based on historical claim trends. The E-Mod is an equation that gauges expected losses versus actual losses based on the Expected Loss Ratio which is set by NCCI. Companies with expected claims of $1,000 that have losses of $1,000 will have an E-Mod of 1.00 showing that they have an average claims experience inside of their industry group among peers. You have no advantage or disadvantage over your competitors in regards to workers compensation with a 1.00 E-Mod.

Impact of the E-Mod

The E-Mod is significant because it offers the ability to get discounts on your Work Comp policy, however, with poor loss experience it can negatively impact your business with punitive rate increases. With good safety and claims management practices a savvy employer can control the E-Mod and gain a competitive advantage over their industry peers. This is especially significant for businesses that bid on jobs as seen in the construction and manufacturing industries. The savings inside of workers compensation can mean the difference between winning and losing a job.

Calculations

If you want to nerd out and see how complicated the calculations of the E-Mod are, check out the NCCI’s ABC’s of Experience Rating.  If you have even a little bit of trust, let us do this for you.

Cost Drivers:

Severity – NCCI categorizes claims in excess of $15,000 as severe claims. States put a cap on large claims so that shock losses do not overbear other claims. Excess losses over $15,000 represent severity in the E-Mod.

Payroll – Payroll is used by the NCCI to determine expected losses per class code. Your payroll and NCCI’s predictive analytics determine average expected losses across industries. Companies with less payroll are expected to have fewer and less severe claims. This means larger companies have more potential for savings and more insulation for claim exposure. Expected losses are driven by Expected Loss Ratio's or ELR's and multiplied by payroll to determine the expected losses by class code.

Frequency – Frequency of claims has the largest impact on the E-Mod because this demonstrates that a company has a poor safety culture, hazardous workplace and lack of management oversight. Think about it - a bunch of small claims leaves the potential for a much larger claim in the future. Controlling frequency is the best way to control the E-Mod.

Medical vs Indemnity claims – NCCI rewards employers for getting workers back to work after an injury within 7 calendar days. When a claim is medical only meaning no benefits have been paid out to the employee for missed work the value of the claim is reduced by 70% when calculating the E-Mod.

Claims Management Services

Intro

In the past few years, Workers Compensation has become increasingly less employer friendly. A successful Workers’ Compensation insurance program relies on high quality claim handling.   Many insurers and TPAs are not delivering in this critical area which can significantly impact your bottom line.

Our WC Claim Management specialists are experts in the WC laws, as former claims examiners themselves, and are able to recommend courses of action that claim adjusters often overlook. We believe the only good claim is a closed claim, so our focus is on getting claims closed as fast as possible at the lowest possible cost.

work comp is CONTROLLABLE

We do not just “sell” Workers’ Compensation insurance policies. We believe WC insurance costs are “controllable” and we focus 100% of our efforts in assisting our clients in meeting their cost goals.

Following are a few of the services we provide:

  • Negotiate with insurers or TPA Special Account Handling instructions that meet your requirements
  • Ensure that a highly qualified and experienced WC adjuster (bi-lingual where necessary) is assigned to handle your claims
  • Coordinate a cost-effective, detailed plan of action through a team approach with the employer, adjuster, defense counsel and appropriate vendors.  Assist employers in gaining an understanding of the WC system and pitfalls for employers
  • Evaluate your current claim handling procedures and suggest improvements where necessary
  • Assist in training your staff in claim handling procedures, claim investigation and fraud recognition
  • We will coordinate claim reviews to ensure there is a claim resolution strategy and that claims are not excessively reserved
  • We encourage employers to actively participate in these claim reviews as well as depositions of employees when possible
  • Assist in selecting an ethical medical clinic that provides high quality treatment, agrees to work with your First Aid program and facilitates rapid return to work through appropriate modified duty
  • Consult on available Medical Provider Networks (MPN) options and required enrollment procedures
  • We will coordinate claim reviews to ensure there is a claim resolution strategy and that claims are not excessively reserved
  • We encourage employers to actively participate in these claim reviews as well as depositions of employees when possible
  • Provide advice regarding the handling and reporting of “First Aid” claims in accordance with the Labor Code and OSHA guidelines
  • Assist with Early Return to Work programs where appropriate for the employer
  • Evaluate, select and negotiate with the insurer for dedicated defense counsel, where applicable, to represent the employer on litigated claims
  • Provide advice and assistance in communications with injured workers
  • Evaluation of the insurer’s billing and utilization review processes
  • Evaluate the insurer’s willingness to aggressively investigate and deny fraudulent claims including conducting sub rosa investigations where needed

REASONS FOR CHANGE

We will prepare estimates of prospective experience modifications shortly after the insurer makes their unit statistical filing with NCCI. This will show you how your experience modification is trending and reasons for the change. This will be based on currently available NCCI experience rating plan factors, which may be different when your experience modification is actually published.

Our WC Claim Specialists have substantial experience in assisting our clients who have, through Collective Bargaining, enrolled in an Alternative Dispute Resolution This expedites the resolution of claims by replacing the jurisdiction of the Workers’ Compensation Appeals Board with this much more employer friendly process.

Safety Resources

Intro

We understand the Workers’ Compensation risks faced by employers across multiple industries. We are committed to helping our clients reduce the number and severity of their WC claims. We do this with third party Loss Prevention Specialists and by working with insurance companies to ensure they fulfill their Loss Control & Safety obligations.

Our teams can provide Early Return to Work Program, Heat Illness and Injury Protection Programs, and specific detailed loss control measures for specific industries.

SERVICES WE PROVIDE

  • Bi-lingual (Spanish) safety materials and in-field training where required. All training can be conducted in English & Spanish
  • Supervisor training in safety critical behavior modification; accident prevention, investigation, mitigation and accountability for preventing accidents
  • Training and issuance of certifications where required by law for Forklift Operators, Hazardous Material Handling (Pesticides), GHS/Hazard communications program, First Aid & CPR and Heat Illness prevention
  • Assistance in developing Injury & Illness Prevention programs required by law
  • Assessment of operations to identify physical or environmental hazards including handling of hazardous materials
  • Assistance in evaluation of equipment to ensure safety devices are installed and operational
  • Assessment and identification of ergonomic issues that can lead to WC claims
  • Accident investigation of serious claims and assistance in documentation for OSHA Assistance with OSHA violations and mitigation of fines or penalties
  • Assistance in developing Early Return to Work programs
  • Assistance in identifying claim patterns and trends
  • Assistance in creating safety programs that target specific areas of high claim frequency or potential serious injuries
  • Assistance in establishing Supervisor accountability and incentive programs
  • Coordination of insurance company provided loss control & safety services

CONSTRUCTION SERVICES

Our safety engineers are recognized by their peers and clients as the best and brightest in the industry. They speak the same language as our client’s field personnel and communicate safety, strategy, and vision to top management.

Our safety engineers are responsible for:

  • Supports/audits the safety efforts of our construction clients in any manner necessary
  • Provides resource materials and educational programs to clients as a specialist instructor, including but not limited to fall protection, crisis management and other related topics
  • Reviews current safety programs and procedures and offers recommendations for IIPP enhancements or revisions in response to evolving OSHA regulations and legislation
  • Creates and improves clients’ overall safety cultures while also increasing their bottom line when it comes to lowering their Experience Modification Factors via reduced claims frequency and severity
  • Offers immediate crisis management support and OSHA question feedback via on-line & cell direct communications
  • He also assists in design and implementation of project specific safety programs

OTHER SAFETY SERVICES

Our loss prevention and safety specialists can also assist you in the following areas:

  • Development of Safe Driver Training programs that comply with State and Federal laws
  • Assistance in establishing Drug & Alcohol testing programs
  • Assistance with Food Safety issues
  • Identification of hazardous conditions that could result in claims to third parties