If your company isn’t actively working to control its Experience Modification Rate (EMR), your annual workers compensation insurance payments are probably too high. The growing presence of EMR eligibility ceilings on jobs and projects compounds the problems facing contractors in today’s market. Essentially, an uncontrolled EMR is a direct hit to your bottom line.
Fortunately, you can protect your company from these issues by focusing on 3 areas of control:
- The time it takes for an employee to return to work following an accident on the job.
- The reserve amount that your insurance company sets aside in expectation of paying new claims.
- Your company’s payroll figures reported to ratings agencies.
Limiting the time it takes for an employee to return to work (between 5 and 7 days depending on your state) after an accident means that the claim will be reported as “medical-only”. Medical-only claims are calculated in the EMR with a 70% discount, so controlling this factor can substantially lower yearly claim totals and improve EMR.
Next, the reserve amount set by your insurance provider for paying claims can be artificially high in some cases. This can be controlled by scheduling meetings with your insurance company’s claims adjusters often to ensure reserves are set at appropriate levels for each open claim.
Finally, if payroll figures are underreported, a bigger company will look like a smaller company while still incurring the claims totals of a larger company, so it is important to proactively monitor the accuracy of what has been reported.
Early, Cassidy & Schilling, Inc can help you manage issues facing your contracting business. If you have any questions, give us a call at 301-948-5800.