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“Developing a Safety Culture”

- The New Workers Compensation Experience MOD - Understanding and Improving Your CSA Performance

Why is There an E-Mod?

E-Mods are an adjustment to average rates to recognize employers who have done better or worse than others over three years. The E-Mod adjustment is most sensitive to the most predictable losses.

Published Workers Compensation

Rates (Average Rates)

Benchmark for

Payroll

Job Classifications

Industry Standard Individual Employer’s

E-Mod (Loss Experience)

Who Calculates Your E-Mod?

• National Council on Compensation Insurance (NCCI) collects data and calculates E-Mods for most states

• NCCI proposed E-Mod calculation changes began in 2013

NCCI

The E-Mod

• An experience modifier (e-mod) is a multiplier applied to the premium of a qualifying policy and provides an incentive for loss prevention

• The e-mod represents either a credit or debit that is applied to the premium before discounts

• If your company’s loss experience is more costly on the average, the result is a debit e-mod, or surcharge on premiums. If your company’s experience is less costly than the industry average, you will receive a credit e-mod, or discount, on your premium

Average Experience Mod

Factor

1.00

Greater than 1.00

Less than 1.00 Credit Modifier =

Lower Premiums

Debit Modifier =

Higher Premiums

Experience Mod Impact

1

Basic Features of the Formula

• Formula divides actual losses into “Primary” and “Excess”

– Primary losses carry the most impact and are currently defined as the first $5,000 of each claim

• D-Ratios determine the percentage of expected losses that are primary losses in a given class code

• Individual actual losses are capped to reduce the impact of a catastrophic loss

Losses

Primary Losses

Excess Losses

Med Costs Share of Total Cost is Increasing Steadily

WC Med Cost Will Equal 67% by 2019 if Trends Hold

Projections by NCCI • Credit Mods:

– 46.4% will drop by more than two points – None will drop by more than ten points

• Debit Mods – 17.8% will increase by more than two points – 7% will increase by more than ten points

Changes – The Impact

Summary of Changes

2015: $15,000 + claim inflation For an est. total of $17k in 2015

2013: $10,000

2014: $13,500

The primary actual loss level will increase in stages:

The D-ratios will increase to adjust the expected primary losses

Impact of Split Point Change

• In general experience rating credits will become larger and experience rating debits will become larger

• Over 76% of experience rated employers will see a reduction in their mod (most in the range of 1% - 5%)

So…What Can We Do?

Claims Management Program

Pre-Injury vs.

Post-Injury

Injury Prevention & Management

• Safety—A good safety program should be at the center of your system to help identify and control the risk of injury in your operations.

• Hiring Practices—Good hiring practices can help you hire skilled, knowledgeable and physically capable employees who are suited for the job.

• Select Provider—Good reporting, prompt medical attention and excellent communication are at the heart of effective workers’ compensation claim handling. By designating a physician or clinic to handle workplace injuries and illnesses, the injured employee receives consistent, quality medical care with a focus on returning to work.

• Return to Work—A return to work program is designed to bring injured employees back to work safely and as soon as possible in a medically approved and accommodated capacity.

• Health and Wellness—Health and wellness programs are focused on preventing employees from developing chronic conditions that drive these higher costs.

Injury Prevention & Management Drug & Alcohol Testing Program

Three Stages: 1. Pre-Employment 2. Reasonable Suspicion 3. Random

Develop a Comprehensive Program!

• Appropriate Training – Orientation – Safety Training – On-going On-the-Job Training

• Hazard Recognition • Worker Observations • Ergonomics

Injury Prevention & Management On-the-Job

Pre-Injury Strategies

• Accident Reporting Program • Accident Investigation • Direction of Medical Care • Drug & Alcohol Testing Program • Return-to Work Program

Post-Injury Strategies: Execution of the Plan

• Prompt Reporting of All Claims • Collect ALL the Accident Details • Clear Direction of Medical Care • Immediate Drug & Alcohol Testing • Constant Monitoring, and

• Corrective Action When Needed

Improved Communications Between… • Injured Worker • Medical Provider • Employer • Insurance Company/Claims Administrator • Everyone!

What Can you Do?

Questions?