Understanding your Workers Compensation Experience Modification will help you prepare how to react to work related injuries.
It's right there, smack dab in the middle of your Experience Rating Worksheet...
"RATING REFLECTS A DECREASE OF 70% MEDICAL ONLY PRIMARY AND EXCESS LOSS DOLLARS WHERE ERA IS APPLIED."
What is ERA?
A) Earned Run Average
B) Equal Rights Amendment
C) Laundry Detergent
D) Experience Rating Adjustment
For this illustration, answer D) Experience Rating Adjustment.
In ERA States, the Experience Modification Factor allows for the 70% reduction in the reportable amount of medical-only claims.
That is, for claims where there has been no payment to the injured worker for lost time, the medical only loss is reported at only 30% of the actual claim.
Why was this implemented by NCCI?
It gives employers an incentive to report all claims to their insurers, rather than trying to pay for medical-only claims out of pocket. Reason being, Claims are handled more efficiently by Insurance Companies rather than Work Comp Employers.
Why is this important to an employer?
Discounting medical-only claims in the experience mod calculation significantly reduces the impact of medical-only claims on the modifier.
What processes can you put in place to take advantage of this 70% credit?
1) Establish Occupational Health Clinic Relationships and Educate Management on proper procedures when an employee is injured at work.
2) Establish Return to Work Guidelines, including well-supervised and medically-appropriate temporary transitional work.
3) Coordinate with Treating Physicians, Management, and Employees.
Managing your Experience Modification and work related injuries will help reduce your Work Comp Rates!