Your company’s workers’ comp experience mod is used as an indicator of workplace injury risk. It’s based on your company’s actual incurred losses compared to other companies in your industry and used to calculate your company’s future expected losses.
The average experience mod is 1.0, or average. When your actual incurred losses are lower than your expected losses you enjoy a lower premium. If it’s higher than the average, you pay more.
Clearly, companies want to have a low experience mod so they’ll pay less for worker’s compensation insurance. Here are a few strategies to help lower your experience mod.
Reduce New Employee Risk
New employees are more likely to have a workers’ compensation incident. They may not have the necessary skills to do work safely, so it’s important companies pay special attention to the hiring process.
Create a detailed job description which includes any physical requirements. Include safety questions during the interviewing process.
Once you think you’ve found a good candidate, ensure they understand all the job duties before accepting the position. Consider pre-employment physicals, physical ability tests and drug testing too.
Evaluate the new employee’s performance after several weeks too. If there are issues, rework your hiring process.
Develop a Thorough Safety Program
Employees need to understand the dangers of the equipment, processes and hazards they may encounter. Gradually introduce new work so employees can gain skill, experience and knowledge.
Enforce personal protective equipment use and teach best practices. Revisit safety periodically to reinforce training. As accident frequency and severity decreases, your experience mod decreases too.
Prevent Repeat Losses
Document and investigate every incident. Speak to the employee and interview witnesses. Learn as much as possible about the cause of the incident to prevent similar occurrences.
Repeat similar injuries or injuries to employees in a particular job may indicate a weakness in your safety training. Fine tune your program to prevent repeat losses.
After you aggregate your data, involve leaders and establish accountability. Have a meeting to determine what needs to be done in certain areas, what could be done better and what’s been learned from past mistakes.
Let leaders communicate with one another, create sensible procedures and determine safety accountability levels.
Return-To Work Program
Lengthy claims are costly, so a return-to-work program is imperative if your company wants to lower its experience mod.
Claims that don’t include indemnity lost wage payments (medical-only) are reduced 70% in experience mod calculations. Claiming $3,000 instead of $10,000 lowers your actual incurred losses. Plus, getting your employee back to work as soon as possible boosts their morale.
Utilize Injury Triage
Minor cuts and bruises needn’t become full-fledged significant claims. Use a telephone nurse triage service to help sort minor from significant injuries to lower actual incurred losses and your experience mod.
Revisit Claims Often
Experience mod calculations include your total incurred losses, but it is offset by outstanding reserves for any open claims. As a result, it is very important to revisit claims often for change.
If an employee is progressing better than expected, they may not need treatments you’d previously planned on. This means you can increase your reserves and lower your total incurred losses. However, you must identify the change before the experience mod calculation. The reporting date is six months before the policy renewal date, so revisit claims regularly.