WorkComp Advisory
newsletter archive case studies articles

A gift that keeps giving: reduced mod

As WorkComp Advisors, we recognize that insurance companies do not pay for employee injuries, they merely finance them. You, the employer, pay the cost and often this is two or three times the cost of the claim. Our approach is to help you to manage and control your injury costs, so that your Workers’ Compensation costs are always under control.

One goal is to get your Experience Modification Factor as low as possible and to keep it there. This requires continual diligence and implementation of processes that have been proven to drive down your costs.

The chart above clearly demonstrates how the mod impacts a premium.

During a declining rate cycle, it is more difficult to lower the Experience Mod. The plan expects that if rates go down, so should injury costs. So, if injury costs don’t track downward consistent with the rate decreases, then the Experience Mod goes up. An increase in the Experience Mod can, and often does, wipe out any savings from the rate reduction.

To control costs, it is critical for employers to be vigilant and aggressive in reducing their injury expenses and to stay the course. One of the major mistakes employers make is to hand over too much responsibility to the insurance company in managing injury costs. Insurance companies are neither positioned for nor capable of doing this job alone, primarily because their involvement is after the fact.

Employer involvement is essential and begins before the injury occurs. Preventing injuries goes beyond safety training and involves hiring practices, powerful employee relationships, and a positive corporate culture. After an injury occurs, aggressively managing the injury involves a 24-hour injury response, claim coordinator program, back-on-the-job program, supervisor training, medical clinic relationships, independent nurse and ongoing training.

It is our job as WorkComp Advisors to guide you in implementing these practical and proven processes that drive down costs.