EMR Explained.
What is EMR?
Experience modification rating, also called EMR or Experience mod, is a number used by insurance companies to measure risk. It is an insight into a company’s injury rates and measures the past cost of workplace accidents and the future risk of your business compared to others in the same industry and state. Workers’ compensation is a benefit system developed to provide medical coverage and wage replacement for injured employees. EMR significantly impacts the workers’ compensation insurance premium of a company.
How is EMR determined?
EMR is determined by a complex formula that considers factors such as gross payroll, job classification rate, claim history, expected losses, and the frequency and severity of those losses. The frequency and severity of workplace accidents are significant components of EMR. To determine EMR, Insurance companies use the National Council on Compensation Insurance (NCCI) to gather data and provide most states with insurance rates and loss cost recommendations. However, some states, including North Carolina, have independent bureaus that determine EMR. New employers start at 1.0, which is the industry average.
Why does EMR matter to my business?
Your company’s EMR directly affects the price of your business insurance premiums. It is a financial incentive to provide a safe workplace for your employees. Workers’ compensation costs will be lower if your business has a lower EMR; likewise, an EMR greater than 1.0 will increase the workers’ compensation premium costs. A better EMR rating will allow your company an advantage in bidding for work, while a high EMR can cost you contracts and bids. A high EMR may even limit a contractor’s ability to qualify for specific projects. A company with an EMR above 1.0 may benefit from a comprehensive review of its workplace safety programs. Knowing your EMR rating is essential, especially in the construction, transportation, and material moving industries, where there is an increased risk of workplace hazards, accidents, and incidents. If you need to know your company’s EMR, call your insurance agent to locate it. It is usually available at your annual premium audit and is traditionally based on a three-year period.
Improving safety at your business is essential for moral, personal, and financial reasons. Keep in mind that a strong safety culture can lower your EMR.
How to Improve your EMR.
- Prioritize safety at your organization by making safety and health a core organizational value.
- Improve your safety culture by involving everyone in the safety of your organization.
- Update and review your safety manual and loss prevention program annually.
- Continually improve safety at your workplace with frequent safety and health audits.
- Enforce your safety policies with a fair discipline system for all employees.
- Establish in-depth loss control by identifying uncontrolled hazards and taking corrective actions to eliminate hazards.
- Regularly communicate regarding health and safety topics via daily toolbox talks, emails, and memos.
- Implement a Safety & Health program if you do not have one.
- Improve job training, emphasizing safety.
- Provide safe tools and equipment.
- Document and investigate incidents and near-misses with accurate and detailed reporting, which helps prevent future accidents.
- Establish injury planning and procedures.
- Implement a transitional return-to-work program such as modified, light duty, or temporary work for employees to lower the number of workdays lost due to accidents and illnesses.
- Take a proactive approach to safety and loss control.
- Control accident costs by using a designated medical provider.
Contact us today to learn more about EMR and how it affects your business. Keeping your business successful involves controlling costs, including workers’ compensation costs. The link between EMR and insurance costs can make the case that safety is worth the investment. We have helped many companies implement robust safety programs and obtain a lower EMR rating, ultimately lowering insurance costs. Investing time, energy, and money into safety today can save you money later. Safety Consulting Specialists offers specialized safety training and implements solutions to improve workplace safety. Contact us today to get started or if you have EMR-related questions. We’d be glad to give you more information.
