Understanding the Driver of Your Workers' Compensation Premium Expense

Published in Women's Health on March 10, 2023

ForecastingJim Nygren, President, VGM Insurance Services

With workers’ compensation premiums being one of your largest insurance related expenses, it’s critical to understand how these premiums are calculated and what you can do to better manage this expense. In this article, we will discuss the Workers’ Compensation Experience Modification and how this factor impacts your premiums.

What Is the Workers’ Compensation Experience Modification?

The Workers’ Compensation Experience Modification is a rating factor that looks at three years of Workers’ Compensation history at a time. It’s based on how your claim history compares to other businesses of similar size and type of employees. 

Workers' Compensation Experience Mod

It may be a single number, but it can have a big impact on your premiums. Here’s what it looks like in practice. A Workers’ Comp experience mod of 1.0 represents the industry average. If your business has had greater than average risk, your mod would be greater than 1.0, thus resulting in a higher premium. Conversely, if your business has been performing better than expected from a risk standpoint, your mod would be less than 1.0, saving you money on your premium.

For example, say the average premium in your industry is $100,000 and your business has done a great job controlling its Workers’ Compensation risks, resulting in a mod of .75. Your adjusted premium would then be $75,000.

Mod of .75

What Can I Do to Control My Experience Modification?

Now that we’ve looked at what the Workers’ Compensation Experience Modification is and how much of an impact it can have on your premium, let’s look at how you can control it. Here are five steps you can take in your business to get your mod under control:

5 Steps to Controlling Your Experience Modification

  1. Self-inspect your workspaces or have an outside source conduct an inspection.
  2. Develop a safety program, educate employees on expectations and their responsibilities for safety, and document both. 
  3. Be sure to investigate accidents immediately and thoroughly. 
  4. Report all claims to your carrier right away, and bring any serious, potentially serious, or suspect claims to their attention.
  5. Take an aggressive approach to providing light duty to all injured employees upon their release from treatment and returning to work. 

Planning

How Do I Get Started?

It’s difficult to eliminate all the potential exposures workers face while providing valuable services to your patients. However, with proper planning and management, you can significantly reduce these risks, and more importantly, keep your employees safe.

There’s a lot to take in and consider. But, controlling your Workers’ Compensation Experience Mod, and therefore your premium spend, really comes down to good risk management practices and working with a partner who understands your unique risks.

At VGM Insurance, we have developed a proprietary Workers’ Compensation product specifically designed for the DMEPOS industry. To learn how VGM can help you reduce the risk of injury for your employees, reach out to your VGM Insurance Services account manager or contact us today at info@vgminsurance.com or 866-275-9531.

READ THE FULL ARTICLE HERE

VGM Playbook Forecasting 2023This article was originally featured in the VGM Playbook: Forecasting 2023. To read the full article and more like this, download your copy of the playbook today


TAGS

  1. forecasting
  2. playbook
  3. vgm

From Our Experts

Final Reminders and Tips for Focus at Heartland Conference 2024 thumbnail Final Reminders and Tips for Focus at Heartland Conference 2024 The 2024 Focus at Heartland Conference is quickly approaching, and VGM and Essentially Women are excited to welcome all attendees to Waterloo, Iowa, for two days of unlimited networking opportunities and industry-leading education. Collaboration in Women's Health and Post-Acute Homecare: Partner Connections at Focus at Heartland 2024 thumbnail Collaboration in Women's Health and Post-Acute Homecare: Partner Connections at Focus at Heartland 2024 This year at Focus at Heartland Conference, attendees can engage in a new opportunity for connecting with vendor partners on the final day of the conference. EW's Focus is at Heartland thumbnail EW's Focus is at Heartland VGM's Heartland Conference will host Focus at Heartland this year, a change that will allow organizers to “go above and beyond” what they offer women's health providers Heartland Meets Attendees Where They're At thumbnail Heartland Meets Attendees Where They're At In a strategic shift, the VGM Heartland Conference will open with a greeting from several company leaders to discuss initiatives geared toward helping their members grow. Connections, Community, and Innovation: The Focus at Heartland Conference's Networking Experience thumbnail Connections, Community, and Innovation: The Focus at Heartland Conference's Networking Experience The VGM Heartland Conference stands out as a premier event, celebrated for its exceptional networking opportunities and memorable social events. Understanding Compression Therapy: A Vital Approach for Wound Management for Venous Insufficiency and Lymphedema thumbnail Understanding Compression Therapy: A Vital Approach for Wound Management for Venous Insufficiency and Lymphedema There are various kinds of compression that can be used to treat wounds in the wound care field. DME: A Growing Industry Shaped by Changing Healthcare Landscape thumbnail DME: A Growing Industry Shaped by Changing Healthcare Landscape There is a tremendous reason for optimism in the durable medical equipment (DME) provider community today. It's a market that's poised to experience significant growth in the coming decade, driven by a myriad of compounding factors. Exploring Focus at Heartland Conference 2024: What's on the Agenda? thumbnail Exploring Focus at Heartland Conference 2024: What's on the Agenda? At Focus at Heartland 2024, taking place June 10-12 in Waterloo, IA, prepare for unparalleled educational sessions with our diverse array of specialized tracks that can help you get insights for your women's health business.