Filed Under:Risk Management, Loss Control

How Employers Can Stay Sane in Challenging Workers' Comp Climate

Costs Are Up, But These Practices Will Keep Companies Afloat

This year brings a host of changes in workers compensation of particular importance to businesses, especially in terms of controlling costs. Experts seem to disagree as to which of these changes will have the most impact. However, they all agree on one thing: workers’ compensation insurance is going to be insane in 2014. 

In many states, rates will increase as the amount of money the insurance company charges for workers’ compensation continues to rise. However, this is not universal. Businesses in some states can actually expect slight decreases. But don’t get too excited. Even in these outlier states, insurers are being much more selective about what companies they choose to insure. What these rate increases mean is that you will be writing a bigger check for workers comp in 2014, even if your business hasn’t grown substantially.

The key thing to know about this change is that it will in all cases reduce your minimum mod to the lowest experience mod that you can have, and because of this your business now has more control than ever in reducing your experience mod and controlling what you pay for workers’ compensation.

What Companies Can Control

Also critical in managing your experience mod is understanding how the experience mod actually works. This is something you should discuss in detail with your insurance agent so you can better understand how employee injuries impact your experience mod and how much higher your costs are because of each individual employee injury.

A substantial part of the experience mod calculation is the classifications of your employees. In NCCI states there are nearly 700 employee classifications and knowing that your employees are classified correctly is crucial in ensuring that the check you write is the correct amount and not more than it should be.

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