Ohio is one of a handful of states that has a state administered workers’ compensation system. The  Bureau of Workers’ Compensation (BWC), established in 1912, is the largest state-operated provider of  workers’ compensation insurance in the United States. 

An employer’s experience modification rate (EMR), which is determined by the BWC, greatly impacts  workers’ compensation premium that an employer pays. If you have a safe organization, with little to  no workers’ compensation claims, you will have a better than average EMR. If you have a less safe  organization, with numerous costly claims, you will have a worse than average EMR. Typically, the  better your EMR, the lower the premium that you will pay to the BWC.  

The BWC uses your historical payroll, industry type and claim costs to determine your EMR. A business with claim costs that are typical for their size and industry, will have an EMR of 1.0. If the business has  lower claim costs than typical, their EMR will be below 1.0. If the business has higher claim costs than  typical, their EMR will be above 1.0. The lower the EMR, the lower the premium that will be paid compared to similar business. The higher the EMR, the higher the premium that will be paid compared  to similar businesses. 

Additionally, the lower your EMR, the greater likelihood that you will qualify for higher discounts  through group rating programs and group retrospective rating programs. These programs allow  employers to band together to receive additional discounts or rebates on their premium. Discounts  and rebates can exceed 50% of the premium that you pay to the BWC.  

An employer’s EMR is based on claims that occurred in the past compared to historical payroll. Your  payroll is categorized by your industry type. To lower your EMR, you must reduce claims and claim  costs. The best claim is one that never occurs. A robust workplace safety program can limit future  claims from occurring which will ultimately improve your EMR.  

If your organization does have a claim, there are several strategies that you can implement to help  reduce the overall cost in the claim. Every claim is different, but generally, getting injured workers  healthy and back to work safely and quickly, will keep costs down. There are many additional strategies  that can be enacted to reduce or lower costs in a claim that has occurred. Partnering with your  managed care organization and your third party administrator will help determine the best strategies  for a specific claim. 

From safety programs to claim cost containment strategies, there are many tools to assist with reducing  your EMR and your premium. Beyond any potential premium reductions, keeping your employees safe  is simply the right thing to do. By using the many tools available to you, our hope is for your employees  to return home from work in the same healthy condition that they arrived to work. 

If you have any questions, contact our Sedgwick program manager, Julia Bowling, at julia.bowling@sedgwick.com or ph 513-218-4062.

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