E-Mods: Your E-Mod is the key to understanding your premium
You’ve probably checked your home’s indoor temperature on a hot summer day. Maybe lowered the thermostat to cool the house. Maybe pulled the blinds to cool some rooms.
Your organization’s e-mod number needs periodic checking, too. It’s an indicator of your costs for work injuries, and it may be higher than you want.
By taking steps to reduce injuries and their costs, you lower your e-mod number and you make a direct, positive impact on your workers’ compensation premium.
Many companies are doing that. They keep their premiums down by keeping a close eye on their e-mods, recognizing the things that impact it, and knowing how to respond when e-mods creep up.
What they’ve come to realize is that these approaches often lead to different ways of looking at decisions involving employees.
The lower, the better
Your experience modifier, or e-mod, is a number that shows how your organization’s workers’ compensation claims experience compares to the experience of other businesses similar in size and types of jobs.
The average for similar businesses is exactly 1.0. If your e-mod is less than 1.0, then your claims experience is better than the average. If it’s more than 1.0, then your experience is worse than the average and probably worse than many of your competitors — so you may have catch-up work to do.
Your e-mod number is a multiplier used in calculating your premium. An e-mod less than 1.0 directly reduces the premium amount you pay. The lower your e-mod, the greater the reduction. See “The difference an e-mod can make” below.
You, the employer
Your objective is doing what is reasonable and necessary to prevent injuries and to minimize their costs when they occur.
Most companies successful at preventing injuries have these practices in common. They:
-Are responsive to safety throughout their organizations. This shapes safety culture. It influences employee work behaviors. Typically, the many accountabilities for safety are coordinated by one or two safety point persons.
-Hire with safety in mind.
-Put into writing the kind of safety-focused organizations they are.
- Regularly train employees to work safely.
For more, a good resource is the “Guide to successful loss prevention” CompTalk, which can be downloaded or ordered through SFM’s Resource Catalog at sfmic.com.
For more information on your e-mod, feel free to contact us.
Article excerpt © 2016 SFM MUTUAL INSURANCE COMPANY