As discussed in the previous post, Primary losses have a much greater impact on an Employers Experience Mod. Rating (EMR) than excess losses. The topic of primary losses is more important now because the "Cap" for primary losses will increase each year until it reaches $15,000 in 2016. This will negatively impact employers with larger claims and have a positive affect (reduce the EMR) for employers with good claims history.


Why EMR's will go up even though there is no change in claims history:

 

 

Claims activities stay on an Employers EMR report for 3 years. Using the example of an Employer that had a $20,000 claim during in 2012 to 2013 policy term (and remains claims free for the next 3 years):

  • The claim will be listed on the 2014 EMR with $7,500 applied to the primary losses and $12,500 to the excess column
  • By 2016, $15,000 will flow into the primary loss column causing an increase to the EMR.

The rational for the increase is that for much of the last 20 years, $5,000 (the previous primary loss "Cap") was in line with the average cost of a Workers’ Compensation claim. However, for the last few years, the average cost has far exceeded $5,000, due to wage inflation but primarily increased medical costs.

 

Call or email today for your Free Work Quotation: service@hebbeln-ins.com

Posted by Dan Hebbeln: dan@hebbeln-ins.com

 

 

 

 

Posted 7:00 AM

Tags: work comp
Share |


No Comments


Post a Comment
Name
Required
E-Mail
Required (Not Displayed)
Comment
Required


All comments are moderated and stripped of HTML.
Submission Validation
Required
CAPTCHA
Change the CAPTCHA codeSpeak the CAPTCHA code
 
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive


View Mobile Version