Safety And Risk Management Departments – Worth The Expense?
During workers comp premium and review audits, I have pleaded with companies to keep their risk management and safety departments as fully staffed as possible. Workers Compensation safety and risk management departments have been pared to the core during the great recession.
One of the reasons is there are no tangible effects that can be easily measured. Workers Comp is a lagging system meaning that results for a great safety and/or risk management program usually show little effect for at least 18 months. The full effects will not be known for up to 54 months.
The bell is now going to toll for companies that greatly reduced or eliminated their risk management and safety programs. The NCCI has changed the rules of how Workers Comp E-Mods (Mods) are calculated for each insured.
The primary loss portion of the claims is going to increase from:
- $5,000 to $10,000 in 2013
- $10,000 to $13,500 in 2014
- $13,500 to $15,000 + an unknown inflation factor in 2015
I pulled data from one of our clients and simulated what their E-Mod would look like under those circumstances. There are three articles on what their new E-Mod with the changes. It was not pretty. Click on each bullet point numbers to see the effects of the upcoming NCCI changes
Basically, the NCCI has sent a message to unsafe higher E-Mod employers that they are going to have a much increased E-Mod and will be paying higher Workers Comp premiums.
The easiest way to avoid being thrown into the coming E-Mod hurricane is by not having any accidents – plain and simple. The E-Mod systems are designed to not punish employers that have one bad accident. However, accident repetition is going to cause any employer to write massive premium checks in the future.
Any employer that reduced their claims or risk management staff should reconsider that tact. I do realize these are hard times. Safety and risk management departments are golden to employers for the next four years.
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