Complimentary Webinar: Using Not-for-Profit Organizations as a RTW option

Are you or your clients interested in learning about a new and innovative RTW solution?  Sign up for a complimentary webinar being offered by Eastern Alliance Insurance Group's Return to Wellness Specialist, Sarah Tayts. 

WHO:     This presentation is open to all EAIG agency partners and EAIG clients.  Please feel free to forward this post via email to anyone you believe would benefit from attending this presentation.  You can do this by clicking on the envelope icon located at the bottom of this post, or simply copy/paste the URL to this post into a separate email.


WHAT:     The presentation will highlight how to strategically use NFPs to solve even your most challenging RTW situations, as well as address the most common questions regarding the process. 

WHEN:     Wednesday, December 4, 2013 @ 10 am EST

HOW:     Register for the webinar by clicking here and completing a basic registration form.  For more information on how to get the most out of the GoTo Webinar session, you can click here to view a brief PowerPoint tutorial.               

In the past, this presentation has been very well attended, so be sure to register now to reserve your spot!

The Mod Squad: RTW and Experience Modification Factors

We sat down with Karinda Greo, Eastern's Operations Analyst to discuss the intricacies of experience modification factors (herein known as EMF) to determine what impact RTW can have on an employer's EMF. 

If you're an Eastern client or agency partner who is interested in learning more about how you can control your EMF, register for our webinar, Experience Mod 101, that is set to take place on 3/27 @ 10 am!

Now, back to the interview...

What does the employer’s EMF represent?

The employer’s experience modification factor predicts, based on past experience, whether the employer is likely to develop loss experience that is better or worse than average. A period of 3 years of experience is considered, excluding the most recent policy term. For that time period, the employer’s claim data is compared to the average claim data for employers of similar operations and size. If the employer’s claim experience is worse than average, an EMF of greater than 1.0 is generated and acts as a surcharge to the workers compensation premium. If the employer’s claim experience is better than average, an EMF of less than 1.0 is applied to the premium and provides a discount. Keep in mind that since 3 years of experience is considered, each claim impacts the employer’s EMF for three consecutive years.

What impacts an employer’s EMF more: frequency or severity? 

In NCCI states, frequency definitely impacts an employer’s experience modification factor more than severity. The NCCI calculation uses a split point where all claim dollars below the split point are considered primary (frequency driven) and all claim dollars above the split point are considered excess (severity driven). The excess claim dollars are heavily discounted in the final calculation. Currently, the split point is transitioning from $5,000 to $15,000 over a 3 year period. Most states are around $10,000 today. Consider Employer A with one $40,000 claim; and Employer B with 4 claims at $10,000 each, totaling $40,000. Each has the same amount of total losses, but Employer A would have a lower EMF because the first $10,000 would be included at full weight, and the remaining $30,000 would be discounted as excess. Employer B would have a higher EMF because each claim would be counted as primary, resulting in $40,000 included at full weight in the calculation.

In PA and DE, the impact between frequency and severity is more even. Both states apply a cap instead of a split point. All claim dollars in excess of the cap are excluded entirely from the EMF calculation. The current cap for PA is $42,500, so the impact of highly severe claims is reduced. For example, if an employer has a $50,000 claim, only the first $42,500 is included in the EMF calculation. The remaining $7,500 is excluded. In the case of Employer A and Employer B described above, however, there would be no difference in the EMF as the full $40,000 would be included in the EMF calculation in both cases. The cap value for DE ranges from $31,000 to $470,000 and depends on the classification and size of the employer. The largest employers with the highest rated classifications will have the highest cap values.

How does the impact of lost time claims differ from medical only claims in the calculation of an employer's EMF?

In NCCI states, lost time claims have a much greater impact on the EMF than medical only claims. In fact, medical only claims are reduced by 70% in the NCCI calculation. For example, a $10,000 medical only claim counts as $3,000 in the EMF calculation. Lost time claims do not get discounted.

Upcoming Webinars for PA CE Credit

We are pleased to offer 2 FREE Webinars for CE credit

To register for the webinars, please review the flyer and complete the registration form.

April 18th:  Controlling Workers' Compensation Insurance Costs (1 CE credit)
10:00 a.m. - 11:00 a.m.
Presented by Matt Sinosky, Marketing Representative and Rob Reale, Director of Underwriting



April 19th:  Workers' Compensation and Return-to-Work: What, Why and How (1 CE credit)
10:00 a.m. - 11:00 a.m.
Presented by Sarah Tayts, Return to Work Specialist

We look forward to your participation!