BUSINESS: Medical laboratory
THE CHALLENGE: When it comes to workers’ compensation, a company’s experience modification rate, or E-Mod, can be the difference between night and day, profit and loss, exotic travel and staycations. A national workers’ comp rate-setting body determines a company’s E-Mod based on its record of injury claims in the workplace. A higher E-Mod – anything above 1.0 – isn’t what anyone wants. A lower rate, conversely, helps lower premiums. Our client – a prospect at first – was spending roughly $50,000 a year for workers’ comp insurance.
OUR SOLUTION: We all know what good service at, say, a restaurant feels and looks like. It’s about attention to the details. Like not letting your water glass go empty. Like making sure the food arrives at your table while still hot. In workers’ compensation, it’s all about getting your workforce classifications just right.
Our lab client’s premium was based partly on the idea that it employed physicians who saw patients. In fact, the docs never saw patients. The premium also was based on employees who were classified as drivers, clerks and sales people. We reclassified all of the employees to a new, all-inclusive job code that covered all of their duties. In other words, we were dealing with a company whose premium was based on a series of misclassifications – and, as we discovered, it had been costing the company a good deal of money for more than 20 years.
THE OUTCOME: About $30,000. That’s how much we were able to save our client on its workers’ comp premium compared to what it had been paying. Better still, we were able to secure it a refund from the insurer on the amount it had overpaid for two years. Its E-Mod went from 1.13 to 0.85, about a 25% drop. That included a 5% saving secured simply because we took notice of the stringent safety standards set by the lab’s national accrediting body. Those standards surpassed Colorado’s own Department of Labor guidelines, earning it the extra rate reduction after years of unnecessarily paying more than it should have.