Experience Modification Factor Essay

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Modification Factor



Discuss with the safety manager what an experience modification factor is, explain the significance of the organizations experience modification factor rate of 1.80 and discuss how the lack of return to work programs and initiatives has contributed to this modification factor



An experience modification factor is a factor that is calculated for every employer who qualifies, characteristically premium over and above $10,000 or a three-year average premium of $5,000, depending on the state that the employer is in. The modification factor is a value that makes a comparison between the claim profile of the employer and the claim profile that would be anticipated and projected of an employer of the same size or payroll in the similar industry. The experience modification factor rate of 1.80 of the organization is significant to the safety manager (Risk Administration Services, 2016). To begin with, an experience modification factor value of 1.00 is average, and this implies that the rate of recurrence and severity of actual losses is the same as the expected losses. On the other hand, a modification value factor that is less than 1.00 is indicative of an employer's losses being better in comparison to the expected losses in the rating period. However, in this case, the factor value of 1.80 is greater than 1.00 and therefore its significance is that the employer, safety manager, experienced worse than the expected losses in the course of the rating period (Risk Administration Services, 2016).

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The lack of return to work programs and initiatives has contributed to the high modification factor. This is largely due to the fact that for the organization, the temporary disability is charged in their experience rating system. Therefore, this implies typically, that one employee being given two-thirds remuneration on a transitory disability benefit will cost the organization about two to three times his or her salary. The lack of such programs and initiatives costs money to the organization, thereby increasing the experience modification factor (Ceplenski, 2014).



Explain the benefits of an effective return to work program and explain how this may positively impact the injured workers and the organization



Return to Work programs are purposed and designed to assist employers to obtain prospects to bring their injured employees and personnel back to work at the soonest time possible. This is regardless of whether it implies altering their work responsibilities up until the time they can get back to their normal work duties and responsibilities. One of the main benefits of Return to Work programs is that they aid employers to save money. This encompasses the manner in which such programs have a significant influence on the organization's experience modification rating. As aforementioned, experience modification signifies either a credit or….....

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References


Ceplenski, C. (2014). Benefits of a return to work program for employers, supervisors and employees. HR Daily Advisor. Retrieved from: http://hrdailyadvisor.blr.com/2014/01/31/benefits-of-a-return-to-work-program-for-employers-supervisors-and-employees/

Lanier Upshaw. (2016). The Benefits of Return to Work Programs: For Employers and Employees. Retrieved from: http://www.lanierupshaw.com/2014/06/the-benefits-of-return-to-work-programs-for-employers-and-employees/

Risk Administration Services. (2016). Understanding Your Workers' Compensation Experience Modification. Am Trust Group. Retrieved from: https://amtrustgroup.com/Amtrust/media/Amtrust/Documents/Loss%20Control%20Docs/Understandingyourwcexperience-1.pdf

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