Experience Modification Rate

If you’re a small business owner, you’ve come to this realization – not only do you need to understand your product or service and how to target your market, but you face a ton of collateral technicalities. There are rules, regulations, and laws for nearly every possibility. Some of these protect consumers, others your employees, and some even protect you and your business.

There are laws, rules, industry guidelines, taxes, employee relations, and, perhaps most daunting, insurance challenges. Naturally, there are lots of different kinds of insurance. Property, liability, key-man, life and health, and workers’ compensation insurance are just some of the protections in which you must enroll.

Workers’ Compensation Insurance is unique in that it is a premium over which you do have some control. You can lower or raise your premiums by paying attention to your workers’ compensation claims.

We all know that claims for car accidents will raise your auto insurance rates. Well, workers’ compensation claims work in much the same way. One key score indicates what you’ll pay in premiums – the Experience Modification Rate (EMR).

What is your Experience Modification Rate?

The Experience Modification Rate represents the workers’ compensation actual claims made against your business by your employees. It tracks injuries that occur arising out of and in the course of employment. This doesn’t include slip-and-fall type claims or actions brought by customers.

In Ohio, the Bureau of Workers’ Compensation compares your number of claims against other businesses like yours in your geographical area. If you own a grain farm in Ohio, your claims will only compare to other grain farmers in Ohio. Comparison of this narrow class code determines your Experience Modification Rate.

There are three ranges of results in these comparisons. The average company has an Experience Modification Rate of 1.0. If the score is greater than 1.0, the business is a riskier bet and premiums are higher. A safer company has a rating of less than 1.0 and earns a lower rate

In these calculations, the government multiplies the actual losses by 100. Expected losses multiply payroll by the Expected Loss Rate of your class code and dividing the result by 100.

The scores indicate the number, type and funds paid for each incident. There are three variables that affect your EMR:

  •  Frequency of claims
  •  Severity of claims
  •  Payroll per $100

Again, like automobile insurance, a negative score stays around awhile. The data from actual claims reported to the National Council on Compensation Insurance remain for the past five years. Insurance agencies that sell workers’ compensation policies access and use that data from the three years ending in the prior year.

Controlling premium costs

The best way to control the number and types of claims is, of course, to ensure your employees work in the safest environment possible.

Employers need to pay attention to the risks of chemicals, the layout of the work environment, whether office furniture may cause back problems, or if the grinder at the quality control station has an adequate shield. Thousands of small things can cause real and significant injury.

Of course, no one wants an injury to happen to their employees. Employees are essential to your business, many of them may be your friends or family. Eventually, though, there will be claims, some minor and some major. A fire, an explosion or a chemical spill hurts not only the employees, the surrounding citizens and the business. Paying close attention to safety always pays off.

What is workers’ compensation fraud?

If an employee fakes sickness or injury to collect compensation from the employer or his insurance, that is a fraud. It is also fraudulent if the worker exaggerates an injury or claims that the claimant got hurt at your business when the injury took place before the claimant began working for you.

Some healthcare clinics are guilty of fraud when they exaggerate a workers’ condition to bill for more money than is fair recompense for the actual injury.

Fraudulent claims have been increasing due to economic hardships. It is common to see some types of frauds not work due to a supposed injury but work at another establishment while they are supposed to be unable to work at all.

Penalties under laws for fraud can range from a fine for a minor case to a felony conviction for the most egregious.

After an injury, you can still control Experience Modification Rate

There are two ways to ensure that a malingerer or con artist won’t make a claim. Particularly in a small business, it is hard to accuse one of perhaps five employees of cheating. It not only wrecks your relationship with one employee but likely every other worker as well.

You need to address the situation professionally and dispassionately.

Experienced private investigators who specialize in workers’ compensation and accident investigations take the onus off the business owner and leaves the matter in the hands of the experts who’ve seen it all and know how to proceed.

Private investigations use covert surveillance, background investigations and open source intelligence investigations to determine whether an employee is injured and how badly. Private detectives can blend into the background while recording instances that call a claim into question.

Using investigative services can protect your business against receiving untrue and unfair EMR scores. They can also help your business in other ways. Knowing you and your business, your practices and objectives will help them find other ways to protect you.

And remember, lowering the claims this year means reducing your premium costs next year.

Deciding whether to investigate a claim

There are two ways to go about deciding when to hire a private investigator. You can make it a company policy to investigate workers’ compensation claims every time in every instance.

If this is the decision, it is a good idea to use the same investigator for all claims. The investigating firm will become acquainted with your business and your risk exposure. Engaging in a contract agreement would be suitable for a larger company who wants an investigator to put their needs first and foremost.

Hiring the same investigator over time has two other advantages. First, you won’t have to feel embarrassed for starting an investigation against a friend or long-time employee. Second, you never know who will try to cheat. It is often one the owner would never suspect. By investigating each claim, the business safeguards its assets evenly and fairly.

On the other hand, you can decide to call in an investigator only when you think a claim may be false. There are many methods crooks use to falsify a workers’ claim against an employer. Here are just a few red flags to watch for that might mean fraud.

  •  When an employee makes a claim is an important clue and can raise suspicions. Dates just before or after a holiday, when the employee finds he will soon lose his job, or when he or she immediately hire an attorney or asks for a settlement, are all warning signs that the claim may be false.
  •  If the accident itself takes place out of view, is not recorded on security cameras, or if the claimant gives an inconsistent story are often clues that the worker is not telling the truth about an incident.
  •  The injury itself can point to a possibly false claim. Often, psychological or back injuries are the root of a fraudulent injury. Those are difficult to prove, thereby making them a favorite of scam artists.
  •  Hospitalizations are a common way for the dishonest employee to attempt to validify an injury. Private investigators can quietly and stealthily canvas the hospital to verify that the employee was injured as reported and did indeed spend the specified amount of time as an inpatient.
  •  Repeatedly avoiding medical appointments or calls from you or the insurance company is a big signal that the claimant may be falsifying the record.
  •  People who are faking injuries often doctor shop to find a physician who will go along with the illness or injury that they claim.

Other warning signs may point to a dishonest workers’ compensation claim. Dozens of shady practices come to light during investigations. Hiring an experienced private investigator to study the claims against your business might quickly repay any investment by lowering your EMR.

Fighting a claim and winning

Most of the states in the US allow employers to fight an employee’s workers’ claim. Every state differs on which legal venue is proper and what proof it requires. Experts who work with workers’ comp claims in your region regularly are good sources to use. They know where to go and what proof to present.

Other good reasons to lower your EMR

When bidding for jobs or trying to lure a big potential customer or client, they will want to see your safety record. After all, if you are seeking to build a large office building, that score will tell the potential client a lot about your commitment to safety. That commitment will let them know whether you are a trustworthy contractor. Government contracts may require an EMR score below a certain limit.

So, what are you waiting for?

Effective Return to Work (RTW) Programs

Companies of all sizes should have return-to-work (RTW) programs in place. When an injured employee makes a seamless transition back to full duty, everybody wins.

Ideally, RTW programs (sometimes called modified duty, light-duty and transitional duty) are launched with extensive training in how to avoid injury in the first place. The best time to implement a program is before someone strains a back, takes a hard fall or inhales toxic fumes.

Still, it’s never too late to put safety first.


Workers who were hurt or made ill on the job need time to get up to speed. Good programs help employees ease back into full productivity without reinjury.

During recovery, light-duty jobs are modified to accommodate physical limitations.

It’s true that RTW programs require planning, collaboration, and training. They take time to develop. But, their success is a product of trial and error.

However, companies that design effective programs are never sorry that they did. Boosting productivity, morale and the bottom line always pays off.

Benefits for Employers

The biggest perk for employers is a reduction in Workers’ Compensation costs. According to the Bureau of Labor Statistics, payments to injured or sickened workers approached a whopping $40 billion in 2015.

Injured employees who return to work even part-time collect fewer benefits.

Also, Workers’ Compensation premiums are often the largest expense after payroll. Keeping accidents and injuries to a minimum keeps premiums in line.

Effective RTW programs also limit fraudulent and abusive claims. If your boss were genuinely interested in your recovery and accommodated you with light duty, wouldn’t you be less inclined to scam him?

Along the same lines, private investigation is rarely called for when employees get back to work quickly.

Even a little productivity is better than none, and retaining good workers saves a fortune in hiring and training costs.

For all these reasons, RTW programs make good business sense.

Benefits for Employees

Continuing to earn income — even if wages are temporarily reduced for light duty — keeps food on the table. There are also physical and psychological benefits.

Private investigation usually exposes injured workers who attempt to cheat the system, but it sometimes reveals just how isolating and depressing a serious injury can be.

Experts agree that returning to work, even on a limited basis, speeds recovery. Purpose, socialization and a sense of one’s own value have a positive impact on health.

Making RTW Programs Effective

The hardest part is getting started, but employers who drag their feet could soon find themselves out of business.

It’s a collective effort. If you’re in safety, risk management, Workers’ Compensation or law, business owners and executives could use your help.

Here are some factors that distinguish truly effective programs:

Safety is ingrained in the workplace culture.

What does that look like?

The best programs are a valued part of the company culture just like teamwork or work-life balance.

Time and financial resources are invested in safety. Training is thorough and unrushed. Safety is the first item on the agenda of every meeting.

Safety is a condition of employment, and there are consequences for violating rules. Workers are comfortable pointing out unsafe conditions or behavior.

Licenses and certifications are current. There are high standards for documenting injuries.

Not surprisingly, injury rates are low or nonexistent.

Everyone is on board.

Management is 100% committed, and workers at all levels know that their superiors embrace safety as a core value.

It takes a natural leader with an engaging personality to make that happen.

Hazards are identified and addressed.

New companies identify jobs, equipment or workspaces with high potential for injury. Older companies review their history to pinpoint the most common injuries and find out how they occurred.

The RTW team brainstorms about ways to protect workers in those positions. Certain jobs may be modified. Safer equipment might be installed. Training may be reevaluated.

This is a great time to ask at-risk employees for suggestions.

Thorough job descriptions are published.

Existing job descriptions include duties, physical requirements and functional requirements such as standing or heavy lifting.

Planners have even thought of ways to convert existing jobs to transitional duty.

For instance, a kitchen steward with a back injury shouldn’t lift 50-pound bags of rice, but there are plenty of onions to chop and potatoes to peel. There may even be bigger fish to fry.

Jobs have also been cobbled together for alternate duty. Ideas include oiling machinery, taking inventory, labeling shelves, answering phones, ordering supplies, making copies and monitoring security video.

These transitional jobs may be rough sketches, so to speak, but they’re down on paper as possibilities anyway. That shows employees that management will do its best to accommodate them.

RTW-minded managers also consider injured workers for vacant positions.

There’s a designated liaison.

A compassionate, organized person who likes working with people acts as a liaison between injured workers, managers, and doctors. Someone who hopes to partner with a doctor is ideal. Third-party administrators (TPAs) can be that solution – there to keep in close contact with all parties and keep the program moving forward.

RTW policies are published and distributed.

Company policy clearly defines expectations for both managers and workers. Everyone has a copy.

Workers know how and when to notify the company of injury. Contact numbers are provided.

Employees are familiar with the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA). Where workers’ compensation is concerned, they understand both their rights and their accountability.

Effective RTW programs are fair to everyone.

Evaluation metrics are in place.

RTW coordinators track results – bigwigs in corner offices dig that stuff.

Executives or small-business owners comply with municipal, state and federal laws.

Compliance is a lot more complicated than most suits or entrepreneurs know. The importance of working with an attorney can’t be overstated.

The High Cost of Complacency

The cost of keeping workers safe and active is a drop in the bucket compared to the cost of settlements, high turnover rates and lost productivity.

Employers simply can’t afford to be complacent.

Workers’ Compensation Glossary of Acronyms:

Having been an investigator in the Workers’ Compensation (WC) industry for almost 15 years, IMHO, I come across quite a bit of industry jargon – an alphabet soup of acronyms only trumped by the federal government. SMH.

If you’re new to the industry, or need a refresher, here’s a list of terms YSK:

AOE/COEArising Out Of Employment/In the Course Of Employment
AWWAverage Weekly Wage
BWCBureau of Workers’ Compensation
DOL/DOI/DOA Date of Loss/Date of Injury/Date of Accident
EMR/MOD RATE Experience Modification Rate/Experience rate used in determining WC premiums
EOREmployer of Record
FROIFirst Report of Injury
ICIndustrial Commission
IMEIndependent Medical Exam
IWInjured Worker
LDLight Duty
LTLost Time
MCOManaged Care Organization
MDOSModified Duty Onsite
Med OnlyMedical Claim Only, No Lost Work Time
MEDCO 14Ohio’s specific Physician’s Report of Workability
MMIMaximum Medical Improvement
NCMNurse Case Manager
PIPrivate Investigator
PORPhysician of Record
PTPhysical Therapy
PTDPermanent Total Disability
RTWReturn To Work
SISelf Insured
SIUSpecial Investigations Unit
STDShort Term Disability
TPAThird Party Administrator
TTDTemporary Total Disability
Voc/Voc RehabVocation Rehabilitation (training to do another job)
WCWorkers’ Compensation

Designing Workplace Safety Incentive Schemes That Work

As a private investigator, I’ve seen first-hand the costs of workplace accidents, and the challenge of trying to reduce them.

While my role focuses primarily on eliminating fraud, waste and abuse on the back-end of claims, increasingly, employers are looking for ways to address workplace safety issues before they arise, not least through incentive-based schemes.

In this post, let’s look further at those incentive mechanisms, and the factors likely to determine whether they succeed or fail.

Carrots and Sticks

Numerous academic studies have examined how incentive-based mechanisms can drive behavioral change. But we see it just as readily in everyday life: the parent trying to encourage their child to behave; the supermarket loyalty card encouraging us to spend; the health insurance policy that rewards healthy eating.

In a workplace safety context, the main objective and benefit of incentive-based schemes is to cut workplace accidents. This has clear financial and reputational benefits for an organization. But many say the benefits extend further, to improvements in employee morale and engagement.

Of course, not everyone is convinced. Some believe incentive schemes encourage underreporting and cover-ups. Or that they lead to ‘box-ticking’, with employees focusing solely on what is needed to gain a reward, without buying in to the underlying reasons for good safety practices.

Designing your scheme to succeed.

What is clear is that an incentive scheme’s design is central to whether – in the short- and longer-term – it succeeds.

But what makes a well-designed scheme?

One piece of the puzzle

Any compliance scheme is likely to be successful only if it is built on solid foundations: on processes, systems and training that promote compliance and reinforce the importance of workplace safety. But I believe incentive schemes are at their best when they’re part of a package of complementary accident-reduction measures and are integrated into the organization’s broader values and risk management, thereby reiterating to employees that management regards workplace safety as being just as important as other commercial risks.

Head to Toe Engagement

As with much in the modern workplace, ‘top-down’, visible senior-level buy-in is vital.

Vital, but not sufficient.

Rather, successful schemes tend to be those that also involve some element of ‘bottom up’ and give employees themselves a role in the scheme’s design.

This can create a sense of ‘employee ownership’ over the scheme, as well as showing the organization’s willingness to listen to their views. But most critically, it increases the likelihood that the scheme focuses on the things that actually incentivize good practice by employees (not just what management thinks would incentivize them!)

Aligning incentives

Incentive schemes live or die by the incentives they create.

Creating the right alignment of incentives is no easy task, particularly in large, diverse organizations. But a good start is always to ask yourself the right questions:  what behavior are you trying to promote; when will rewards for ‘good behavior’ be given, and what rewards will they be?

The right behaviors

Ask yourself:

  • What behavioral changes are needed, and where?
  • What incentives need to be created to drive that change?
  • Are those incentives the same for all my staff?
  • How can I incentivize ‘bad apples’ to meet basic standards, but also reward ‘star pupils’ who go above and beyond? 
  • How can I avoid my scheme being ‘gamed’, incentivizing underreporting, or becoming a ‘box-ticking exercise’?

Whether you employ five people or 5,000, it’s these questions that hold the keys to designing a scheme that truly works for you organization.

The right thresholds

Getting the criteria for rewarding behavior ‘just right’ is that classic Goldilocks problem. Too tough and employees may think there’s so little chance of reaching the targets that it’s not worth trying to achieve them at all. Too easy and there’s no real incentive for employees to push beyond that low bar.

The right rewards

Choosing the right reward is vital. If an employee doesn’t – for whatever reason – value the ‘prize’ being offered – what motivation do they have to try and obtain it?

It may be tempting to turn immediately to monetary payments, rather than prizes that not everyone might value (sports tickets, alcohol, etc).  But cash incentives come with their own particular challenges. For example, if employees see them as really just a payment for work (or, worse still, a ‘bribe’) they might actually see the scheme as something negative – just as you might genuinely appreciate a friend’s offer to drive you to the airport, but be somewhat offended if they simply offered to pay for a cab to take you there instead.

That doesn’t mean there aren’t myriad potentially effective alternatives, though. One-off ‘experiences’, prize draws, a donation to the employee’s chosen charity, a paid afternoon off – each could work.

Your best bet? Think about your employees. Listen to what they tell you they value.

Schemes in practice – being clear, playing fair

Even the best designed schemes can come to nothing if implemented poorly.

Two aspects of such implementation that studies suggest are particularly important are transparency and fairness.

Transparency is, in part, about little things like publicly celebrating those receiving rewards. But mainly, it’s about ensuring the scheme is well publicized and that its key parameters are clear to employees – What are my targets? Who decides if I’ve met them? On what basis? –

Fairness, on the other hand, focuses on the almost primal importance we place – inside and outside work – on feeling like we’ve been treated fairly. That instinct makes it critical that any scheme is applied – and is seen to be applied – consistently, and without bias or arbitrariness.  

If employees don’t believe they have a ‘fair shot’ at a reward, it not only disincentivizes them from trying to attain it, it risks breeding a more general resentment that could have far wider effects on employee engagement.

None of this is easy.

Incentives schemes aren’t a ‘silver bullet’. 

But if well-designed, and carefully implemented, they can certainly make their mark. Not just on an organization’s safety incident rates, but on its reputation, its employee relations, and – ultimately – its bottom line.

Do NOT Call Me If…

In the past, I’ve written about what private eyes can do. But some still don’t know.

Many ask if I will do illegal or unethical things. I won’t.

Stop calling me.

In fact, do NOT call me if:

1. You want a hidden GPS unit installed on your spouse’s car. It’s illegal unless the car is owned by you (the person making the request) and you’ve signed my contract allowing me to do it.

2. You want me to wiretap a phone or bug your house. Under Federal law, at least one-party must consent to recorded phone calls. It’s why you hear, “This call may be recorded for quality assurance or training purposes,” on many customer service lines.

3. You want to know how much money is in a person’s bank account. Under the Gramm-Leach-Bliley Act, accessing bank account information as a third-party without consent is illegal. Meaning, I won’t use social engineering, pretexting, or phishing to access this information.

4. You want a credit report or credit score. It’s illegal for a private investigator to access credit history without a consent form. For employment and tenant screening purposes, the Fair Credit Report Act allows access, but without a signed release, no luck.

5. You want me to friend-request someone on social media to access their private information. If it’s not publicly available, we won’t do it – it’s an invasion of privacy.

6. You want videotape inside a private location. Again, an invasion of privacy. Filming through a house’s window or while on private property is off limits. Public venues like grocery stores, sporting events, parks, or shopping malls are okay.

7. You want medical records. Ever heard of HIPAA?

8. You want access to private info on a cell phone. Again, without consent, I can’t get access to texts, emails, phone call logs, pictures, or anything else.

9. You want me to arrest someone. Isn’t this obvious? I’m not a police officer. In fact, it’s illegal for private eyes to carry badges, impersonate law enforcement officers, or even allude to being cops.

10. You want me to break into private property. It’s called trespassing and it’s illegal.

11. You want me to compromise my integrity. In addition to running a successful business, I’ve been practicing investigative work for over 12 years, I have secret clearance and a Master’s degree.

My clients include law firms, insurance agencies, risk management companies, and specific individuals.

Most importantly, I’m a father of two boys. If you think you can get me to do something illegal that’ll tarnish my reputation with them, think again.

Don’t Call.

Old School vs. New School

REVISED: You can’t succeed as a private eye if you’re not constantly learning. Ditch some of your old school ways and find the new stuff!

I’m A Private Eye Looking For A Stealthy Ride For $20,000! What Car Should I Buy?

I need a new car.

But, I hate car shopping.

So, I asked my fellow bloggers and car junkies at Jalopnik, “What Car Should I Buy?”

It’s a weekly segment they do: these dudes (NOT SALESMEN) help REAL people find ACTUAL cars for sale.

And then they hilariously write about it.

Check out their advice for me.

Tell me which one I should BUY in the COMMENTS below!!

Click here to read the story:

Which one should I buy? Reply in the comments!

  1. 2013 Toyota Siena
  2. 2016 Chrysler Town and County
  3. Toyota Avalon
  4. 2013 Suzuki Kizashi
  5. 1998 Jeep Grand Cherokee 5.9 Limited
  6. Ford Mustang

The 13 Essential Qualities You Want When Hiring a Private Eye

So you Googled “private investigator” and found a handful of web pages that look like they haven’t been updated since 1995. On one site, a guy was even wearing a trenchcoat and fedora. Ugh…NEXT!

You’ve never hired a private eye, so you have no clue what to look for. But some of the bios sound promising. Former law enforcement? Sure, that’s nice. A college degree? Great. Years of experience? Excellent!

But what about the stuff you can’t include in a resume? What intangibles make a good private investigator great?

After working for a decade with some of the world’s best private eyes, I came up with some answers. Read more

Grown Men Call Me To Cry

What if…

… you fell in love with someone?

… married that someone?

… bought a house together?

… raised a family together?

… and spent years together?

And then, what if…

… that person cheated on you?

… and you found out?

What would you do? How would you feel? Who could you talk to?

I’m a private investigator and grown men (and women) call me to help them solve their domestic problems. They believe their spouses have been unfaithful, and they need answers. There was no one else to talk to, so they call me…

… and cry.

Divorce is emotional, and my clients get a chance to talk to someone who’ll listen to them, often for the first time. That’s how I help: I listen empathetically. I’m half therapist, half monk.

What’s the simple prompt that elicits that response?

“Tell me your story.”

That’s it.

They’ll start off strong, but get unsettled. They’ll attempt to gather themselves with a deep breath, voice trembling, but even over the phone, you can hear the tears falling.

After I listen deeply, my next questions will be:

“What solution would you like to see?”

“Would you like to get back together?”

“Have a happy ending? Or a bad ending?”

“Do you want custody of your children?”

I’ve heard the answers many times before. Not only that: I understand the divorce dynamic, the emotions involved, how it affects the couple’s mental health and the kids.

My parents divorced when I was a teenager, so I get it. It’s tough. Divorce is something we’ve all been through. If not, we know someone who has.

Many times, husbands and wives don’t need my help. They just need my advice.

Most troubled marriages have one glaring problem: a lack of communication. If you suspect your spouse is cheating and you muster the courage to talk to them and ask them about it point-blank, they might actually confess.

It has worked. You’d be surprised.

Other times, I need to get involved. You don’t want that. I don’t want that.

Despite the countless benefits to hiring a private investigator, we only get involved when absolutely necessary.

But until then, I’m listening.