EMR For Beginners By a Beginner

What is an EMR? 

In a nutshell, your EMR helps determine how much you’ll pay in premiums to Labor and Industries (L&I). Sounds simple, right? NOPE! Once again L&I comes up with a jillion rules that makes this more complicated than it needs to be. For starters, I’ll define premiums because that’s largely what this post will be about. Premiums are basically the insurance you pay to L&I for workers’ compensation coverage. Companies pay premiums each quarter based on how many hours your employee works and how high or low your EMR is. 

The average baseline EMR is 1.0. Really, the only thing you need to remember is that a higher EMR = higher premiums and lower EMR = lower premiums. The lowest possible EMR for most companies is 0.6, but there is no limit on how high your EMR can be. The good news is that if you have bad claim, your EMR can only go up 25% per year. For example, if you have a catastrophic claim which negatively impacts your EMR (shocker right?) then your EMR will only go up 25% in one year. So, if your EMR is 0.6 and you are affected by a catastrophic claim, the highest your EMR will go is 0.75 for the next year. This 25% increase could continue for two more years until the catastrophic claim no longer affects you. 

How is EMR affected? 

As stated earlier, the basic idea is that a bad claim will make your EMR go up, and a history of minor or no claims will make your EMR go down. The kinds of claims that make your EMR go down are medical only claims. This means that when you have injured workers, you should have them work light duty or if they can’t work make sure that they are paid the same wages as if they were working.  

The two things that negatively impact your EMR are time loss and permanent partial disability (PPD). Time loss is what a worker is paid by L&I if they are off work (wage replacement), but PPD is much harder to describe. PPD is a way for L&I to pay an injured worker a lump sum of money to compensate them for a permanent disability in order to close the claim. 

Additionally, if you have no claims or just medical claims over three consecutive years, then you would qualify for L&I’s claims-free discount. The claims free discount will award you with an EMR that you wouldn’tbe able to achieve on your own, thus costing you less in terms of premiums.  

Conclusion 

Your EMR is crucial to your business. This is especially true in construction, which is inherently a risky industry, where the contracts a company gets are often associated with safety and lower costs. The lower an EMR you can achieve, the more competitive your bids can be, thus directly impacting your business’ success.  

For questions or concerns email alexkabacy@aspireconsultllc.com