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they know the job better," says Burton. It's true that older workers when they do get injured often have costlier injuries because they do not heal as quickly as younger ones, notes Burton. However, this is offset by the fact that older workers tend to be higher paid and this correlates to higher premiums being collected in the workers compensation system. "In the aggregate, older workers do not adversely affect the costs of workers comp," says Burton. INSTALL SAFETY PROGRAMS Given that the x-mod rating is based on an employer's accident record, it is wise to put an emphasis on workplace safety, says Burton. "The message to the employers is this: Clean up your act, have a safe workplace and you are likely to reap greater benefits under the revised experience rating system." Undertake a program of constant safety vigilance. "Hold a monthly meeting during which you review every single accident and near-miss accident," suggests Salazar. "Investigate every event and develop a corrective strategy so the accident does not happen again to that employee or another worker." The response might be something as simple as fixing a hole in your parking lot. Many employers have redesigned their workstations and have introduced stretching and exercise programs to assure good employee health. "Strains and sprains, and slips and falls are the most common claims in the workers comp industry," says Salazar. "They can be engineered out of the workplace." Wellness programs can also play a role. "My sense is that there will emerge a body of data that links effective wellness programs with effective safety programs," says Gregory & Appel's Ahlrichs. "The combination should produce a great result on workers comp costs. Right now it's difficult to find supporting data, but it makes sense that a company with a focus on safety and well-being will gain a competitive advantage." BACK TO WORK Another good technique is to have early return-to-work programs for employees who have been medically restricted by physicians. The trick here is to identify alternative positions for which the injured worker is capable. "Suppose the worker has a medical restriction such Calculating the New X-Mod Workers compensation premiums are rising at a rate of between 2% and 5% in many states this year. Reason? Several factors. One is the rising cost of medical care, translating into higher costs to return injured workers to health. Another is the departure from the market of some multiline insurance carriers, reducing competition for employers. There's also a third factor: a change in the calculation for the "experience rating modification" factor, or x-mod, which is assigned to each employer. A higher x-mod translates into higher workers compensation premiums. The details of the change in the x-mod calculation can be found at the website of the National Council on Compensation Insurance (ncci.com). Click on "Experience Rating Split Point" at the lower right corner of the screen. When calculating an employer's x-mod, the states will look at three years of losses and payrolls. However, the most recent year is excluded. "The reason for that is that when a claim is made no one can predict the cost of the claim and set money aside to pay it," says Mike Salazar, vice president and manager of client services at Gregory & Appel. "The reality is we have to see how the claim settles out." Expect more costly x-mod adjustments ahead. "It is significant that the split point will continue to rise," says Salazar. "It will move to $15,000 and adjust for inflation in future years." Rising costs in workers comp seem to have the greatest effect on employers without the resources to institute safety programs or which have especially high costs of labor. "My experience has been that small businesses have a tough time absorbing these cost increases," says Salazar. 92 August 2013 | beautystorebusiness.com