Many may think that nursing homes are a low-risk work environment, but this is far from the case. In fact, according to the Bureau of Labor Statistics, nursing homes experience some of the highest rates of injuries when compared to other industries such as mining, construction, and manufacturing. Part of the reason for the high workers’ compensation risk for nursing homes is the manual lifting of patients — moving residents to and from bed, assisting with bathing and positioning patients in chairs — that can cause micro-injuries to the spine and trigger moderate to severe musculoskeletal disorders. These injuries, in turn, not only wreak havoc on the health and earning potential of workers but also on the turnover rate and financial health of nursing home operators.
How workers’ compensation policy rates are determined
In determining a facility’s premium, insurance companies prepare loss history reports. The loss history reflects the workers’ comp claims a company has had over a designated period of time, typically one year. It includes all of the claims that have been filed with the insurer as well as what has been paid and expected payments in the future. Those facilities with higher amounts of loss typically pay higher premiums.
What’s more, few people realize it, but when you buy an existing nursing home facility, you inherit that facility’s loss history, even if your own losses are minimal — and you’re doing everything you can to lower the exposure to the new facility. You’ll still pay the higher premium, and continue to do so for at least three years. To make matters worse, in some instances, you may have no control over claims from a prior owner, and the prior owner may have no incentive to manage the claims. So your premium could get worse over time.
Your experience modification rate specifically relates to your workers’ comp premium. A facility’s experience modification is based on the number and severity of workers’ comp claims filed. Insurance companies use this rate to gauge past injuries and potential risk to predict future losses and calculate workers’ comp premiums.
A workers compensation insurance broker can go over in more detail all that goes into determining your insurance rates and provide you with assistance in reducing the frequency and severity and claims and ultimately your premium.