What’s an Experience Modifier Rate and Why is it Important?

The Experience Modifier Rate (EMR) plays a pivotal role in determining an employer’s premium rates and, in some cases, obtaining work as a subcontractor. The BWC calculates the EMR based on a comparison of the employer’s experience period claims compared to an industry average expected claim level. The EMR is used as a gauge for future claim costs and serves to adjust an employer’s premium if claims are above or below expected levels. 

The EMR is applied to the base rate and is used as a base rate credit discount or a penalty rate surcharge. When an employer’s EMR is above 1.00 they are “penalty rated”. If an employer’s EMR is below 1.00 they are “credit rated”. Traditional Group Rating programs serve to lower an employer’s EMR below the EMR levels they could achieve on their own. There are circumstances when employers must provide their EMR, as a requirement to bid on particular jobs and that is used to gauge the employer’s workplace safety.

Each June, BWC provides private employers with an online experience exhibit that provides their upcoming policy year experience period data including experience claims, base rates for their manual classifications and their Experience Modifier Rate(EMR). For public employers, this experience exhibit is provided in December each year. Please contact CareWorks Comp if you have any questions about your organization’s EMR.