How EMR Is Used

• The EMR is a comparison between the number and value of your workers' compensation claims and those of other companies in the same industry. Companies that pay in excess of $3,000 in annual workers' compensation premiums will receive an EMR rating.
  
  

Calculation

• EMR is calculated by an insurer examining your company's payroll and losses for the previous five years. The insurer then sends its findings to the National Council on Compensation Insurance (NCCI). This organization assigns a rating based on the three-year period starting one year prior to the current effective date. For example, when calculating your EMR for 2010, the NCCI would examine the years 2006 through 2009.
  
  

What EMR Means

• When your company receives its rate, you can compare it to other companies in your industry to see how you stack up. If your rate is high, it may be advisable to take a look at your company's safety procedures or loss prevention techniques to discover areas for improvement.
  
  

Other Effects

• In addition to having an impact on your company's workers' compensation premiums, the EMS can also influence other areas of your business. For example, you may only want to hire vendors and outside contractors that have an EMR that is better than the average for your industry. In this way, you are exercising more control over your own EMR by minimizing the risks to your own employees.
  
  

Claims Impact

• In general, medical-only claims have less of an effect on your EMR and do not result in additional penalties as long as they do not cause a loss of work time. If a loss of time occurs, the first $5,000 is counted at full value, while any amount that exceeds $5,000 receives a discounted rate.