The answer is good news: In workers compensation, you have more influence over these expenses than you might realize. 

Understanding how your work comp premium is calculated is the first step toward controlling these costs. Once you know what drives your premium, you can implement strategies that protect both your people and your profits. 

We’ve been a leading work comp provider for 30 years and have seen firsthand how businesses can reduce their premium over time. Here are our top proven strategies to reduce costs while building safer, more productive workplaces. 

Quick action checklist: Start reducing costs today 

How does your business stack up? Before we dive into the details, see how many of these boxes you can check: 

Building a safety program
	Create written safety rules for your top workplace hazards
	Schedule monthly safety meetings with your team
	Conduct safety training during onboarding and annually
	Develop incident response and investigation plans
	Use post-offer employment testing for new hires
	Apply for a safety grant to fund safety equipment
Proactively managing claims
	Set up 24-hour injury reporting procedures
	Identify preferred medical providers for workplace injuries
	Use telehealth and nurse triage services
	Create a return-to-work program with light duty options
	Conduct post-incident drug and alcohol testing
	Ask about subrogation recovery efforts
Keeping accurate payroll records
	Keep detailed documentation of employee job duties
	Review and update classifications regularly
	Gather payroll summaries and contractor certificates
	Set up Pay as You Go billing to avoid audit surprises
	Work with premium consultants to verify accuracy
Partnering with experts
	Work with an independent agent
	Choose a specialized work comp carrier
	Evaluate carriers’ in-house vs. outsourced services
	Ask about available safety and claims management resources

Strategy 1: Build a comprehensive safety program 

Creating a safety-first workplace is the most powerful way to reduce work comp costs. By preventing injuries from happening, you avoid the direct and indirect costs that follow workplace incidents. 

Safety policies and training programs 

Here’s where to start – and if you already have a safety program, use this as a checklist to assess how you’re doing. 

Checklist: Creating a safety program 

• Develop clear safety rules. Create written safety guidelines, and ensure rules are easy to understand and accessible to all employees. 

• Hold regular safety meetings. Keep safety topics current and relatable – use these short meetings to reinforce safety rules and discuss industry-specific hazards. 

• Use post-offer employment testing (POET). MEM data reveals that about two in five lost-time claims involve a new hire, with an average claim cost of $52,200. Testing whether employees are physically capable of performing their assigned duties can significantly reduce these costly incidents. 

• Conduct in-depth safety training. These training sessions educate employees on safety guidelines, ensuring they are prepared to handle safety procedures. Consider comprehensive safety training during onboarding and annually for all employees. 

• Foster a culture of prevention. Encourage safety as a mindset, not just a compliance measure. Show employees that you care about getting them home safely to their loved ones at the end of each day. 

• Create an incident response plan. Focus on common risks and unique industry dangers. Prepare to respond quickly if incidents occur. Conduct an incident investigation afterward to identify what went wrong and how to prevent it next time. 

Prioritizing safety inside and outside the workplace doesn’t just have a tangible impact on your e-mod and premium. It also boosts employee well-being, increases retention, and improves efficiency. 

Pro tip: If safety hasn’t been at the forefront of your workplace culture in the past, don’t worry. Start with small changes to build momentum. 

“It’s often easier to have short-term goals to measure your success instead of the grandiose, long-term goal of zero claims,” explained Sheila Schmidt, MEM Safety & Risk Services Regional Manager. “The habits and activities are going to be your short-term goals, which are going to get you to your ultimate goals of employee safety, injury reduction, claims reduction, and premium reduction.” 

Safety equipment and technology investments 

While policies and training create the foundation, investing in the right safety equipment can deliver exceptional returns. 

Checklist: Tech that prevents injuries 

• Ergonomic equipment that eliminates repetitive strain risks 

• Fall protection systems for elevated work 

• Material handling equipment that reduces manual lifting 

• Personal protective equipment tailored to specific job hazards 

Case study: Vacuum lift improves safety and productivity 

Koonse Glass Company invested $33,000 in a SmartLift vacuum lift to handle large glass panels weighing 200-500 pounds. By preventing injuries and saving time over the equipment’s five-year lifetime, Koonse achieved a 191% return on investment, nearly doubling their money while protecting their employees. 

Did you know? MEM’s Safety Grant program provides one-to-one matching funds up to $10,000 annually, helping businesses double their safety investments. Since 2016, grant recipients have seen a dramatic reduction in claims in areas where safety equipment was put in place. 

Learn more: MEM’s safety grant program and application process > 

Strategy 2: Manage claims proactively 

If an injury does happen, your response in the first hours and days can determine whether a claim becomes a minor expense or a major cost driver that impacts your future premium. 

Immediate incident response 

Quick, decisive action followed by proactive claims management can minimize the impact a claim has on your e-mod and insurance costs. 

Checklist: Incident response and medical care 

• Immediately assess care. Take care of the employee first. Assess the severity of the injury and seek emergency help if needed. 

• Report the injury ASAP. Reporting the injury to your work comp carrier immediately helps control medical expenses and minimize lost wages. It may even mean the claim can be processed as medical-only, reducing its impact on your e-mod. 

• Use telehealth and nurse triage. These virtual consultation services provide quick access to medical guidance. 

• Direct medical care when possible. Employers’ right to direct medical care varies by state. Use this right when available to ensure injured workers receive appropriate, cost-effective treatment. 

Did you know? MEM’s in-house nurse case management team provides dedicated support throughout the claims process. “There is no additional cost to the medical file for the services that the nurse case management team is providing,” explained Lyndi Barthel, MEM’s Medical Services Manager. “At some carriers, there is an additional expense that goes toward the claim for a nurse to manage the files.” 

Return to work and cost control 

Getting employees back to productive work safely and quickly reduces claim costs, maintains team morale and productivity, and leads to better medical outcomes for the employee. 

Checklist: Controlling claim costs 

• Outline light duty and modified work programs. These options help maintain employee morale and minimize lost work days. Ask your carrier about return-to-work resources. 

• Conduct post-incident drug and alcohol testing. If being under the influence led to the worker’s injury, penalties may be applied (these vary by state), reducing claim costs. 

• Report suspected fraud. Your carrier will conduct a thorough fraud investigation to identify and prevent fraudulent claims from continuing through the work comp system. 

• Ask about subrogation recovery. Insurance companies often conduct subrogation to recover funds from third parties responsible for an incident, reducing claim costs. In 2024, MEM recovered $3.4 million through subrogation efforts. 

“When we receive a recovery, that impacts the final cost of the claim. That’s a benefit to the insured because their e-mod is influenced by the cost of claims,” explained Michelle Palmer from MEM’s subrogation team. 

Strategy 3: Maintain accurate payroll and classification records 

For many businesses, payroll and even employee classification evolve throughout the year. The estimated premium you paid at the beginning of the year might need an adjustment, determined by your premium audit. Keeping detailed and up-to-date payroll records ensures you pay the right premium. 

Checklist: Reviewing and maintaining accurate payroll 

• Keep detailed documentation. Support your classification decisions with records of the job duties performed by each employee. 

• Review and adjust classifications regularly. Consistently review and update employee classifications to align with their current duties. 

• Prepare for your audit. Gather documents like payroll summaries, tax statements, and 1099 forms for contractors. 

• Engage with consultants. Work with premium consultants to verify that your employee classifications are accurate, helping prevent overcharges. 

“The whole point of doing the audit is to get the correct premium,” explained Tina Austin, MEM Premium Consultant Supervisor. “We don’t want to overcharge the customer, and we don’t want to undercharge the customer.” 

Routinely reviewing employee classifications and keeping detailed payroll records means you’re prepared to work with your auditor for any necessary premium adjustments. 

Need help preparing for your audit? Download our audit preparation checklist > 

Did you know? Monthly payment options can help you sidestep audit surprises and large adjustments at your policy’s end. MEM’s Pay as You Go lets you pay your premium based on your actual payroll throughout the year. This option can help you improve cash flow and pay for only the coverage you need. 

Strategy 4: Partner with specialized experts 

The insurance professionals you work with can make or break your cost control efforts. Choose work comp partners who offer specialized expertise and resources to follow through on the strategies we’ve discussed. 

Choosing insurance partners 

Not all work comp carriers offer the same level of service or specialization. The difference between a specialized carrier and a big-name multiline company can impact your costs and outcomes. 

Checklist: Choosing an agent and carrier 

• Partner with an independent agent. These agents work with multiple carriers, offering a range of options tailored to your needs. They prioritize your interests, ensuring the best coverage at competitive rates. 

• Choose a specialized work comp carrier. Carriers with deep expertise in work comp can offer value-added programs and services like telehealth, return-to-work, safety training, and more. 

A captive agent with a multiline carrier may offer convenience. However, you’ll see the highest long-term return from choosing true partners that offer cost control strategies and resources. 

Read more: How to Choose an Insurance Agent / How to Choose a Work Comp Carrier 

In-house services save you money 

At MEM, work comp is all we do, so we have the in-house services and programs to help you improve your e-mod and reduce costs over time: 

• Claims support: In-house nurse case managers, claims adjusters, and medical management teams 

• Safety services: Dedicated safety consultants, on-site risk assessments, and safety grant program 

• Premium consultation: Dedicated team to ensure accurate classifications and billing 

• Legal support: Internal law firm to defend claims 

“CompLegal is our internal law firm. We handle approximately 95% of the claims that go to legal,” explained Laura Sides-Cooper, MEM’s Managing Attorney. “Keeping so many claims in-house and having a high retention rate reduces the legal costs associated with defending workers compensation claims.” 

Those cost savings translate to lower claim costs and less impact on your e-mod. With the right work comp partners, your policy isn’t just a commodity, but an asset. 

Work comp is a valuable business asset 

If your work comp bill feels like a “cost of doing business,” flip the script. With the right partners, your policy provides not just coverage, but active support for building a safer, more productive, and more profitable business. 

At MEM, we’ve spent 30 years helping businesses understand and control their work comp costs. Our A- rating from AM Best reflects our financial stability and commitment to delivering value to our policyholders. 

To learn more about partnering with MEM for work comp, reach out to your agent or find an agent here. 

The post 4 Proven Ways to Reduce Your Workers Compensation Costs  appeared first on MEM.

“Being a business owner often means that you wear a lot of hats,” explained Scott Costello, President of Tri-County Agency. “Everything from being the janitor to the CEO of your business.” 

Controlling costs is crucial, but juggling these different roles often means that business owners don’t have time to sit down and develop cost-saving strategies. 

Understanding your premium calculation empowers you to take an active role in controlling your workers compensation costs. 

The workers compensation premium formula 

You might be curious about how insurance companies arrive at the number on your bill. Calculating premium can be complex, but it doesn’t have to be a mystery. 

Three main elements determine your premium: 

• Payroll: How big is your workforce? 
• Classification rate: What types of work are your employees doing? 
• Experience modification factor (e-mod): Do you have a history of work comp claims? 

The bottom line: Payroll * classification rate (per $100 of payroll) * e-mod = premium 

6 factors that determine your work comp premium 

At a high level, your premium reflects your company’s size and perceived risk level. During the underwriting process, your carrier considers your number of employees, class codes, claims history, and safety policies. 

External factors, like legal guidelines and industry-wide trends, can also impact your work comp premium. Let’s break these factors down. 

1. Location and state laws 

Because workers comp coverage is required by law for most businesses, state regulations can impact premium rates. If your business operates in multiple states, including some that don’t use rates from the National Council on Compensation Insurance (NCCI), you might face varying rates even for similar roles. 

Here’s an example: Reputable Roofing is a Cincinnati-based roofing company. The crew takes jobs in Indiana, Kentucky, and Ohio. All three states have different regulations. Kentucky follows NCCI ratings, while Indiana has an independent bureau, and Ohio is a monopolistic work comp state. These differences make Reputable Roofing’s premium calculation more complex. 

2. Industry type 

Industries are not created equally when it comes to risk. Businesses in high-risk industries pay higher premiums compared to lower-risk businesses. Where your business sits on this spectrum has a big impact on your premium. 

Our friends at Reputable Roofing are operating in one of the most dangerous industries, construction. The reality is that a construction business is more likely to have work comp claims than the accounting firm down the street. Those claims are also more likely to have higher severity – more serious injuries that require complex care and cost more. This is reflected in their work comp premium. 

3. Employee classification 

Employee classification also affects premium costs because your employees have different roles with different levels of inherent risk. Classification codes ensure that businesses pay rates that match the risk of the work performed. 

Although Reputable Roofing is in the high-risk construction industry, the company also employs people who don’t perform high-risk work, like office managers and salespeople. This is accounted for in their premium calculation. 

Your payroll is multiplied by the base rate for each class code in your business. To determine these base rates, carriers in most states reference actuarial calculations from the NCCI, which maintains more than 600 class codes. 

4. Payroll and workforce size 

Your number of employees and how much they’re paid directly impact your premium. Premiums are generally calculated per $100 of payroll, so keeping accurate payroll records is vital to ensuring fair premium. 

“Payroll is the basis used to calculate premium,” explained Tammy Canton, Underwriting Specialist at MEM, “so this is why it is so important to have correct payroll information at the start of the policy period.” 

Reputable Roofing employs around 70 people. Their payroll is much higher than a contractor with a team of five. With more employees, they’re more likely to have a claim, so they pay a higher premium. 

Pro tip: A company like Reputable Roofing might have full-time employees and independent contractors who work as needed. Some business owners think hiring subcontractors means they don’t need work comp, but in reality, an uninsured contractor can be a big liability. Hiring uninsured subcontractors can impact your premium, so collecting Certificates of Insurance is crucial to verify that they have their own work comp policies. 

5. Claims history and e-mod 

An experience modification factor, or e-mod, uses your past claims to predict whether your future losses will be better or worse than the industry average. In most states, the NCCI calculates e-mods. 

Your historical claim costs affect your e-mod, which in turn impacts premium costs. Claim costs include medical costs, lost wages while the employee is unable to work (indemnity), and additional benefits like disability. 

Claim frequency and severity both impact your e-mod. “Frequency leads to severity,” explained Becky Duello, MEM Senior Underwriter. “A large number of small claims can negatively affect your risk exposure as much as one or two large claims over time. And they both impact premium.” 

An e-mod lower than 1.0 means your loss experience has been better than the average of your peers. Reputable Roofing’s e-mod is currently 0.8. That means they’re paying less premium than their competitors – nice! 

An e-mod higher than 1.0 means your losses are worse than expected for your business type and size, and you can expect to pay higher premium than your peers. A claim continues to impact your e-mod for up to four years, so it’s crucial to take steps to prevent incidents and proactively manage claims today. 

Learn more: What Is Your E-Mod Costing You? > 

6. Safety program and culture 

Building a strong safety culture is a long-term investment that will continue to pay off as long as your business exists. Proactive safety programs can lead to substantial savings by minimizing workplace injuries. 

Reputable Roofing implemented a safety program ten years ago. They’re proud to have significantly reduced their number of work comp claims during that time, and their progress is reflected in their e-mod and premium bill. 

Sometimes, a workers compensation insurance company may also offer endorsements or discounts for investing in safety programs and equipment. 

MEM policyholders are eligible to apply for safety grants to fund valuable safety initiatives. Here’s how it works. 

Understanding estimated vs. audited premium 

For many businesses, payroll and even employee classifications evolve throughout the year. Therefore, the work comp premium you pay at the beginning of your policy might not be accurate by the end. You might need an adjustment, which is determined by your premium audit. 

At MEM, we often issue work comp policies with estimated payroll figures for the policy period, and then audit them at the end of the period to determine the actual payroll. Then, the difference between the audited and estimated premium is billed or returned. 

“The whole point of doing the audit is to get the correct premium,” explained Tina Austin, MEM Premium Consultant Supervisor. “We don’t want to overcharge the customer, and we don’t want to undercharge the customer.” 

Premium factors: What you can and cannot control 

While you may not be able to directly control factors like class codes or the inherent risk level of your industry, there are steps you can take to reduce your work comp premium. 

Factors you can’t control: 

• State laws and regulations 
• Industry base rates 
• Overall market conditions 

What you can influence: 

Safety programs help prevent claims that impact your e-mod. 

Claims management can reduce claim costs and severity. 

Accurate, up-to-date payroll records ensure accurate premium calculation. 

A specialized work comp partner offers expertise and value-added services. 

Work comp is a valuable business asset 

Understanding your work comp premiums is the first step toward taking an active role in controlling them. Remember, the value of a work comp policy goes beyond the premium you pay. As Warren Buffett noted, “Price is what you pay. Value is what you get.” Each component of your policy, from safety services to claims management, should add value to your business and give you a return on your premium investment. 

Navigating work comp can be tricky for business owners, but you don’t have to do it alone. At MEM, we’ve spent 30 years helping businesses understand and control their work comp costs. Our A- rating from AM Best reflects our financial stability and commitment to policyholder service. 

To learn more about partnering with MEM for work comp, reach out to your agent or find an agent here. 

The post How Your Workers Compensation Premium is Calculated  appeared first on MEM.

But payroll accuracy also determines something even more critical: who’s actually covered if an injury happens. Get it wrong, and you could face coverage gaps or surprise bills.

On this episode of the WorkSafe Podcast, we discussed these scenarios and more with Tammy Canton, Underwriting Specialist at MEM. With decades of experience helping businesses navigate work comp premiums, Tammy knows exactly where things go wrong and how to get them right from the start.

Why payroll is the foundation of your work comp policy 

Understanding how payroll impacts your coverage goes beyond simple premium calculations. 

“Payroll is the basis used to calculate premium,” Canton said, “so this is why it is so important to have correct payroll information at the start of the policy period.” 

In addition to premium, your payroll determines the structure of your policy. If you file a claim, your insurance carrier verifies that the injured worker’s paycheck matches the entity named on the policy. If there’s a mismatch, you could discover you don’t have coverage for that person. This can happen despite paying premiums for years. 

The critical payroll mistake that creates coverage gaps 

The most serious payroll mistake happens before you even calculate premiums: insuring the wrong business entity. 

Who pays employees? The multiple entity challenge 

Complex business structures create the biggest opportunities for coverage gaps. 

According to Canton, listing the correct named insured is critical because it’s the foundation of the insurance contract. If the named insured is incorrect, complications can arise during claims and audits. 

Here’s how this plays out in real situations: A claim gets reported, but the entity paying the employee isn’t the same one listed on the work comp policy. Or during an audit, payroll records and tax forms belong to a completely different business entity. 

The entity that compensates the employee is considered the employer. This can be challenging to navigate for: 

• Businesses with complex structures 
• Parent companies with subsidiaries 
• Multiple LLCs under one umbrella 

Here’s an example: Your parent company, ABC Holdings, owns two subsidiaries. ABC Holdings handles corporate officer compensation, while Subsidiary A pays all other employees. If your policy only lists ABC Holdings as the named insured, workers employed by Subsidiary A might not have work comp coverage. 

“In some cases, payroll may be distributed across multiple entities,” Canton noted. “We would need both entities as named insureds to make sure everyone is covered.” 

Checklist: Are your policy and payroll aligned? 

Before your next renewal, verify: 

	The entity listed on your policy is the one that pays your employees
	Pay stubs show the same business name as your insurance policy
	All entities that pay wages are included as named insureds
	Your business structure hasn’t changed since your last policy update
	Corporate officers are paid by the entity listed on the policy

Why payroll companies don’t equal coverage 

Using a third-party payroll service doesn’t change who needs insurance coverage. 

The payroll company processes payments but has no “insurable interest” in your employees. They don’t actually employ anyone. Your business is the employer and needs to be the named insured, regardless of who cuts the checks. 

Read next: Work Comp for Multiple Business Entities 

Managing seasonal and fluctuating payroll 

Workforce changes throughout the year can complicate premium and coverage. 

How payroll changes affect your premium 

Work comp covers more than just full-time employees. Part-time employees, seasonal help, and even some contractors count toward your payroll and your premium. 

This can create cash flow challenges for a business with a fluctuating workforce. You might pay premiums based on projected high-season payroll, then operate with skeleton crews for months. 

Pay as You Go: a solution for variable businesses 

Instead of paying estimated premiums upfront, Pay as You Go lets you report actual payroll monthly and pay premiums accordingly. 

It’s an excellent payment option for seasonal businesses with fluctuating payroll, like a masonry contractor. When business is slow and payroll is lower, your premium payments aren’t as high as during the busy season. 

Here’s a quick comparison of Pay as You Go vs. a traditional annual premium payment: 

“It’s a really good way to streamline the work comp experience and manage cash flow throughout the year,” explained Revee White, MEM Director of Marketing and Customer Experience. 

Learn more about MEM’s Pay as You Go option to better align your premium payments with your actual payroll. 

The subcontractor coverage misconception 

A common payroll-related misconception involves hiring subcontractors without their own work comp coverage. 

The first step toward clearing up these misunderstandings is knowing whether your subcontractors have their own coverage. “If they don’t,” explained Canton, “we need to get them included on your policy, because there would be coverage under the policy.” 

Here’s what happens: You hire a landscaping crew to maintain your property. They don’t carry work comp insurance. During your annual audit, this subcontractor’s payroll gets added to yours, impacting your premium. 

Even worse, if one of the crew’s employees is injured on your premises, the resulting claim will affect your experience modification factor and premium for years. 

Working with your agent to stay protected 

Your insurance agent can help you understand how changes to your business will impact your work comp coverage needs. 

Be prepared to provide documentation to your agent, including W-3s, 940s, 1099s, and subcontractor certificates of insurance. These help the agent ensure the accuracy of your named insured and payroll. 

When changes require immediate attention 

Some business changes seem minor but can invalidate your coverage. 

Legal name changes, new business entities, or big payroll changes can affect your policy. “Someone will change their name and not think about changing it on their insurance policy,” Canton noted. “Really, we don’t have coverage for that entity any longer.” 

The solution: proactive communication. If there are changes, it’s good to catch them sooner than later to avoid problems down the road. 

Checklist: Notify your agent of these business changes 

Be sure to get in touch with your agent if your business experiences any of these changes: 

	Legal business name changes
	New subsidiaries or entities are created
	Payroll responsibility shifts between entities
	Significant payroll increases (25%+ growth)
	Major workforce reductions
	New business locations open
	Business structure changes (LLC to corporation, etc.)
	Acquisition or merger activity
	Adding or removing business partners

Protect your business: essential payroll and coverage verification 

Getting payroll right from the start prevents costly surprises down the road. 

Here are the key actions you should take: 

• Verify your policy’s named insured(s). Make sure the entity on your policy actually pays your employees. Check pay stubs against your policy documents. 
• Plan for changes. Whether you’re growing rapidly or facing seasonal fluctuations, work with your agent to adjust coverage before problems arise. 
• Document everything. Keep W-3s, 1099s, and certificates of insurance organized and accessible for audits and renewals. 
• Communicate proactively. Don’t wait for renewal time to update your agent about business changes that could affect coverage. 

Remember, work comp isn’t just about having a policy. It’s about having the right coverage for the right people at the right time. 

Not sure whether your policy ticks all the boxes we’ve discussed? Ask your agent to review your policy and payroll setup to make sure everything is aligned. 

For more insights on workers compensation fundamentals, check out our complete guide to work comp basics. 

The post How Payroll Impacts Your Workers Compensation Coverage  appeared first on MEM.

In this video, Tina Austin, CIPA and Premium Consultant Supervisor at MEM, shares some of the top mistakes she sees when it comes to structuring work comp policies with multiple entities. 

The critical entity problem most business owners miss 

The most common mistake in multi-entity work comp involves misunderstanding which entity actually pays the employees. This confusion can create serious coverage gaps. 

Austin shared the following example: “If there’s a travel agency that’s paying all the employees for both that travel agency and a related business, a construction company, then the travel agency needs to be the primary named insured on the policy.” 

Businesses sometimes fail to identify which entity pays the payroll. In this example, if the travel agency pays employees who work for both the travel business and the construction company, then the travel agency must be the primary named insured on the work comp policy. This ensures that all employees are covered regardless of which business they’re working for on any given day. 

Why entity structure matters for work comp 

The entity structure isn’t just a paperwork detail. It’s fundamental to how your work comp policy functions. 

When entities that pay payroll aren’t properly included on the policy, several problems can emerge: 

• Audit complications: Payroll from uncovered entities can’t be included during the audit process 
• Claims vulnerabilities: Employees of uncovered entities may not have proper protection 
• Compliance issues: The policy structure may not align with your actual business operations 

The bottom line: The entity that pays employees must be covered under the work comp policy. This ensures that all payroll can be properly accounted for and all employees have the protection they deserve. 

Understanding payroll responsibility and policy structure 

Getting the policy structure right starts with identifying which entity actually pays your employees and handles employment tax responsibilities. 

The primary named insured rule 

In most cases, the entity that pays the employees should be the primary named insured on the policy. Typically, this is the entity that files federal tax forms and maintains the employment records that auditors need to verify coverage and calculate premiums. 

“In most cases,” explained Austin, “the entity that pays the employees, also files the federal tax forms, and that entity is the one that needs to be included on the MEM policy or any work comp policy.” 

Federal tax forms tell the story 

Your federal tax filings provide the clearest evidence of which entity should be covered under your work comp policy. These forms remove guesswork by showing legal entity names and FEIN numbers: 

Common entity mistakes that create coverage gaps 

Business owners sometimes make these critical errors when dealing with multiple entities: 

• Assuming multiple entities need multiple policies: When one entity pays all payroll, a single properly structured policy can provide comprehensive coverage 
• Failing to update policies after reorganization: If you change which entity handles payroll responsibilities, your work comp policy needs immediate updates 
• Not communicating entity relationships to agents: Incomplete information leads to improper policy structure 

How MEM handles complex entity structures 

MEM has specialized expertise to help businesses navigate complex entity structures and ensure proper work comp coverage. 

The ERM 14 form: Documenting your business structure 

MEM uses a form called the ERM 14 to document complex business structures and ensure that all relevant entities are properly reflected in the policy. This form allows businesses to clearly communicate their entity relationships and payroll responsibilities to MEM underwriters. 

The ERM 14 form captures the details that standard applications might miss, helping prevent the coverage gaps that can happen when entity structures are misunderstood or incorrectly documented. 

Working with MEM underwriters for proper policy setup 

Our underwriters specialize in understanding complex business structures. To help them structure your policy correctly: 

• Provide complete information about which entities pay payroll 
• Share entity relationship details and organizational charts 
• Communicate any recent business structure changes 
• Be transparent about your operations across all entities 

The more information you provide about entity relationships and payroll responsibilities, the better MEM underwriters can tailor your policy to your specific situation. 

MEM premium consultants: Support beyond audits 

“MEM premium consultants are highly trained professionals,” explained Austin. “They can be a lot of assistance throughout the policy period, not just at audit time. They can advise you on how to keep records. They can advise you on what entities are on the policy that you may need to go back to that MEM underwriter and make changes. Our premium consultants are happy to help.” 

If you discover that your current policy doesn’t properly reflect your entity structure, our Premium Consultation team can help you make the necessary adjustments. Early consultation can prevent audit complications and ensure that your coverage stays aligned with your operations. 

Get prepared: Download MEM’s Audit Preparation Checklist to make sure your records are audit-ready. 

3 best practices for multi-entity businesses 

Following these best practices can help prevent entity structure problems and ensure your work comp coverage remains accurate and comprehensive. 

1. Keep detailed records 

Maintain clear documentation to support proper policy structure: 

• Track which entity pays each employee clearly in your payroll records 
• Align payroll records with federal tax filings to avoid discrepancies 
• Implement systems that document employee assignments across entities 
• Keep records of entity relationships and organizational changes 

This documentation becomes invaluable during audits and helps ensure that your policy structure remains accurate as your business evolves. 

2. Communicate openly with your insurance agent 

Your insurance agent needs complete information about your entity structure to properly advise you on coverage options: 

• Provide clear documentation of entity relationships and payroll responsibilities 
• Don’t assume your agent understands your business structure without explanation 
• Communicate business changes immediately when you add entities or reorganize 
• Schedule regular check-ins to discuss structural changes and coverage needs 

3. Schedule regular policy reviews 

Schedule regular reviews of your work comp policy to ensure that it continues to reflect your current business structure. As businesses grow and evolve, entity structures can change, and your insurance coverage needs to keep pace with these developments. 

Get your entity structure squared away before your audit 

Proper entity structure is fundamental to effective work comp coverage. When multiple entities are involved, understanding which entity pays payroll and making sure it’s the primary named insured can prevent audit issues and potential claims complications. 

The key is working with experienced professionals who understand the complexities of multi-entity businesses. MEM’s premium consultants have decades of experience navigating these challenges and are here to help. 

Need expert guidance on your multi-entity structure? 

Policyholders can reach out to our Premium Consultation team anytime at premiumconsult@mem-ins.com for specialized help with multi-entity work comp structures. 

The post Work Comp for Multiple Business Entities: Avoiding Common Mistakes appeared first on MEM.

Check out the video below to better understand how a premium consultation works: 

Why premium consultations matter 

Work comp coverage works a bit differently than other types of insurance. When a policy starts, your premium is an estimate. But businesses grow, change, or downsize over the course of the year. So, when the policy period ends, your final premium is calculated based on your actual exposure and payroll. 

If your business grew during the policy year, your premium may increase. If it shrank, you might be eligible for a refund. Either way, the goal is to make sure you’re only paying for what you need. 

A simple example 

John is a contractor and owner of Better Building. John’s business grew during the policy year—he hired more employees and worked with subcontractors. That growth increased his payroll, which meant the estimated at the beginning of the policy year didn’t match his actual exposure. 

But thanks to MEM’s audit preparation checklist, John was ready. He gathered payroll records, tax forms, payment information, and certificates of insurance for subcontractors. Then he briefly touched base with his MEM premium consultant.  

Later, he received a final statement showing the difference between his estimated and actual premium. The process was easy, and there were no surprises. 

The next year, when business slowed down, John had fewer employees and didn’t use subcontractors. At year’s end, he was eligible for a refund because his exposure was lower than estimated. That’s how the system works: fairly and transparently. 

What MEM’s consultants can do for you 

Our in-house premium consultants are here to support you. They help: 

• Answer questions about classifications and exposures 

• Prepare you with recordkeeping tips 

• Review any changes to your business 

• Clarify what documents you’ll need for a smooth audit 

Audits are either virtual or online, depending on your business size and industry. Either way, we make it as easy and efficient as possible. 

Be prepared from day one 

Download our Audit Preparation Checklist to get started. It outlines what records you’ll need and when to start gathering them. Staying organized helps prevent unexpected costs and ensures your coverage matches your business needs. 

At MEM, we believe every business deserves to work with confidence. A proactive premium consultation helps make that happen. 

The post What to Expect from a Premium Consultation with MEM   appeared first on MEM.

Many employers have misconceptions about how workers compensation actually works. Some don’t understand what types of injuries are covered. Others aren’t sure how claims impact their business – or how they can be involved in the process. These misunderstandings can lead to costly mistakes and missed opportunities to improve workplace safety. 

With years of experience helping businesses navigate workers compensation – and as an agency partner with MEM since our inception – Speight clears up common work comp myths and shares helpful insight. 

Listen to this episode of the WorkSAFE Podcast, or read the show notes below. 

Myth #1: Work comp coverage is too expensive

For Speight, one common myth about work comp reigns supreme. “The biggest misconception that we typically see is that work comp is too expensive,” he shared. “The cost of the coverage has to always be looked at in relation to the actual cost of a possible claim.”  

For example, a $20,000 policy is well worth the cost when a later claim totals more than $70,000. “While we hope a client – and the client hopes – they never have a claim, the cost of work comp is well worth it compared to the risk of having to be responsible for an injured employee’s lost wages, rehab, medical expenses, etc.” 

Myth #2: Employers don’t need work comp if it isn’t required 

Another common myth is that employers don’t need work comp if they have only a few employees. While some states require employers to carry work comp, not all states do. Work comp covers medical expenses, lost wages, and vocational rehabilitation. Without it, employers may end up in a difficult position.

Speight points out that without coverage, a judge may likely rule in favor of an injured employee in court, making the employer responsible for costs. “We always recommend that the customers consult with us and their attorney before deciding not to purchase work comp,” he added, highlighting the importance of the decision. 

Work comp myths around subcontractors

Subcontracting is a common practice in several industries. General contractors often make a critical mistake: assuming they are exempt from liability in the event of an incident. However, this isn’t always the case.

Each state determines whether a subcontractor is required to have its own work comp policy. If a hired subcontractor doesn’t have work comp coverage and is injured on the job, then the employer could be left responsible for medical costs and lost wages. A Certificate of Insurance (COI) is a document that demonstrates a subcontractor has a separate policy covering their workers.

Myth #3: It’s impossible to get lower work comp premiums 

High-risk industries and businesses with more employees can result in a bigger premium bill. A concerning loss history can also contribute to higher costs. For instance, tasks such as loading, lifting, and driving are considered important risks. However, employers can lower a work comp premium rate over time with loss control and intentional action. MEM offers risk reduction and safety solutions, including:

• Safety Grants. Funding should never stand in the way of keeping people safe. Apply for a matching grant to purchase and install safety equipment.
• Free safety resources. From free posters and sample policies to safety rules and starter kits, find everything needed to start building workplace safety culture.
• Policyholder training. Address unique risks in your workplace with access to a safety consultant or on-demand virtual training.

“It’s not a short-term process. It’s a long process to get those rates down,” Speight shared, revealing the reality. “It may take two or three years before those rates and those premiums and those experience mods go down. And it does take some work by the insured to get it done. But in the long run, it’s well worth it. I’ve saved lots of customers lots of money over the years.”  

Myth #4: A few small claims can’t have a big impact

Some employers are under the impression that a few small claims have little impact on work comp. However, this is one of many work comp myths around claims. Even a few small injuries over time can affect premium costs.  

“I actually tell my clients the opposite, that many small claims can actually be worse than one large claim,” Speight explained. While a larger claim may result in a larger payout, several small claims demonstrate frequency. Frequent small claims show that safety risks are present – and aren’t being addressed. “Frequency definitely hurts your loss history and your experience mod more than severity.” 

Myth #5: Employers go through the claims process alone 

A workplace incident is often an intimidating experience for employers. A work comp claim involves paperwork, answering questions, and ensuring an injured worker gets the right care. However, employers don’t go through it alone.

Communication is a key element in the process. Speight often dispels the common misconception that agents step in and handle claims. Throughout a claim experience, a network of communication is created, including the injured worker, the employer, the work comp carrier, and any medical professionals involved in treatment.

Myth #6: Getting injured workers back on the job sooner doesn’t make a difference

One of an employer’s most important assets is the people who make work possible: employees. When an employee is sidelined by an injury, one of the best ways to improve outcomes for everyone is to create a path back to work. Speight always recommends a light duty or return to work program.

“The longer the employee stays home, the more likely they’re going to want to continue to stay home,” he shared. “Even though it’s at a reduced pay, they get comfortable staying home. And if they’re in a job where they don’t have a way to come back to work, they don’t really have a choice but to stay home until they’re healthy.”

Even for injured workers with limited capacity, administrative duties help them get back into the workplace, into a routine, and socialize with other co-workers. For example, answering the phone or filing papers are simple tasks that bring them back into the company and let them know their contributions are valued.

Myth #7: Agents are only there at the start of a work comp policy

Business owners benefit from having an agent with them every step of the way, from obtaining their first policy and implementing safety measures to end-of-year audits and renewals. Speight encourages employers to find a local agent with whom they can share the unique aspects of their business. “You need that connection,” he reiterated.

Workers compensation isn’t as black and white as other types of insurance, such as car insurance. Coverage is tailored to a company’s specific line of work, number of employees, and level of risk. But when employers walk into the world of work comp, they don’t have to go alone.

The post Separating Fact and Fiction: Busting 7 Common Work Comp Myths appeared first on MEM.

If you’re a business owner, you know that workers compensation isn’t just a policy. It’s a tool to protect your employees and your bottom line. But what happens after you receive your policy? How can employers control work comp costs and set themselves up for a smooth renewal at the end of the year?

Listen to this episode of the WorkSAFE Podcast, or read the show notes below. 

Onboarding: The policyholder journey begins

For many employers, getting a work comp policy may be a new experience. Their policy secures them coverage, but…what happens next?  

Once a customer decides MEM is the right fit, an onboarding process begins. Policyholders receive helpful tools and resources, and a walkthrough of what to do if a workplace incident happens. First-time policyholders are directed to the Policyholder Checklist, which serves as a comprehensive guide—a roadmap—to navigating areas like billing, claims, and finding the right safety solutions.

This checklist is also accompanied by an email series. Over five emails, MEM breaks down the important elements of work comp. The goal is to ensure new policyholders feel confident and comfortable navigating this new process. 

Where do I access resources? 

Policyholders have access to various resources, each designed to help them create a culture of safety and clarify the work comp experience. “We have an entire library of resources on our website,” Hahn shared. A visit to the MEM website provides access to: 

• The Resource Library. Find free resources, including posters, toolbox talks, and sample safety policies. 

• Program information. Policyholders can take advantage of different programs, such as Safety Grants, Nurse Aid, and endorsed safety solutions. 

• Answers to frequently asked questions (FAQs). Each section answers commonly asked questions around topics like billing, audits, and injured workers.  

“We really create these tools and guides specifically to help our policyholders through their entire work comp journey, so it’s just a vast library of checklists and guides and training materials. There’s something there for everyone,” she said. 

Policy management: Finding the right programs for you

Once onboarding is complete, a new phase begins. “Once you’re comfortable, we’ll move into a management phase,” Hahn shared. “That’s really where we partner with policyholders. We’re all about preventing injuries and helping you become a pro at workplace safety.” 

Employers get support when and how they need it. MEM’s Safety and Risk Services team can help minimize workplace risk through a visit and thorough assessment. They give safety tips, point employers to further resources, and help develop custom training plans.

The MEM Safety Grant program is also an option for addressing safety solutions that have a higher price tag. A Safety Grant provides a one-to-one matching investment in a safety initiative, doubling a company’s investment. Employers can apply any time, and decisions are made by the following month. In the nearly nine years since its inception, more than 400 grants have been awarded to different businesses.

Claims: Navigating a workplace incident

Building a safety culture and reducing risk in the workplace helps prevent incidents. But when they do occur, MEM has a team ready to assist. Several people will join you during your claim process. In-house claims professionals quickly coordinate with medical teams and provide updates in the event of an injury. Hahn often refers to the Claims Management Kit as an essential resource for policyholders.

“We think of it as your ‘Oops, something happened!’ guide,” she explained. “It breaks down everything. It goes through when to go to the ER versus calling our nurse triage line, a quick checklist for figuring out what happened, and then all the forms that you might need to fill out – it just kind of flows through the claims process. It’s great.”

Renewal: Setting up for the next policy year

At MEM, policies follow a yearly cycle. Renewal communication starts a month or so before a policy ends. Premium is calculated using different factors: payroll, experience modification factor (e-mod), and state-dependent rates. Employers get insight, ahead of renewal, as to what the next year’s cost may be.

An audit takes place, where actual costs for the year are determined and estimated costs for the next year are calculated. Members of MEM’s Premium Consultation team step in to help policyholders understand what documents and forms are required to do this. They may ask important questions, like:

• Have you hired any new team members? Did anyone move on, reducing your total number of employees?
• Are you offering any new services? If so, what kind of work are your employees doing now?
• Are you moving from year-round work to only offering seasonal services?

Agents often play a key role in the renewal process. “If any of those things have changed, it’s really important to give your agent a call,” Hahn pointed out. “They can make sure your policy is up to date and reflects how your business is running right now. That way, you know you’re fully covered.”

The purpose of an audit is to ensure that policyholders are paying accurate premiums. “We follow rules set by the National Council on Compensation Insurance and state regulators,” Hahn explained. “So, at the end of your policy period, we do audits to make sure you’re paying the right amount.”

The policyholder journey: Tap into resources that are created just for you

For Hahn, a policyholder’s biggest asset is all of the tools designed to help them. Missing out on them means missing out on value. “You know, it’s almost like if you bought a new gadget and you never read the manual. You’re missing out on all these really cool features – that’s how I see our resources,” she shared. “They’re available to make your life easier, to help prevent incidents, and to really understand your policy.”

Policyholder feedback is essential to creating impactful tools and resources. Hahn encourages policyholders to fill out surveys as they arrive throughout the policyholder journey.

“If there’s something that we try out, or you have an idea about how something could be better, we also want you to tell us about that,” she finished. “We want to know how we can make these resources work even better for you, because at the end of the day, that’s what it’s all about for us.”

The post The Policyholder Journey: A Guide to Work Comp with MEM appeared first on MEM.

Check out the video below, in which Roger Walleck, President and CEO of MEM, shares insights into the current state of the market and what businesses should be watching closely. As Missouri’s leading provider of workers’ compensation insurance, MEM deeply understands the trends shaping the industry. Producers can leverage this knowledge to guide policyholders in making informed decisions that protect their workforce and financial stability. 

A competitive and thriving market 

The work comp industry has maintained a solid combined ratio of around 90% for ten years. This indicates a financially sound market that remains highly competitive. Missouri is a prime example, with over 100 insurance groups and 340 underwriting companies actively writing work comp policies. The market has expanded significantly, from $900 million to over $1 billion in voluntary premiums. 

This growth has also attracted new competition. Carriers traditionally focused on personal line insurance are now entering the work comp space. They are seeking diversification away from other regional risks. For example, catastrophic wildfires and large legal verdicts affecting auto insurance. As a result, producers now have more options for clients.  

Economic pressures on the horizon 

Despite the market’s current strength, several economic factors could influence its stability in the coming years. Inflation has been a looming concern. Recent data suggests its impact is becoming more apparent. 

While the Consumer Price Index (CPI) rose by 6.3% in February 2025, a deeper dive into consumer spending habits reveals a concerning trend: spending on discretionary services like dining out and travel has declined. Since the service industry makes up a large portion of the U.S. economy, reduced spending in this sector could lead to lower employment rates. 

This presents a challenge for the work comp industry. Premiums are based on payroll. If businesses have fewer employees, payrolls will shrink, leading to a decline in premium revenue. For producers, this could mean policyholders need to reevaluate their coverage needs or anticipate changes in premiums. 

MEM’s perspective on inflation and medical costs 

Inflation also affects medical costs, a major driver of work comp claims. If payroll-based premium growth slows while medical expenses rise, then the industry could see increased pressure on its combined ratio. This scenario often results in rising insurance rates to compensate for the financial imbalance. 

Now is the time to help clients prepare. Employers should know potential cost increases and explore ways to control losses through safety initiatives, return-to-work programs, and strategic policy management.  

At MEM, we closely monitor these economic factors and their impact on our policyholders. Our team continuously analyzes industry reports and market data to ensure we remain proactive in helping businesses manage their work comp risks. 

How to use this information 

Industry organizations such as the National Council on Compensation Insurance (NCCI) and state insurance departments provide valuable insights through regular reports on market trends and cost drivers. MEM actively uses these resources to guide our strategies and support our policyholders with expert insights and proactive risk management solutions. Producers can use these insights to: 

• Educate clients about potential cost increases and strategies to mitigate them. 

• Differentiate MEM’s expertise and proactive approach in the marketplace. 

• Help policyholders improve workplace safety and risk management to keep costs under control. 

• Ensure businesses are prepared for economic shifts impacting their work comp coverage. 

While the work comp market in Missouri and the Midwest is strong, economic uncertainties require ongoing vigilance. Inflation, payroll fluctuations, and medical cost trends will all shape the industry’s future. By partnering with MEM, producers can provide clients with the insights and strategies needed to navigate these challenges while maintaining a strong, stable workforce. 

The post State of the Market: Key Insights into Work Comp in the Midwest appeared first on MEM.

Check out the video below to hear from Chris Grassi, MEM’s Premium Consultation Manager, as he shares what you need to know about certificates of insurance and independent contractors.  

Know your state laws 

Each state sets its own work comp requirements. Know what these requirements are for each state you work in – or plan to hire subcontractors from.  

Many general contractors make a critical mistake. They think that if a subcontractor isn’t required to carry their own work comp insurance, they are exempt from liability. However, this isn’t the case. 

Are you liable for injuries to subcontractors? 

A general contractor can still be held liable for any injuries a subcontractor sustains while working on their project. This is true even when a subcontractor isn’t required to carry work comp coverage. 

For example, a Missouri business owner hires a subcontractor to complete some plumbing work on his job site. The subcontractor doesn’t have any employees and isn’t legally required to get his own work comp coverage. If he’s injured on the job, then the business owner could still be held financially responsible for their injuries.  

Protect your business: Always request proof of insurance 

To protect your business, always request a Certificate of Insurance (COI) from any subcontractor you hire — even if they don’t have employees and aren’t legally required to carry coverage. This certificate shows they have work comp coverage, minimizing your liability risk. 

If your subcontractor doesn’t have coverage and gets hurt on the job, you, as the hiring contractor, could be responsible for their medical expenses and lost wages. 

Why should subcontractors carry workers compensation coverage? 

Even if a subcontractor isn’t legally required to carry work comp insurance, it’s often a good idea to do so. Why? 

• Many businesses won’t hire subcontractors without proof of insurance. 

• If an injury occurs, work comp can protect both the subcontractor and the hiring contractor from costly medical bills and potential lawsuits. 

Businesses that frequently hire subcontractors may also include work comp coverage as a standard requirement. Without proof of coverage, subcontractors may find it harder to secure work. 

The post Hiring Subcontractors: Do You Need Workers Compensation Coverage?  appeared first on MEM.

At MEM, we aim to make the process smooth and transparent. Having the right information streamlines the process and provides long-term benefits. This includes offering proactive safety services and personalized claims care to protect your team. 

Check out this video on what you need to know about your work comp quote: 

Here are the top 10 things you’ll need before submitting your work comp business: 

1. Client information. Have your full name, address, phone number, and email. 

2. Business start date. On what date did your business start? 

3. Federal employer ID number. This ID number is essential for your tax filings. 

4. Work comp loss history. Have you experienced a claim in the past? Prior claims may have an impact on your premium. 

5. Business states. Bring a list of every location where your business operates. 

6. Employee count. How many people work for you? Tally the total number of workers. 

7. Business operations description: What does your business do? Manufacturing, healthcare, or something else? 

8. Job classification codes: Each job role has a risk factor. 

9. Payroll amounts: Payroll figures for each job code help assess risk exposure. 

10. NCCI Experience Modification Rate (E-Mod): This factor plays a significant role in determining premiums. 

At MEM, we understand how to help businesses work with confidence. From premium calculations to safety programs, we’re committed to providing the resources needed to maintain a safe and healthy workplace. 

When you are ready to get your work comp quote, reach out to your work comp agent or visit https://www.mem-ins.com/find-an-agent/ to find an agent close to you. 

The post Your Workers Compensation Quote: 10 Things You Need to Prepare  appeared first on MEM.