ERM 14 – Workers Compensation Confidential Request for Ownership Information – What It Is and How It Works

ERM 14 is a form used to report ownership changes in a business for the purpose of determining the combinability, transfer, retention or possible exclusion of prior workers compensation claim and payroll data used in experience rating the new business entity. Developed by NCCI, a workers compensation advisory organization, the ERM 14 provides a mechanism on which to report confidential ownership information for consideration by the advisory organization. The ERM 14 then is a tool used in determining the effect combination of entities and changes in ownership may have to the experience rating of the entities involved.

To find a blank copy of the form visit our ERM 14 webpage where you’ll also learn more detailed information about its use, instructions on how to complete it and where to submit it once completed.

Designed to be completed by the employer, you’ll find this to be a somewhat complicated form and sometimes replaced by a written narrative produced by the entities involved in the sale or transfer of ownership. In more complicated transactions, with multiple entities involved, the completion of both an ERM 14 and a supplemental narrative may be helpful in fully describing the sale or transfer transaction.

The ERM 14 is just a part of the combination of entities and change in ownership process as it applies to workers compensation experience rating. Reporting these changes is a requirement outlined by a countrywide endorsement, WC000414, which is attached to all policies in NCCI states. This form requires the policy holder, employer, to report any changes in ownership within 90 days of the change. Of course subject to state specific exceptions. It doesn’t matter who submits the form or narrative to the advisory organization but one of the requirements is the proper signature of an owner of the entity. You can get an ERM 14 form by contacting your insurance agent or insurance company.

Once the ERM 14, narrative or both are received, the advisory or rating organization will first make a determination if a change actually occurred. They will review the submitted information and make a determination how the change in ownership will effect the experience rating for all entities involved in the transfer. Often additional information may be requested in order to better understand the actual change.

Once the rating organization makes a determination of the effect the change will have, they will notify the entities involved by way of a “Ownership Policy Letter.” They will then produce and send to all interested parties, the employer and insurance carrier, a calculated or recalculated experience modification rate as it applies to the new entity.

What if the owner disagrees with the determination? What can they do? An owner may use the three level dispute process to voice their disapproval with the determination. 

Just keep in mind the ERM 14 or some other form of written notification, narrative or otherwise, must be submitted within 90 days of a change in ownership. As a side note, if you need assistance completing the form be sure to ask for it! Start with your workers comp agent. They should be able to help you complete the form. If they cannot, then contact your insurance carrier direct, they may have someone who can help. Of course you can always contact our office and we’ll do our best to help!

I’ll have more about ownership changes, how they effect experience rating and what needs to be done in case of a mistake in the next post.

Hope this helps you out!