If you are not managing your experience modification monthly and you do not completely understand how injuries effect this factor that adjusts your workers compensation premium every year, you might want to pay close attention to what is coming.
The National Council on Compensation Insurance (NCCI) has recently introduced a new methodology for rate-making, the process which ultimately affects the “manual rate” you pay on your workers comp premium. This new rate-making methodology does not impact the actual experience mod formula. However, for some class codes, significant changes in the filed loss costs, driven by the new rate-making methodology, will lead NCCI to also adjust expected loss rates (ELRs) and D-ratios by class code. This in turn may cause your mod to change, even if all other data (payroll and losses) stayed the same. Although the overall intent of these changes is to keep most experience modifications – and the premium you pay – at about the same level, the exact impact on your mod – either positive or negative – it won’t be known until NCCI’s filings for the state(s) you do business in are published. Businesses which are required to have a mod of 1.0 (or other value) in order to bid on jobs will want to be especially careful to anticipate this change and minimize any losses that do occur through good injury management and claims management efforts.
Three Sixty safety specializes in helping our clients understand and manage their experience modification. Please contact one of our representatives to help you get a crystal clear understanding of how your experience modification impacts your business costs and profitability.
