Work Comp experience mod

We just received notice of our new experience mod: 1.06.

We are thrilled, since this is our best one in a long time. I have never met someone with a rating less than 1, but the insurance companies tell us they are out there.

What are your ratings?


  • 16 Comments sorted by Votes Date Added
  • [font size="1" color="#FF0000"]LAST EDITED ON 02-10-05 AT 03:20PM (CST)[/font][br][br].80
  • That's great! Has yours always been this low?
  • I wish I could offer some great advice here, but I would love it if anyone else out there knows something about this.

    We switched insurance brokers almost 2 years ago, and they have been great about reviewing the w/c claims we submit and making sure they are filed correctly (correct job codes, files closed when done instead of being left open with a 'potential' balance, etc.). I think that is what has helped us. Of course having a couple of good claim years has helped also, but I think having someone who knows how to make sure the claims are correct has been our biggest help.

    There are consultants out there that will come to your company and review the last few years of w/c claims. If they can find errors, they will not only get your exp. mod. lowered, they can get you a refund from your w/c carriers for overcharge. (At least this is what I am told they can do, we did not actually use a consultant like this.)
  • Ours jumped from .72 to 1.01 within from 2002 to 2004 and continues at 1.03 for 2005. It has been painful as the exp. mod. directly effects premium costs. Depending on the nature of your company's business, it can also make your company virtually uninsurable. Some W/C insurance companies look at it as a measure of how well or how poorly an employer is managing its risk/safety process.

    For the 3rd year in a row, we renewed with a new company 1/1/05. 2003 & 2004 renewals yielded only one company each year willing to quote. For 2005, we found two companies willing to quote, neither of which was our 2004 or 2003 carrier. To help alleviate some of the insurance company's fears, we are cooperating very much with their consulting/advisory efforts to relook at our entire risk mgmt/safety process. The service comes at no extra cost.

    There are several factors that drive experience mod. Most all of them relate to expended dollars in claims, but there are variables in the claims process that may or may not be in your employer's control. Reorganizations and restructures in W/C insurance industry in 2002/03 meant that many of our open claims passed through several claims offices during the course of the claim. The net result was loss of information, loss of focus, and more money spent per claim, even with our company aggressively pushing claims staff for investigations and settlement offers. It seemed that once we would get claims staff up to speed on a specific claim, another reorganization would occur, the claim would move to a new location, new staff, we'd start the process all over again. It was frustrating. In the middle of that, our company's safety program suffered as well due to in-house turnover in key positions. New incumbents had to be brought up to speed. Employees in general lost focus of the importance of identifying/minimizing hazards and preventing injuries. I think we have begun to turn things around, but our exp. mod will most likely remain above 1.0 for 2006 & possibly 2007.

    We investigated having the administration of past claims verified for accuracy and were told that we could do that and may get refunds for overly generous awards, but a retroactive correction to the exp. mod would not occur.

    A good first place to start for insight and guidance might be the risk mgmt dept. of your W/C insurance carrier. Invite their input. You may find tht they can be helpful. Return your company to fundamentals: firm policies, accurate & timely incident reporting; investigate incidents; training/education on safe work practices; track/analyze data for strengths/weaknesses & work to identify solutions for areas of opportunities; communicate information to appropriate mgmt staff and corporation safety philosophy to employees.
  • Ours is 1.28. We were at 1.85 so we are slowly coming down.
  • I called our carrier who said she did not know, that I would have to get it from my corporate office. I'm not even sure what the figure represents or from where it is derived. I do know that I'm getting eaten alive on the cost-per-employee formula where I'm expected to be at .10 and way up around 2.4.
  • The rating is established by the National Council on Compensation Insurance, Inc., (NCCI). I understand that a 1.0 rating means your work comp claims are average for your particular industry. Thus, a rating over 1.0 means your claims are higher than the industry average, and a rating under 1.0 means your claims are lower than the industry average.

    I started trying to understand this whole system when our rating hit 1.65 a few years back. Some of the control for this rating is simply keeping work comp claims to a minimum, but some of it is making sure that the work comp companies are reporting your claim information correctly. And yes, your work comp rates are directly related to your experience mod.

    The details of the whole process are still a little confusing to me, but I'm trying to learn more about it. (KNOWLEDGE IS POWER! or something like that...)
  • Good synopsis.

    Don D, if you have copies of prior quotes, the exp mod should be included in the data somewhere near where the proposed premium is calculated. It's part of the fundamental information a W/C insurance company needs to be able to give an accurate, presumably competitive, quote.

    You might check your W/C class codes and ensure that your folks are properly classified. Classification is another of the variables that has a direct impact on the amount of the premium (# payroll $$ per class code x W/C valuation per class code). The more risky the job, the higher the cost for that class code. Improper classifications on the high side will cost your company too much money. Improper classifications on the low side will risk reconciliations and potential allegations by your carrier of intention efforts to defraud for a lower premium.

    We work diligently with insurance carrier help to review our class codes, and we conduct semi-annual audits (with their help) on payroll history to ensure accuracy. We are a retirement community with residential construction, skilled health care, recreational services that includes a boat on a popular river, emergency response (including fire), and until a couple of years ago had a pistol-carrying security officer. We can generally find industry-specific W/C insurers who are willing to dissect our organization into industry-equivalent components, but it is difficult for us to find a single carrier interested in the whole unit. While our EM is still respectable, the sudden rise became an obstacle. Through attrition we gave up the security position and began to rely on county support, which made things a little easier. I think we'd have to go self insured if we still had that position.
  • 1.34 x:'(

    ...but my acct. rep tells me that we should come down significantly next renewal because some huge honkin' claims will fall off and our injury rate has declined steadily. Just hoping 1.0 or less come April!
  • Last three years in order: 1.62, 1.55, 1.44.

    We are on the right track but not where I want us to be...
  • I cannot win for losin'. We have accidents out the wazoo. This morning (sat) I went in at 5:15 to cook 200 sausage dogs for the shift that started at 5:00 a.m. I had it ready with all the fixings promptly at 6:50 break. All went well until an employee loaded up her sausage dog, started across the patio, slipped, her feet skyward, and landed squarely on her backside. I sent her home, knowing that she won't get out of bed tomorrow. I personally fell and busted it on November 19, responding to a fire and explosion and am having knee problems. Continual back surgeries, bilateral carpal tunnels, and fools like me falling.....not sure what the answer is. And I'm also the safety manager and comp administrator.
  • You hit the nail with your recognition that minimize W/C costs is a challenge. It has to be a team effort--no way one person can have an impact.

    One of my prior employers had a very good success rate by focusing (almost to the point of extreme) on training, training, and more training. It was a huge investment, probably an amount that would rival other less informed organizations' W/C costs, but their philosophy was that they were having a positive impace on the overall community by putting the safety message in front of our faces so much that we would have no choice to assimilate it, carry it over into personal practice away from work, and teach it to others (including family), and the organization was large enough (international) to justify the spending. Their effort continues to be a very sophisticated effort. They are self insured, so every $$ saved in claims/W/C costs is a direct savings to the company.

    My current employer is much smaller, nonprofit, harder to justify the training costs, but we are trying small things as we too have a significant number of incidents. 2002 incidents were well over 100 with OSHA recordables at 50+. Within the past year, we have attempted to organize the safety/risk mgmt effort a little better by dedicating staff to the function. Simple electronic data tracking (in Excel) has helped us identify some obvious trouble spots (soft tissue injuries from patient handling and other lifting and injuries from slips/trips/falls). We simply began to track in a way that is meaningful to us the costs of injury per type of injury, outside the loss run reports available from our W/C insurance companies. Those of us closest to managing the process had hunches, but seeing the data in black and white made it real. The results have been startling and, as a result, we have instituted a number of mechanical lift devices, better training about back care/lift techniques in departments that must assist people with mobility. We have also recently incorporated a slip resistent shoe in areas that appear (by our historical data) to be prone to such, i.e., workers that must work in kitchens, showers, bathrooms, and similar functions. About a year ago we became aggressive with an early return to work program and successfully reduced our lost time days from 360 in 2003 to 143 in 2004, yielding a savings in lost time wages and overtime as well as sending a message to employees that we are serious about getting folks off the sofa after a W/C injury. These are baby steps, but baby steps are a good start. Given time, they begin to add up to significant forward momentum.

    One of my philosophies is also that when employees' attention is direct to the recognition of potential hazards, an awareness seems to develop or one that is already there is tapped into. Employees generally enjoy the attention received in training, even if it is minimal (recall the Westinghouse studies in business classes?). When our employees are at home, they most likely intentionally do things to avoid injury that will lead to impairment. They really don't want their lifestyles changed, nor do they want to be inconvenienced. We should expect nothing less at work.

    Best wishes for much success.
  • [font size="1" color="#FF0000"]LAST EDITED ON 02-14-05 AT 01:29PM (CST)[/font][br][br]Our 2005/2006 is our highest at 1.08
    2004/2005 .99
    2003/2004 .84
    2002/2003 .87

    Apparently your current mod rate is based on your worker comp exposure for 2002/2003 year. It is a 3 year gap so if you had bad w/c experience last year it will affect your 2007 mod rate. Pretty screwy but true we had 1 back injury totally disputed but not a good W/C carrier the claim stayed open too long no investigation and now we are paying for it this year. The rate is still pretty descent due to us beng in manufacturing.

    I concur with stilldazed you need to have a good relationship with your broker and your carrier. Workers Comp companies offer many benefits such as on site evaluations, ergonomics evaluations and recommendations at no additional cost. Some if not all provide all employment posters for your Fed and State requirements. All you need to do is ask them about the services they offer to their customers.
  • Our ex-mod is currently .88, up from .78 last year. Ex-mod is calculated by a series of complex formulas, which take into account expected losses versus actual losses and several other factors. It is a very important number, since an ex-mod under 1.0 will reduce the worker's comp premium. For example, our premium is multiplied by the factor of .88 to calculate the final premium amount. Ex-mod is affected by several factors, especially claim history. Claims stay on for a period of three years, so an expensive claim can affect your ex-mod and premium for some time after it occurs. It is very important to work with your carrier to reduce claim costs, especially the amount that the carrier puts on a claim for reserve costs.
  • Our rating went from .99 to .69 this year. The 30-point drop brought a substantial reduction in premium. (about 20-25% as I recall) Anything over 1 is indeed considered "high" but it doesn't take much to get there.

    I have found that the claims actually stay on your record for 5 years. They become less significant after 3, but drop off totally after 5. We had 2 big accidents in 2000 that pushed us well over 1.0. Assuming no major claims this year, I expect our rating to drop like a rock again next year when they are totally off our record.

    It's not just the number of claims, but the dollars involved. The NCCI mails their annual report to the employer in late fall. Your carrier and your broker certainly know your mod and can give it to you if you aren't rec'g that report from Finance or whoever in your company.

    Tip: we have started to investigate the bogus claims aggressively through our carrier's fraud unit in past few years. I'll be damned if the number of claims hasn't dropped since then. Coincidence....?
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