Category Archives: Reading your MOD Worksheet

A quick overview on rading your experience MOD worksheet.

Uncovering Loss Cost Multipliers

I’d written previously about knowing your carriers LCM and why that’s important to you.  If you don’t know what it is, start HERE

If you’re ready for step two, I’m sharing links to the various states LCM’s.  These aren’t always easy to find and some states deliberately don’t publish them.  In some instances, the link will go directly to a list, others will involve another step or two to complete the search.

Note, even if the list is dated as you’ll see in some jurisdictions, even if the filed LCM has changed slightly, it’s most likely the order of the pricing tier remains accurate.  For example, if a carrier has 5 pricing tiers in a state and you’re in the highest, even if the LCM has changed slightly, it’s still most likely that carriers highest rated pricing tier.

Continue reading Uncovering Loss Cost Multipliers

Start the clock… 3, 5, or 7 days before lost wage payments?

Check out this quick chart for answers on what the waiting period is in your state or province before lost wages kick in from workers’ compensation.

What is the retroactive period when an employee is able to recoup those first unpaid days?

How about who gets to direct care?

It varies by state.  The answers are here!

Continue reading Start the clock… 3, 5, or 7 days before lost wage payments?

Be on the lookout!

Have you ever noticed a scheduled credit on your policy?  Ever wonder why it’s there?

Often times brokers are able to negotiate these on  your behalf, but sometimes the scheduled credits are adjusted based on the experience MOD changes.

Picture this…

It’s 2017 and you’re at the last year of your debit experience MOD of a 1.25.  Your current WC policy for that year has a scheduled credit of .80, easing some of the pain of your current debit MOD rating.  Your renewal policy comes in for 2018 with a new MOD of .78 and low and behold your scheduled credit is now a scheduled debit of 1.10.  What gives?   Virtually all of the premium savings you were expecting is gone!

Continue reading Be on the lookout!

Injury Types- What is Permanent Partial?

When reviewing your loss runs or mod worksheet you’ll run into the codes or following descriptions.  A quick overview of the common injury types are outlined below.

  • Fatal—Death claims ƒ
  • Permanent Total—Claimant expected to never be able to return work ƒ
  • Permanent Partial—Claimant expected to return to work but with some permanent impairment or disfigurement ƒ
  • Temporary Total—Claimant expected to recover fully ƒ
  • Medical Only—No benefits for lost wages are expected to be paid

MOD Quick Check

You’ve got your MOD Sheet and you already know how to read it.
A quick review of key pieces of information and areas we’ve discovered over the years that can be addressed quickly.

  1. The Policy Dates are Correct!  (It sounds simple, but changes in renewal dates, wrap-ups, mergers, sales and even asset purchases can lead to mistakes or not getting the full credit for you actual exposure!)
  2. Were any claims under subrogation?  Even partially?
  3. How do the claims compare?  Do you see any significant discrepancies between your losses and your MOD sheet?  If so, dig deeper and understand why and where the differences are!
  4. Do the payrolls for every policy period match your audited payroll figures?  If you paid additional premium one year in an audit, you want to make sure you’re getting credit for that additional payroll and premium on your EMR!

If red flags go up as you’re checking your MOD sheet, take notes, send your agent a quick email and make sure you KNOW and UNDERSTAND you’re getting rated correctly!

Wait, I don’t have an Experience MOD?

So what if you don’t have an experience rating?  In order to qualify for a rating with NCCI, you need to meet certain criteria.  These qualifications can and do vary by state, but you first need to meet the states minimum premium level for experience rating.  If your premium was $6750 but that was including a MOD rating of 1.5, you don’t actually qualify for a MOD since your standard or manual premium is actually only $4,500 if your state had a $5,000 manual minimum premium limit to qualify.  In this instance, having a manual minimum premium below the eligibility requirements actually saves you from a debit experience rating!

Experience Rating Eligibility in Maryland.

A risk is eligible for intrastate experience rating when the payrolls or other exposures developed in the last year or last two years of the experience period produced a premium of at least $10,000.  If more than two years, an average annual premium of at least $5,000 is required.

 

As I mentioned, the eligibility amounts vary by state.  As of 10/4/2017 the NCCI requirements are listed below.

2. State Subject Premium Eligibility Amounts

(Exceptions: MA, TX)

(Additional Rules: OR)

A risk qualifies for experience rating when its subject premium, developed in its experience period, meets or exceeds the minimum eligibility amount shown in the State Table of Subject Premium Eligibility Amounts in Rule 2-A-2-c. Refer to Rule 2-E-1 to determine a risk’s experience period.

a. A risk qualifies for experience rating if its data within the most recent 24 months of the experience period develops a subject premium of at least the amount shown in Column A.
b. A risk may not qualify according to Rule 2-A-2-a. If it has more than the amount of experience referenced in Rule 2-A-2-a, then to qualify for experience rating the risk must develop an average annual subject premium of at least the amount shown in Column B. Refer to Rule 2-A-3 to determine average annual subject premium.
c. A risk’s rating effective date determines the applicable Column A and Column B subject premium eligibility amounts required to qualify for experience rating. Refer to Rule 2-B for rating effective date determination.

State Table of Subject Premium Eligibility Amounts

State Rating Effective Date Column A ($) Column B ($)
AK 7/1/17 and after 5,000 2,500
6/30/17 and before 5,000 2,500
AL 9/1/17 and after 10,000 5,000
8/31/17 and before 10,000 5,000
AR 1/1/18 and after 8,000 4,000
12/31/17 and before 8,000 4,000
AZ 7/1/17 and after 6,000 3,000
6/30/17 and before 6,000 3,000
CO 7/1/17 and after 8,500 4,250
6/30/17 and before 8,000 4,000
CT 7/1/17 and after 11,500 5,750
6/30/17 and before 11,000 5,500
DC 5/1/18 and after 7,000 3,500
4/30/18 and before 7,000 3,500
FL 7/1/17 and after 10,500 5,250
6/30/17 and before 10,000 5,000
GA 9/1/17 and after 10,500 5,250
8/31/17 and before 10,000 5,000
HI 7/1/17 and after 5,000 2,500
6/30/17 and before 5,000 2,500
IA 7/1/17 and after 8,000 4,000
6/30/17 and before 7,500 3,750
ID 7/1/17 and after 6,000 3,000
6/30/17 and before 6,000 3,000
IL 7/1/17 and after 10,500 5,250
6/30/17 and before 10,000 5,000
IN 7/1/17 and after 5,000 2,500
6/30/17 and before 5,000 2,500
KS 7/1/17 and after 8,000 4,000
1/1/16 to 6/30/17 6,000 3,000
12/31/15 and before 4,500 2,250
KY 4/1/18 and after 10,500 5,250
3/31/18 and before 10,000 5,000
LA 11/1/17 and after 10,500 5,250
10/31/17 and before 10,000 5,000
MD 7/1/17 and after 10,000 5,000
6/30/17 and before 10,000 5,000
ME 10/1/17 and after 9,500 4,750
9/30/17 and before 9,000 4,500
MO 7/1/17 and after 7,000 3,500
6/30/17 and before 7,000 3,500
MS 9/1/17 and after 9,000 4,500
8/31/17 and before 9,000 4,500
MT 7/1/16 and after 10,000 5,000
6/30/16 and before 5,000 2,500
NC 4/1/16 and after 10,000 5,000
3/31/16 and before 8,000 4,000
NE 8/1/17 and after 6,000 3,000
7/31/17 and before 6,000 3,000
NH 7/1/17 and after 11,500 5,750
6/30/17 and before 11,000 5,500
NM 7/1/17 and after 9,000 4,500
6/30/17 and before 9,000 4,500
NV 9/1/17 and after 6,000 3,000
8/31/17 and before 6,000 3,000
OK 7/1/17 and after 10,500 5,250
6/30/17 and before 10,000 5,000
OR 7/1/17 and after 5,000 2,500
6/30/17 and before 5,000 2,500
RI 2/1/18 and after 10,500 5,250
1/31/18 and before 10,000 5,000
SC 3/1/18 and after 9,000 4,500
2/28/18 and before 9,000 4,500
SD 1/1/18 and after 8,000 4,000
12/31/17 and before 7,500 3,750
TN 9/1/17 and after 9,000 4,500
8/31/17 and before 9,000 4,500
UT 6/1/18 and after 7,000 3,500
5/31/18 and before 7,000 3,500
VA 10/1/17 and after 7,000 3,500
9/30/17 and before 7,000 3,500
VT 10/1/17 and after 8,000 4,000
9/30/17 and before 8,000 4,000
WV 5/1/18 and after 9,000 4,500
7/1/08 to 4/30/18 9,000 4,500

 

Experience Rating Plan Manual should be referenced for the latest approved

 

Experience Rating Formula

Some of you have asked about the actual formula.  Here it is!

The experience rating modification formula:

Is used to determine the experience rating modification for all risks eligible for experience rating.
Includes the data of all states in a risk’s experience period to produce an experience rating modification.
Primary Losses Stabilizing Value Ratable Excess Totals
Actual Primary Losses + (1 minus Weighting Value)
x
Expected Excess Losses
+ Ballast Value + Weighting Value
x
Actual Excess Losses
= Total A
Expected Primary Losses + (1 minus Weighting Value)
x
Expected Excess Losses
+ Ballast Value + Weighting Value
x
Expected Excess Losses
= Total B

For the experience rating modification, divide Total A by Total B, then round to two decimal places.

Need help with your ERM/Experience Rating/MOD?

We continue to offer assistance in any area providing experience rating analysis and experience mod management services.
All consultations are confidential. If you or your agent don’t have the resources available, don’t hesitate to give us a call.

We can provide:

  • Premium costs of various losses
    Minimum MOD
    Breakdown of potential premium savings for medical only claims (ERA states)
    Future MOD projections
  • Suggestions to improve the rating, and MOD verification
  • Mod Comparison available for repeat customer Experience MOD reviews

Call or email for options, pricing, and availability.  In some cases, there may be no cost to you for this service.

 

 

Wait, why is this claim on my mod? It wasn’t even my fault!

Yet another reason the MOD shouldn’t be used as a bid qualifier.

I was recently working with a company who was quite upset seeing a jump in their experience rating from an auto accident they were not at fault for. The accident involved an employee driving in a company vehicle to a jobsite. In every state, Workers’ Compensation is the primary carrier. That means, comp pays first. So in the case of an auto accident, if an employee of yours is injured while working, the workers’ compensation policy will pay first for the injured employee’s injuries (after medpay on the auto where applicable). In a severe accident, medical bills can quickly add up. Add a $100,000 workers’ compensation claim to most experience mod’s and will likely see a noticeable jump in the experience rating when it hits!

There is a silver lining. Should the claim get subrogated and the workers’ comp carrier is returned some or all of those funds paid on the claim, the MOD’s will be adjusted. The bad news is this could be several years after the accident, and after you may have already lost jobs due to the high mod, run into difficulty in the insurance marketplace finding competitive rates, etc. While the direct costs of the experience MOD will be returned if subrogation was successful, the indirect costs are unfortunately not recoverable.

The point is, take extreme caution when looking and bidding jobs when the experience MOD is a factor and be aware of how the experience MOD can impact in more ways that you might typically think. Are you competitors using the same qualifying factors? Is the prime contractor aware of the possible different rating factors at play? Were any of the claims that brought your rating above a 1.0 out of your control or not the fault of your company or your employees?

Also, be sure to stay on top of your claims. Subrogations can take time and if you’ve made changes in carriers or agents over the years, you may need to bring everyone up to speed to get the assistance you need to make sure you at least recover some of excess premiums paid!