A quick overview on rading your experience MOD worksheet.
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.
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?
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New Dates and Locations Updated Regularly
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!
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.
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.
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!
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 $5,000 is required.
As I mentioned, the eligibility amounts vary by state. As of 10/4/2017 the NCCI requirements are listed below.
A risk qualifies for experience rating when its subject premium, developed in its experience period, meets or exceeds the minimum eligibility amount shown in the State Table of Subject Premium Eligibility Amounts in Rule 2-A-2-c. Refer to Rule 2-E-1 to determine a risk’s experience period.
|
| State | Rating Effective Date | Column A ($) | 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
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.
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:
Call or email for options, pricing, and availability. In some cases, there may be no cost to you for this service.
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!
