Controlling You Workers Compensation Experience Modifcation
Robert Levine, Allied North America of New York, LLC
If you qualify, your workers Compensation policy and premium includes a factor called an Experience Modification. The true calculation takes several factors into consideration. The better your ratio between actual and expected losses, the better your mod. The number of claims has a larger impact on your mod than the size of the claim.
The WC modification takes into consideration your claims history and actual payrolls by code over a three year period. The data from the current policy is not used. A Unit Stat card is sentby the Insurance Carriers to the organization promulgating the mod, six months after the policy expires. This will include both payroll information and current claim data. Once the Unit Stat card is sent, typically only a mathematical error can change the information.
It is vital to meet with your Agent and discuss your claims history prior to the Unit Stat card being sent. It is recommended that a representative from all of the Insurance Carriers attend the meeting. Look for any dramatic changes in the value of any claims. Review the reserves that are set up. Discuss any open claims where the injured employee is back to work. Be sure to advise the carrier of any claims that should be investigated. Be sure the carrier has enough time and documented information to review the results of the meeting. This way they can make any adjustments necessary.
There are some additional suggestions you can apply to control your Experience Modification:
1) Implement a loss control program including regular safety meetings
2) Pay small claims where applicable by law
3) Prepare a test modification
4) Review the impact of ownership when multiple companies are involved
5) Keep track of subrogation results
6) Validate the accuracy of payroll and class codes
7) Order a copy of the Unit Stat Card between 4-6 months after your expiration date
8) Purchase and distribute safety equipment for workers
9) Review your hiring practices
The impact of your mod can be very costly. The Workers Compensation premium is calculated the same for you and your competition. If their mod is controlled and lower than yours, they will be more competitive in their bids. Feel free to contact me to discuss the specifics of your modification.
