Starting January 1, 2013 NCCI (National Council on Compensation Insurance) is changing the methodology in determining individuals experience modification factors. The result could mean higher mods, and additional premiums in 2013, for employers with poor claims experience. This is the first time in almost 20 years that NCCI has adjusted the rating formula. The basic change to the calculation is increasing the primary losses or split points from $5,000 to $10,000 in 2013, to $13,500 in 2014, then $15,000 in 2015. This change is needed due to the average claim cost increasing almost 300 percent since the last change. Employers experiencing higher frequency of workers comp claims will see a higher experience mod due to the weighted formula.
Employers are going to have to really stress the importance of their safety program and risk management. Having a strong “return to work program” will also be a huge benefit. Reducing workplace injuries will now have a more dramatic impact on your bottom line. Additional premiums will not be the only impact of a higher mod. It is becoming more and more common for business’s to refuse to do business with companies that have an experience mod over a 1.0. Now that you know the change is coming, are you ready to do a better job controlling workplace injuries, in an effort to keep your mod as low as possible?
