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Safety Council Conference Presentation For Mid State


North Carolina Mid State Safety Council

I presented yesterday at the North Carolina Mid State Safety Council’s conference on Ways to Cut Workers Compensation Costs. When I brought up the subject of how $25,000 = $100,000, I received a few questions after the conference. I thought it would be good to share it with the blog readers.

North Carolina Map Safety Council with Mountain Inside And Circle US flag Background

We do have potential clients call and ask why their E-Mod increased when they have had no large claims. This post may explain some of the reasons.

The easiest way for me to explain this one is for everyone to look at their Workers Compensation Experience Mod sheets from the NCCI or your state rating bureau.

The Workers Compensation system is designed to penalize employers that have many small claims versus an employer that has one very large claim. Why? Because the likelihood of a group of small claims having one or more of those claims turn into a big claim is very likely from a larger group of small claims.

Discount Tag Safety Council Picture

How this works is that the Primary Loss portion of a claim is capped at $5,000. The Excess Portion (anything above $5,000) of the claim has no cap but has a discount factor. Look at the bottom of column A on the NCCI sheet. There should be a number there such as 020, which is 20%. The Excess Portion of the claim is multiplied by this factor, which in essence gives you an 80% discount on the Excess Portion of all claims. It is much more complicated than that, but we are just keeping it simple here.

OK, hang with me on this one.

  • $100,000 claim = $5,000 Primary + ($95,000 *.2) = 24,000 applied to Mod Calculation
  • Five $5,000 claims = 25,000 Primary = 25,000 applied to Mod Calculation

The conclusion to draw from this is that there are NO SMALL claims. The first $5,000 is being applied at a rate of FIVE TIMES the rate of everything after the first $5,000.

Please note this does not count the Medical Only claims.

What should an employer do to combat the NO SMALL CLAIM costs? I will cover that in my next post.


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Experience Mod Predictions Accurate?

Experience Mod Predictions – Accuracy Depends on Who/Whom You Ask Most Experience Mod predictions can be a tedious process that has cofounded most people working

James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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