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EMod XMod Changes Coming Soon – Very Important

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EMod XMod Changes Upcoming Will Change Premium Audits

WC EMod XMod changes upcoming  may cause a new type of review. As I had posted a few months ago, the NCCI(R) has invented a new way to promulgate (calculate) Experience Modification Factors (E-Mod/X-Mod). I just received notice that the rating bureau for California -WCIRB- is preparing to follow suit. The new E-Mods are based somewhat on a different set of statistics. Will all companies’ E-Mods change from the former calculation? This is a yes and no answer.

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If your company does not have any claims, the E-Mods/X-Mods will not change significantly. If you have more than one or two claims, it will change dramatically. This is going to change the rules on how companies such as ours perform Premium Audit reviews for employers. The way that it is being done now will be a thing of the past.

What one area will employers and companies such as J&L have to be very versed in to be able to do accurate Workers Compensation premium audits for employers? How I found out was by reading the statistical study used as a basis for the change. It was buried deep in the study.

I am glad that we are strong in that area and have been doing very similar reviews for 14 years. We were lucky.  You heard it here first.

EMod XMod Calculations Changing 10-1 Will Indirectly Affect Premium Audits

Premium audits structure changes soon.  The structure of doing premium audits and E-Mod/X-Mod reviews are Changing October 1st. All the rating bureaus will be changing how they calculate E-Mods including California. As I said in the last post, there are some major components of claims that will need to be examined more closely after the new changes.

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Without becoming too technical, a claims review background will now be needed to fully understand how companies’ E-Mods/X-Mods are calculated. The E-Mod/X-Mod calculation sheets will even look different. Unfortunately, the formula for calculating the E-Mods/X-Mods will now be more complicated. The new rules will add on multiple columns of claims information where before there was only an injury code, status code, and the total incurred figure.

A loss run review is now even more important.  Pulling or requesting a current loss run will make reviewing the loss run easier.  I have posted numerous times about having online access to your claims information. This will now even be more important. Having inaccurate claims information will be very costly.

I will post more on this situation after the first of next month when the changes become effective.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt 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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