Experience Period Does Not Operate In The Present
The Experience Period is the interval in which loss and exposure data is used to calculate the experience modification factor for an employer. In normal circumstances, the time period is 3 years and begins 4 years in the past. However, if the employer’s premiums become exceptionally low during any of the 3 years in this period, the employer becomes ineligible for experience rating.
The Workers Compensation rating system is a delayed or laggard system. The lagging system drives many CFO’s, Risk Managers, and Safety Personnel up the wall. A great safety program installed by an employer will show results if a company or organization is patient. In the age of the smartphone, instant results rule the day.
The claims your company has experienced in the current and last policy period do not apply the Experience Modification Factor. Many companies make the mistake of not being patient with their current safety and loss control programs. They may be working fine. However, they may not show fully in the Mod Factor for months or years.
Some employers have even eliminated or downsized their Safety and Risk Management Departments with a pending E-Mod drop. The drop often justifies the employees or departments.
The Experience Period may reach back 57 months into the past. This does not mean to give up on your safety program. Constantly and consistently instilling safety in your company’s workplace pay dividends.
Obtaining a copy of your Rating Bureau worksheets will show you which policies apply to what E-Mods in your Experience Period.