Reserve Reduction Plan For E-Mods
Workers Comp reserve reduction review plans need to be on schedule. I have devised a formula for calculating when your reserve or E-Mod reduction plan should begin overall.
As I posted last week, you should start three months BEFORE your Unit Stat date. Sound confusing? – Check out the formula.
- Date that your reserve hit your NEXT YEAR’s E-Mod = Your renewal date + six months. For example, if 3/1/11 is your renewal date, your reserves tab to your E-Mod on 9/1/11.
- Preferable Date to start your E-Mod reduction plan – Your renewal date + 2 months Preferably, you would want to start your reduction plan by 5/1/11. Why? You cannot just call up your claims adjuster and say reduce these reserves today. It just does not work that way.
- Latest time to start your E-Mod reduction plan – Your renewal date + 3 months You would need to start your E-Mod reduction plan on 6/1/11 at the latest.
- Larger reserves take longer – a $300,000 file takes longer because the file has to be reviewed by the adjuster, supervisor, claims manager, and possibly the claims VP.
If your company is past the three month barrier, you may need to bring in outside non-agent expert help to get your E-Mods reduced. We have been able to reduce reserves with only two weeks before the Unit Stat date.
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