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Three Top Ways Experience Mod System Can Help Your Company

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The Experience Mod System’s Hidden Good Side

The Experience Mod system can actually silently help your company. The Workers Compensation Experience Modification Factor (E-Mod/X-Mod/Ex-Mod) system can seem complicated and cause very high premiums at times. Three times over the last few weeks, I have heard or read different inaccurate comments about the E-Mod system.

Picture of Employees Experience Mod System WC
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I thought I would post a reply to those comments by pointing out how the E-Mod system may actually help your company.

  1. One bad claim can ruin our E-Mod – In most states, The E-Mod system has a maximum claim amount that can be charged to your company’s E-Mod. As I have posted in the past, four $25,000 claims are much harmful than one $100,000 claim. One bad claim will not hurt your company. Rating agencies realize that companies may have one serious accident in the course of doing business.
  2. We pay our small claims out of pocket – The E-Mod system will discount the medical only claims by some factor – usually 70%. There are many dangers when paying your small claims out of pocket such as medical control. The 70% discount was designed to encourage employers to file all Workers Comp claims with their carrier.

    Hand Presenting Experience Mod System Health Insurance Icon
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  3. One bad year of claims would ruin our insurance program – The E-Mod system does not balance this out as well as #1 in the list. However, the E-Mod system can keep your company from taking such a hit to your insurance premiums by spreading the risk over three years of Experience data. This is one of the advantages of paying regular insurance premiums and not being a large deductible or self insured unless your company or organization is large.

I am not that big of a fan of the Experience Mod system. It is the one in place. Winning the E-Mod battle means playing by their rules. The E-Mod system does have a few penalties built in for employers that wish to play by their own rules. I will comment on that next time.

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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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