Emod Changes – A Correction To One Figure
The Emod Changes articles that I wrote last week had a slight error. The E-Mod/X-Mod changes that I posted over the last two weeks had an error in them. I rarely ever go back and correct or change a post. This time I thought that I would go ahead and correct it.
The link to the post is in the last paragraph. Unfortunately, the NCCI had the 2014 Primary Loss figure at $13,500. I originally calculated the Primary Loss at 13,000. The correction actually increased the Mod another .01.
If you are not self-insured, I would heavily recommend looking over the two posts on the 2013 and 2014 changes to the E-Mod. The NCCI has decided to build in an increase for the unsafe companies and to reward the safe companies by increasing the Primary Loss and reducing the Excess Loss.
The basic effect is that in a three-year time span the Primary Loss is going to increase from 5,000 to 15,000. The primary losses are basically where workers compensation insurance is charged at the highest rate.
The Excess Losses have a discount factor and figure into the E-mod at a much less severe rate. If your state has its own rating bureau, they are very likely going to follow the same model. I will post in the next few weeks whether or not any of the State Rating Bureaus are going to use the new model.
The NCCI and most other rating bureaus are going to increase the Primary Loss again in 2015 and then build in an inflation factor for 2016 and beyond. It is time to take control of your E-Mod now. Your company should try to monitor any Emod changes to your rating bureau account.
©J&L Risk Management Inc Copyright Notice