Auditing Workers Comp EMods or XMods – Tricky Stuff
By Auditing Workers Comp EMods or XMods, you may find premium savings or you could blow up your program.
Workers Comp E-Mods (X-Mods in CA) can save your company a large amount of premiums if kept in check.
Is trying to make sure that your E-Mod / X-Mod worth your time? I had listed a few pointers before you undertake this arduous task:
- Is your E-Mod (X-Mod) high enough to warrant any type of review? If your Mod is below .8, you may find spending your time elsewhere in your Workers Comp program as being a more efficient use of your time. I am not saying that a .8 E-Mod is the best possible. You may find the next point to be the best place for your efforts.
- Does your company have a viable safety program in place? If not, you may not being using your time wisely. A full-fledged safety program should be priority #1. If your company’s safety record is not that great, creating or updating your safety manual may be the best place to start.
- Realize the Mod system is a delayed system. Your current efforts will only show up in subsequent years. Patience is a required virtue with the Experience Mod system. Your saving efforts will show up proportionately, not all in the first year.
- Do you have updated loss runs? Are they older than two weeks? Do you have the precious and very valuable real-time online access to your reserves? If not, your E-Mod review may be out date as soon as you finish it.
123rf - Do you have access to your last four years rating bureau reports? If not, you may not be able to know whether or not the right loss run figures went on the right rating bureau report.
- Have you read over at least the basic rules for X-Mod calculations? I have been doing them for many years for clients. They make my head spin sometimes.
- Do you have a software package that can help you calculate the Mods? Be very careful at this point as not all software packages are that easy to use. The old GIGO model may show up here (Garbage In = Garbage Out)
- Each state may have its own peculiarities on some of the inputs to the Mod system.
- Do you have a copy of all your policies and audits from the last four years?
If you are in the midst of analyzing your E-Mod (X-mod) and you have any questions, please feel free to contact us.
If you have already started an analysis or have decided to do one after reading this post, you are already saving your company Workers Comp $. You are paying attention to your WC, which is a great first step.
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