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Experience Modification Factor (E-Mod/X-Mod) Question

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The Experience Modification Factor Basics

A great Experience Modification Factor Factor email came in last week.. Our E-Mod has changed a large number of times over the last year.  Why does our E-Mod keep changing?  How many times can an E-Mod change in a policy year? 

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I actually paraphrased the above question from a company that found us through a Google search.   The employer operates in 11 states.  This makes them subject to NCCI’s Interstate Mod calculations.

Without knowing more on the particular employer situation, I would say the following are some of the reasons for an E-Mod to be changed by NCCI:

  • Your annual Unit Stat Date – the drop dead date where the Total Incurred per claim is reported to NCCI or other rating bureaus.   This is the original E-Mod publication date in most cases.
  • Current or prior carrier data change –  if the carrier(s) reported correction information to the NCCI, then a new E-Mod may be published.  The E-Mod may be unaffected from the original Unit Stat date reporting
  • Late reporting by a carrier – the instances where you prior or current WC insurance carriers report late data does happen.  This will seldom change your E-mod.  There have been cases where this has made significant changes to the E-Mod.

    Dollar Experience Modification Factor Cash
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  • State approval or changes to NCCI recommended rates – this can cause multiple changes to an E-Mod.  We have seen instances of where there were more than 9 changes to a client’s E-Mod due to state changes reported to NCCI.
  • Premium Audit – some findings at your company’s Workers Comp premium audit may cause changes to your E-Mod such as more or less payroll, etc.

There are many other instances of what would result in an E-Mod change.  NCCI or your state’s rating bureau may email or mail you each changes to your E-Mod even when your E-mod number does not change.

If for some reason, you are not receiving your E-Mod changes by NCCI or your state’s rating bureau, a phone call is heavily recommended.  We have seen instances where the employer’s address is not a mailing address, but just the physical address.   The other possible scenario is an outdated or improper email address.

Even though I only mentioned NCCI and E-Mods, the WCIRB is the rating bureau for Calfornia.  They produce X-mods.

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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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