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?
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.
- 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 The other possible scenario is an outdated or improper email address.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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