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E-Mods X-Mods Government Cracks Down on Higher Risk Companies

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E-Mods X-Mods of 1.0 Needed To Bid On Government Contracts

E-Mods X-Mods risk concerns have caused many governmental units to now require a Mod at a certain level as a minimum requirement to do business with them.   One of the main calls and emails that we have received over the last two years is a company very worried that their Mod will increase over 1.0.  

Their concern is very legitimate as almost all government contracts now require an Emod or Xmod of 1.0 or less with no exceptions.

graphic of high risk E-Mods X-Mods Government Cracks Down
123RF

The Emod or Xmod above a 1.0 can be a heavy deterrent in bidding on and renewing governmental contracts.   A Mod above 1.0 is called a debit mod as your company is going to pay extra for Workers Comp coverage.  The opposite is true for a credit Mod that is 1.0 or below.  Your company is going to receive a credit for your safety record.

This blog and a large % of the articles are dedicated to reducing your Mod.  Self insureds are not out of the system.  We have been contacted by many different government agencies to perform a Loss Developmental Factor (LDF)  analysis on self insureds during an RFP process.

Man Analyzing E-Mods X-Mods A Chart
StockUnlimited

There are many ways to reduce or contain your Workers Comp Mod.  The easiest is to immediately initiate or increase your safety program efforts.  The Mods are your company’s safety score much like a credit score.

Mods and credit scores are very similar in that even though there may be a great explanation for why your company has a higher Mod, the cutoff is 1.0.  This is similar to applying for a home mortgage refinance and the bank saying 720 or lower will just not receive approval.

The next step in lowering your E-Mod or X-Mod is knowing where your Mod stands with your rating bureau (NCCI, WCIRB, and others).  The rating bureaus are more than happy to send you a copy or you can ask for one from your agent.

Mods are not calculated on your renewal date.  Waiting to see what your Mod is at renewal is wasting your time.

 Your Unit Stat date is the most important date for your Mod.  Monitoring your loss runs is also a great technique in lowering your Mod.

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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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