Large Deductible Mods
Large Deductible Mods do exist even if you have been told otherwise. Your company may have been informed that once you have a large deductible policy in place, E-Mods are a thing of the past.
Your company is still in the E-Mod system.
This is one of those misunderstandings that seem to pervade Workers Comp.
Unfortunately your company’s losses were reported to the rating bureaus (NCCI, WCIRB, etc.) and you do have a Mod in most cases.
Of course being self insured would usually preclude your company from having a Mod. However, you are not a self insured if you have a large deductible policy.
A large deductible policy is differentiated from a small deductible due to the level of the deductible. Most rating bureaus including NCCI consider any employer with a $100,000 deductible or larger as a large deductible employer.
Large deductible Mods will be calculated by using the loss data that is reported to the rating bureau on your Unit Stat Date similar to other WC policies.
Even though I have written on this subject often, this is one area where misunderstandings crop up- especially if a company decides to not insure under a large-deductible plan at renewal.
The former large deductible company is then presented with an E-Mod they never even realized was in place.
One of the better studies on Worker Comp Large deductibles is 2006 National Association of Insurance Commissioners (NAIC) report on large deductible arrangements. The definitions alone are worth a read.
I have written often on Large Deductible E-Mods in the past. Some of the articles are:
Premium Audits For Large Deductibles
WC Large Deductibles And The Rating Bureaus
Please note that I am writing on a limited point in what can be a complex issue. Many large deductible plans are custom-built for employers. However, the loss reporting requirement of the rating bureaus still applies to these policies.
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