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Workers Comp Experience Mods Becoming Decentralized – Bad Move?

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New York Workers Comp Experience Mods Now Independent – What That Means

Combining many states into a single number is one of the great time-saving aspects of interstate workers comp experience mods.

Correction – North Carolina is still in the NCCI Interstate Mod System.

Pic New York Workers Comp Experience Mods Map
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NCCI published a newsletter this morning.  One of the items that jumped off the page was that New York will no longer share their data with NCCI to have interstate workers comp experience Mods.

NCCI Press Release on NY Workers Comp Experience Mods

(c) NCCI – New York’s Departure From Interstate Experience Rating.  The New York Compensation Insurance Rating Board (NYCIRB) announced that the New York State Department of Financial Services approved a new edition to the New York Experience Rating Plan Manual (Plan) effective for experience rating modifications (Mods) with a rating effective date on or after October 1, 2022. Upon implementation of their new Plan, New York will withdraw from the NCCI interstate
rating plan.

Beginning with experience rating worksheets with an effective date of October 1, 2022, and after, interstate experience rating will not use New York experience in the calculation of interstate experience rating mods. New York experience can be used for experience rating purposes on mods prior to rating effective dates of October 1, 2022.

Mod worksheets containing New York experience that have a rating effective date of October 1, 2021, and after will display a comment advising customers that New York experience will no longer be used in mods on and after October 1, 2022. NCCI may issue additional communications as New York transitions away from the interstate experience rating plan.

What That Means For Employers

If your company has workers comp policies that cover multiple states including New York, your Workers Comp Experience Mod for New York will not be combined into NCCI’s E-Mod algorithm.

Your company’s New York payrolls will be matched with claim values only in New York.

Will New York Workers Comp Experience Mods Cost Us More Premium?

Statue of Liberty workers comp experience mods New York City
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I hate to answer that good question with – it depends.  Let us look at how it could affect your company’s workers comp budget.

A high amount of NY Claims with lower NY Payroll – New York Mod will be higher likely causing an increase in premiums.  Any other situations will be – it depends.

For instance, If your company has a low amount of claims and higher NY payroll, then one could say that the NY Mod will be lower.  Hold on, though, as the NY payroll will not count in as a buffer for higher claims in your company’s other states of operation.

I recalculated one of our clients’ Mods taking out the NY payroll and claims.  The NCCI Mod dropped.  The NY Workers Comp Experience Mod increased the premium slightly.   I think we will need to leave it at – it depends.

 

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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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