Myth Busting the Experience Mod:
Start using your Mod as a Grade
Your workers’ compensation premiums are determined by a number called your experience modification rate, also called EMR, experience mod, ex-mod or simply mod.
The mod is calculated using employer data such as payroll and the nature of their workforce, along with the frequency and severity of employee injuries over a period of multiple years.
The mod is expressed as a number between 0 and 2.0, with 1.0 representing the average for injuries and
claims in a particular industry. The lower the mod, the lower an employer’s work comp premiums are. The lower the mod, the better my credits are.
MYTH:
Any mod below 1.0 is considered “good” because it is better than average
FACT:
Think of 1.0 as a “C” grade in school—average but not the best possible outcome
The Experience Mod as a Grade
If you think about your experience mod as a grade in school, it is easier to understand. A mod of 1.0 is average, which would be a C grade. Though you want to strive for above average (better than a C), that’s still not the best you could do. An A grade is the best you could do.
The Minimum Mod (A Grade)
An A grade mod is different for every organization, as every company has a unique minimum mod, which represents what the experience mod would be if there were no injuries or claims during the rating period.
The example organization’s mod is .90, which seems good, is below average, and represents a savings of $10,000 in premium versus the average.
The minimum mod is .70 ($70,000 in premium). That means there is another $20,000 in potential
savings on the table.
Do you know your Minimum Ex-Mod?
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