Posted by: Andy Wind | November 18, 2011

Workers Compensation Calculation Changes

Your Worker’s Compensation experience mod is about to change?

For the past 20 years NCCI has developed experience modification factors using a $5,000 cap on primary losses.  These losses go into the formula dollar for dollar and have the greatest impact on your mod.  Beginning in 2012, NCCI is expanding primary losses from $5,000 to $15,000 over a three year period.  In the first year, primary losses will be capped at $10,000, in the second they will be capped at $13,500 and in the third they will be capped at $15,000.

What does this mean to me?

If you have a number of losses that are above $15,000, your experience mod will increase under the new formula.  This could affect your ability to do work for entities that require you to have a credit mod and will most definitely increase the cost of your worker’s compensation insurance.

What’s the solution?

With these changes looming, providing a safe workplace is more important than ever.  Your insurance and risk management professional can provide ideas and solutions that will enable you to reduce the frequency and severity of WC losses and thereby reduce your costs.

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