New Rule Simplifies X-Mod Calculation, Encourages Reporting First Aid Claims

| posted in Blog, Newsletter

A new method for calculating workers’ compensation experience modifications (X-Mods) took effect in California on Jan. 1, 2019. The Workers’ Compensation Insurance Rating Bureau of California has created a new simplified formula for calculating X-Mods as part of its efforts to add more transparency to the process. The new formula excludes the first $250 of every claim for the X-Mod computation, no matter how large or small the claim is. This also means that if an employer pays, say, $200 for first aid on a minor workplace injury, they are required to report it as a claim. Doing so will…
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Pay Attention to Policy Milestones to Reduce Workers’ Comp Costs

| posted in Blog

Once they’ve paid their annual premium, many employers pay scant attention to their workers’ comp policy until the renewal date starts closing in. Unfortunately, that’s not the best time to attempt to control costs. Because workers’ comp is one of the most loss-sensitive insurance policies, and as claims can sometimes be paid out for decades, it’s incumbent on you to proactively manage claims. One way to do that is through a quarterly claims review process, the timing of which is in line with the calculation of your company’s Experience Modification Factor (X-Mod), which is the one factor you can control…
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Getting Buy-in from Managers on Workplace Safety Programs

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One of the keys to instituting a good safety program is to get management and supervisor buy-in. You need their support and belief in the system if you are to convince your employees to embrace your safety regimen. If your managers don’t believe in the safety plans you have put together, it will show through when they try to sell them to your staff. If you don’t have buy-in from your managers, the chances are slim to none that your employees will embrace the changes you are proposing. Managers play a crucial role in getting employees on board with safety….
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The Effects on Your X-Mod When Purchasing Another Company

| posted in Blog

Many companies are often taken off guard when their workers’ comp X-Mod shoots up after a merger or acquisition. The experience modifier spike is usually the result of the other employer having a less than stellar workplace safety record and high workers’ comp claims costs. But there are pre-emptive steps you can take to understand the impact of the merger on your X-Mod and the more you know, the better chance you’ll have at coping with the changed circumstances. The reason is that workers’ compensation rating bureaus have strict rules regarding mergers and acquisitions to ensure that companies don’t engage…
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New X-Mod System Reduces Effect of One Large Claim

| posted in Blog

One of the biggest complaints in workers’ comp – that one large claim can skew an employer’s X-Mod – is about to finally be addressed in California. The Workers’ Compensation Insurance Rating Bureau’s “split-point” experience rating system, in which an employer’s actual workers’ comp losses are divided into actual primary losses and actual excess losses, will be overhauled for 2017. The Bureau will do so by replacing the current static $7,000 split point for all industries and employer sizes with a variable split-point system. This change is expected to limit the impact of one large claim on an employer’s (particularly…
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Agency Mulls Not Counting Portion of First Aid Claims in X-Mods

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California’s workers’ compensation rating agency is developing new guidelines that would exempt a portion of first aid claims from being included in the calculation of employers’ X-Mods. Under state regulations, employers are required to report injuries that require first aid and are not severe enough for the employee to seek medical treatment or miss work. But despite the rules, few employers report the claims to their insurance companies. The Workers’ Compensation Insurance Rating Bureau hopes that creating an exemption in the experience rating plan for first aid claims and injuries would increase reporting. According to the trade press, the Rating…
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New System to Reduce Effects of a Single Claim on Small Employers’ Premium

| posted in Blog

New rules approved by the state insurance commissioner, Dave Jones, will reduce the effects of a single claim on small and mid-sized employers’ workers’ comp premiums, addressing an issue that has long haunted many California companies. The changes approved for the Experience Rating Plan will introduce a new formula for gauging an employer’s expected and excess losses for claims. It will replace the current “split-point” system that has been blamed for being too volatile and punishing small employers for incurring a single workers’ comp claim. The current split The current system calculates all losses up to a $7,000 split point…
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