The Workers’ Compensation Rating Bureau of California (WCIRB) created a new simplified formula calculating Experience Modifications (x-Mods) to provide more transparency to the process. Effective January 1, 2019, the new formula excludes the first $250 of every claim for the X-Mod computation, regardless of the size of the claim. This means that if an employer pays $200 for first aid for a minor injury, they are still required to report it as a claim but doing so will not affect the organization’s X-Mod, no matter how many first aid claims they have. The purpose of this change is to encourage employers to report all claims, even those that may require minimal medical treatment or first aid.
Experience Modification Effects
The change in the calculation may have an effect on your current X-Mod. Claims incurred against policies incepting during the experience period for the 2019 Experience Modification, which includes 2015, 2016, and 2017 policy years, will be used in the X-Mod computation at $250 less than its reported value. Those claims, costing $250 or less, will still appear on worksheets, but will not be included in the X-Mod calculation.
How It Works
- If you have a $10k primary threshold and you have a claim that costs $6,000, the amount used to compute your X-Mod is (6,000-250) $5,750.
- If you have a claim valued at $250 or less, the claim will still show on the experience rating worksheet, but it will not be used at all when calculating your X-mod.
Workers’ compensation regulations require that all injuries that cost some amount of money be reported to your workers’ compensation carrier. The carrier, in turn, will report those claims to the WCIRB so there will be an accurate workers’ compensation record on employers that are experience rated. The WCIRB’s goal is to encourage that employer’s report all claims and follow the rules.
The bottom line is that by providing a safe work environment with effective safety/loss control practices, your claims and your insurance premiums will decrease. Let us know if you would like information on mitigating workers’ compensation claims or if you would like us to provide you with a workers’ compensation quote. We are here to help.