Experience Modification Factor Workers’ Compensation

High Mod PEO insurance or PEO Insurance with High Ex-Mods can be expensive and hard to place.  If you’ve insured workers’ compensation clients in the past, you’re probably familiar with the elephant in the room… the experience modification factor.

At PEO Insurance Brokers Network, we specialize in insuring high ex mods, so you can say “goodbye” to the days of hunting for coverage for your insured.

High Ex-Mods

What Exactly is The Experience Modification Factor?

The experience modification factor is a ratio developed by calculating the difference between your insured’s actual past experience and the expected experience of their workers’ comp class. The result (negative or positive) will increase or decrease their standard premium.

In a situation where employers have a modifier greater than 1, the employer would pay more than their premium. Those with modifiers below 1 would pay less than their premium.

How is the Experience Modification Factor Calculated?

The experience modification factor is calculated by the state where your insured is located by comparing the insured’s actual workers’ comp claims to the expected claims cost for companies of a similar size in the same workers’ comp classification. Typically, calculations are based on the last three years of data — the lower the number, the better the premium for the insured.

How Does a Company Improve a High Experience Modification Factor?

A high ex mod doesn’t mean your insured is paying a high premium forever. Implementing safety programs and a proactive return-to-work plan can help your client lower their high ex mod over time.

How Does the Experience Modification Factor Affect Your Workers’ Compensation Premium?

The experience modification factor, at its core, is an incentivization system for employers to provide safer workplaces. The idea is that the safer the workplace, the greater the reward. Employers with a low ex mod reap the benefit of a reduced premium, while those with a high ex mod pay for it… literally.

So what can you do if you have an insured with a high ex mod today? Besides encouraging actions to lower risk, you can contact PEO Insurance Brokers Network to get the high mod workers’ comp coverage your client needs to continue operating safely.

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