Minimum Modifier in Workers Comp.
I’ve produced a few videos that talk about the worker’s compensation experience rating modifier. In a nutshell, it is a rating factor in your worker’s comp policy that is specific to your firm’s claim experience compared to your peer group.
Have more claims than your peer group – you’ll have a debit modifier and pay more than the average.
Perform better than your peer group and you’ll earn a credit modifier and pay less than the average.
But what is a minimum modifier?
A minimum modifier is the lowest possible mod you can have based on your industry, and your payrolls and it usually will happen when you have zero or near zero claims activity in the experience rating period over the past 4 years.
Essentially, have no claims and you’ll pay the lowest workers’ compensation premiums legally possible for your business.
Sounds pretty good, doesn’t it?
But you’re saying zero claims? That’s not possible?
Yes, it is possible but you can’t there by luck. You need a process and that’s why we designed the comp control-360 process to help mid-market business owners control risk and reduce the costs of workers comp.
There’s a lot to it that I can’t cover in this video, but it’s focused on having the right safety culture, having the right processes and procedures, and documentation in place. Having the right hiring, training, and ongoing safety training programs.
What’s the payoff?
Just for example sake, let’s say you pay around $200,000 right now for worker’s compensation and you have a 1.10 modifier – not terrible, but not great either. If your company’s minimum modifier was .77 that 33 point spread would reduce your premium by at least $60,000. And because you had an exemplary claim record you’d probably qualify for further discounts and competitive rating tiers to reduce your costs by another $20,000 or so. This is just for example’s sake, but that means achieving your minimum modifier cuts your worker’s comp premium practically in half.
How do you get to your minimum mod?
Now that is a good question.
The first thing you need to do is compute what that minimum is. If your current broker hasn’t done that, it likely means they’re not in a position to help you achieve it.
We can do that calculation with you.
Second, you need a plan, and we can help you design that too. It’s based on your loss history, your risk factors, and what you’ve already got in place.
Then you need to execute that plan. And yes, we can help you do that too. That’s what we do. Your firm probably isn’t big enough to pay for a risk manager, so you can consider us your outsourced risk manager to help you execute your plan. As your outsourced risk manager, we can help with the training, the resources, the documentation, the safety meetings, and more.
The point is that with knowing the minimum modifier you have a target to shoot for – you know the bogey, then you build the roadmap to get there.
Let us help you do that.
To get started, click the button below, and let’s schedule a time to chat!