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Many Employers have a Jan 1 renewal date - so this seems like a good time to Post.


If you are an Employer with Work Comp coverage and of a certain size (in MO with a premium of $3,500 or more per year), you are subject to an Experience Modification Rating (EMR - also referred to as The Mod.).


A simple but useful explanation:

  • As an Employer you are expected to have a certain amount of paid work related injury claims during a policy year

  • If Claims are less than expected, your EMR will be a credit - when applied, it will lower your annual premium

  • If Claims are greater than expected, your EMR will be a Premium Debit (this will increase your premium)



How is it determined what an Employer would be expected to pay in claims during the policy term:

  • The type of business you operate (e.g. a Contractor is expected to have a higher volume of work related injuries than a CPA's office)

  • Your estimated annual payroll - Example: Employers with large payrolls are naturally expected to have a higher likelihood of work related injuries since the higher payroll indicates more employees and more hours worked than an Employer with significantly less payroll.  
  • A large amount of expected claims serves an Employer well because when a claim does occur, the higher expected claims will help "absorb" the actual paid losses (e.g. If you have $10,000 in claims during a policy term but your are expected to have $15,000 in claims, that year should* still result in a credit to your Mod). 


This is an simplified explanation but a good one.  If you'd like more details, including additional EMR factors, and going a bit deeper in to the math (but not too heavily - dividing by 100 and a bit of multiplication) Check this post: 

    The Experience Mod Rating in Simple Terms 

At a minimum it can serve as a sleep aid. 


If this Post may have value for one of your Employees or your Employer, the share option below includes an email option.



* I say "should" because it is contingent on whether or not the losses exceed your expected Primary Losses - this topic is a bit more involved. If you'd like more information see this Post:  The EMR Split Point


I can almost guarantee a brilliant night of sleep if you read both linked posts.



Posted by Dan Hebbeln: dan@hebbeln-ins.com












Posted 7:46 AM  View Comments

Tags: work comp
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Chesterfield, MO 63005
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