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What’s an E-Mod & How Does It Affect Workers’ Comp Premiums?

Referred to as an experience modification factor, an experience modifier, or an experience modification rate, an E-Mod plays a significant role in determining your business’s workers’ compensation premium.

How Is Your E-Mod Calculated?

State or national rating bureaus like the NCCI calculate your business’s E-Mod by comparing past workers’ comp claims to similar-sized companies within your industry or related industries. E-Mod calculators typically consider the past three years, noting the frequency and severity of your workers’ comp claims. While more recent claims impact your E-Mod score more, almost every claim factors into the final calculation.

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What Types of Workers’ Comp Claims Help Determine Your E-Mod?

As mentioned above, nearly all workers’ comp claims factor into calculating E-Mod scores; however, certain types of claims play a much smaller role.

Medical-Only Claims

These are claims that either did not lead to missed work time or that the employee(s) could return to work within a short period. Only 30% of the primary and excess portions of individual medical-only claims factor into E-Mod calculation.

High-Cost and Infrequent Injuries

Severe injuries with high associated costs occur much less frequently than other workplace injuries. State rating bureaus recognize this and should typically discount their impact on E-Mod scoring.

Workers' Compensation form being filled out in pen

What Are Primary and Excess Losses?

Primary and excess loss are different components of the insurance policy used to determine the overall workers’ comp premium the business pays. Primary loss is the portion of a workers’ comp claim falling within a specific range known as the split point. State regulatory bureaus set the split point; claims below this number are considered primary losses. The amount above the split point is known as excess loss, reflecting the severity. Primary losses weigh heavier in their effect on E-Mod calculation.

What Is Considered a Good E-Mod Score?

All businesses are initially assigned a baseline E-Mod score of 1.0, considered the industry average. Therefore, businesses with a 1.10 E-Mod should have a workers’ comp claims history 10% higher than the industry average. Employers with a 1.10 E-Mod will also pay 10% more in workers’ comp insurance premiums.

While no specific number is defined as a good E-Mod score, many businesses consider any number below the 1.0 industry average satisfactory. However, CompWize can help any employer with an E-Mod higher than 0.7.

How Much Money Can CompWize Save My Business?

With the ability to analyze over six years of your workers’ comp data, CompWize can help you recover any premium overcharges that occurred within that time. E-Mod miscalculations are all too common, and our team specializes in rectifying past and present E-Mod ratings, getting back the money that should never have been taken in the first place.

Contact us today to learn more!

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