Workers Comp Experience Mods Becoming Decentralized – Bad Move?
Combining many states into a single number is one of the great time-saving aspects of interstate workers comp experience mods.
Correction – North Carolina is still in the NCCI Interstate Mod System.
NCCI published a newsletter this morning. One of the items that jumped off the page was that New York will no longer share their data with NCCI to have interstate workers comp experience Mods.
NCCI Press Release on NY Workers Comp Experience Mods
(c) NCCI – New York's Departure From Interstate Experience Rating. The New York Compensation Insurance Rating Board (NYCIRB) announced that the New York State Department of Financial Services approved a new edition to the New York Experience Rating Plan Manual (Plan) effective for experience rating modifications (Mods) with a rating effective date on or after October 1, 2022. Upon implementation of their new Plan, New York will withdraw from the NCCI interstate rating plan.
Beginning with experience rating worksheets with an effective date of October 1, 2022, and after, interstate experience rating will not use New York experience in the calculation of interstate experience rating mods. New York experience can be used for experience rating purposes on mods prior to rating effective dates of October 1, 2022.
Mod worksheets containing New York experience that have a rating effective date of October 1, 2021, and after will display a comment advising customers that New York experience will no longer be used in mods on and after October 1, 2022. NCCI may issue additional communications as New York transitions away from the interstate experience rating plan.
What That Means For Employers
If your company has workers comp policies that cover multiple states including New York, your Workers Comp Experience Mod for New York will not be combined into NCCI's E-Mod algorithm.
Your company's New York payrolls will be matched with claim values only in New York.
Will New York Workers Comp Experience Mods Cost Us More Premium?
I hate to answer that good question with – it depends. Let us look at how it could affect your company's workers comp budget.
A high amount of NY Claims with lower NY Payroll – New York Mod will be higher likely causing an increase in premiums. Any other situations will be – it depends.
For instance, If your company has a low amount of claims and higher NY payroll, then one could say that the NY Mod will be lower. Hold on, though, as the NY payroll will not count in as a buffer for higher claims in your company's other states of operation.
I recalculated one of our clients' Mods taking out the NY payroll and claims. The NCCI Mod dropped. The NY Workers Comp Experience Mod increased the premium slightly. I think we will need to leave it at – it depends.
This blog post is provided by James Moore, AIC, MBA, ChFC, ARM, and is republished with permission from J&L Risk Management Consultants. Visit the full website at www.cutcompcosts.com.
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