Office Safety Training CA, Office Injury Prevention

Federal & Cal-OSHA Regulations and Policies
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2010 Workers' Comp Ex Mod Formula

training_productsMany employers have had a hard time following how their work comp ex mods have been calculated. In one step to make the process more clear, for 2010, California will use a single “split point” of $7,000 for each work comp claim into primary and excess components rather than the current formula for splitting claims.

Since primary losses effect an employer’s ex mod more than excess losses, this change makes it important for an employer to do what they can to hold down the first dollar costs of each claim. Any amount saved below $7,000 will help save on their ex mod and their premiums for 3 years to follow.

We also know from data released earlier this year by the WCIRB that if an injured worker returns to work the day after an injury, the average claims cost is $870 but if there is lost time paid for by temporary disability the average claims cost grows to $11,761. If there is even a minor permanent disability, the average claims cost grows even further to $38,390, and a major permanent disability claim costs, on average $140,680.

On November 9, 2009, the Insurance Commissioner issued a decision approving several changes to the experience rating formula including updated credibility values (“B” and “W” values) and the revised mechanism for splitting the first $7,000 of claims into their primary and excess components. These changes are intended to simplify the experience rating system and improve its predictive accuracy.

The WCIRB’s analysis of 2010 experience modifications recently issued has shown that the majority of experience rated policyholders are seeing lower experience modifications than would otherwise be the case as a result of these formula changes. Fewer than 40% are seeing an increase, however, roughly 6% of experience rated policyholders are seeing increases in their experience modifications of between 11 and 20 points, and 2% are seeing increases of more than 20 points due to these formula changes. The small number of policyholders experiencing large increases are generally employers with worse than average underlying loss experience.

Don Dressler Consulting has helped many of our clients lower experience modifications, put injured workers back to work, investigate accidents and improve safety, and save money.

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Don Dressler - Attorney/Risk Management Consultant

Architect of the Office Injury Prevention Training Kit

National leader in labor law, risk management and human resources solutions, Don Dressler, has been designing customized HR packages that significantly reduce workers compensation costs, protect employers from non-compliance, while providing effective worker training solutions to southern California companies for more than twenty years.