Changes to Ex-Mod Rating Eligibility for California Employers
As of January 1, 2016, the Workers’ Compensation Insurance Rating Bureau (WCIRB) is using a new formula to determine whether or not an Employer is eligible for an Experience Modification Rating.
The old eligibility criterion was based on the amount of premium the employer generated. The formula to calculate that premium is as follows Annual payroll x Workers’ Comp rate ÷100=Estimated Annual premium. In order to qualify, an Employer was required to meet the minimum premium threshold. This threshold can change from year to year, but it has been around $30,000 for the past few years.
The new eligibility criterion is based on Expected Losses. There is also a minimum threshold that must be met in order to qualify for an Experience Modification Rating. This new threshold effective January 1, 2016 is $10,300 in expected losses. Similar to the old formula, you would use payroll to calculate eligibility. Here is the formula: Annual Payroll x Expected Loss Rate÷100=Expected Losses.
The WCIRB plans to make even more changes to the Experience rating system effective January 1, 2017. We will continue to monitor those changes and keep you updated.
If there’s one thing to take away from this, it’s that there is a continued effort from the Insurance industry to hold employers responsible for safety.
If you have any questions about what your Company Ex-Mod is, contact us and we can get you that information and help review it with you!