Class audits & improved management cut care provider’s Mod 44%



The business is a non-profit outpatient, long-term care provider with a $20 million payroll for 512 employees spread over nine locations. The company assists elderly clients so that they are able to remain at home by either picking them up from their homes each day and bringing them to day-centers, or providing in-home nursing care when necessary. They also coordinate and transport clients to medical appointments.


The employer had a mod of 1.71. The staff was classified in eight different class codes, losses were three times higher than expected and the premium was $321,734.


Certified WorkComp Advisors (CWCAs) reviewed the client’s WorkComp program. They found the employees were incorrectly classified by the previous agent – who was not a certified Advisor – and their auditor had “found no exposure” for the office class code when in fact close to $4 million of the insured’s payroll was strictly office personnel. Internally, the company’s deductible was too low and there were no loss prevention, safety or back-to-work programs in place.


Several solutions were needed and implemented. First, the CWCAs proposed a $1,000 deductible, to which the client agreed. Then the NCCI was called in to perform a classification audit, first for the current policy year and then for the two previous years. Next, safety specialists were brought in to assess the business and “HR That Works,” was implemented. Safety programs including Shoes For Crews – a non-slip shoe program that reimburses the policyholder for the first $5,000 of a claim if the worker slips while wearing the shoes – were established for all their drivers. A dedicated WorkComp point person was identified and that person now holds quarterly claims meetings with the adjuster, the designated provider, and the CWCA.


The deductible increase immediately eliminated 75% of their losses from the mod calculation. The class audit conducted by NCCI for the current year reduced the number of classes from eight to three and reduced the mod from 1.71 to 1.24. When the previous two years were audited, that was further reduced to 1.11 and the client received back premiums. The insured renewed their policy with a 0.96 mod. Despite the fact that the payroll had increased to over $20 million from just $12 million the year before, the new premium was $337,114. Had they renewed with that large of an increase in payroll and a mod of 1.71, the premium would have been $587,846. That represents a savings of $250,732!


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