Premium increase not set in stone as MOD adjustment returns $150,000 to concrete manufacturer



This free-cast prestressed concrete manufacturer and contractor has annual revenues of nearly $15 million and employs 60 people.


The company, which traditionally had an Experience Modification Factor in the .89 to .90 range, saw a rise to 1.2. This resulted in the company going from a credit experience modification factor (under 1.0) to a debit or penalty experience modification rate (over 1.0). To further illustrate how the increased rate impacted standard annual premium:


$40,000 annual premium times the experience modification factor of .90 = $36,000


$40,000 annual premium times the experience modification factor of 1.2 = $48,000 or an increase of $12,000.


Using techniques taught at the Institute of WorkComp Professionals (IWCP), CWCAs conducted an audit to evaluate the situation and to isolate the cause of the increase in the Mod. They discovered that there was a claim for a severe leg injury to an employee that had remained open for two-and-a-half years. Although the general contractor had previously paid the claim, it was never taken off the books.


The CWCAs conducted a conference call with the NCCI and the employer’s insurance carrier to show evidence that the claim had been satisfied and should be closed. The NCCI and insurance carrier agreed. CWCAs also educated the employer on what to look for with future open claims, to reduce the chances of a similar situation.


As a result of the findings, the manufacturer received a retroactive refund for two-and-a-half years of $150,000. Savings will continue going forward as the Experience Modification Factor was lowered from 1.2 to 1.03.


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