An experience mod rate review checks whether an employer’s worksheet accurately reflects reported payroll, classifications, and losses, and whether the rating calculation was applied correctly. The result can affect workers’ compensation premiums: a 1.00 mod is unity, while a factor below or above 1.00 is a credit or debit.
The National Council on Compensation Insurance generally uses three years of data, but the period and eligibility rules vary by state and effective date. Review costs also vary: the Pennsylvania Compensation Rating Bureau lists a $15 fee per experience-rating worksheet.
Key Takeaways
- An experience mod review checks reported payroll, classifications, claim losses, and rating calculations, but a review does not guarantee an error or a lower mod; NCCI’s example shows a 0.75 mod reducing a $100,000 premium to $75,000 and a 1.25 mod increasing it to $125,000.
- NCCI generally uses the latest available three years of data, but experience periods can range from less than 12 months to 45 months, and eligibility rules and rating plans vary by state and effective date.
- Employers should request the experience-rating worksheet from their insurer or agent, then confirm its effective date, applicable period, rating bureau, and preliminary, final, or contingent status before reviewing the mod.
- Employers should compare worksheet payroll, classifications, loss data, and calculations with supporting records and check correction deadlines promptly; in California, the WCIRB can change reported payroll or loss data only after the insurer files a revised report, and an eligible lower revised modification may apply retroactively if written notice arrives within three months of the effective or publication date.
- Experience mod review costs vary: the Pennsylvania Compensation Rating Bureau lists a $15 fee per worksheet, and a request from someone other than the carrier of record requires a letter of authority on employer letterhead.
What Does an Experience Mod Review Check?
An experience mod review checks whether the rating worksheet accurately reflects the employer’s reported payroll and losses and whether the rating calculation was applied correctly. It compares the employer’s experience with expected losses for similarly grouped employers, using payroll and claim-loss information reported for rating purposes.
A review can compare worksheet entries with carrier and rating-bureau records, then assess whether a supported correction could change the mod and affect premiums. A change is not guaranteed: the records may be accurate, or a correction may not alter the result. A review also does not promise a lower mod, and it does not address the merits or handling of individual injury claims.
NCCI illustrates the premium effect with a $100,000 premium: applying a 0.75 mod produces a $75,000 modified premium, while a 1.25 mod produces $125,000. The example shows how the factor adjusts premiums; it does not predict whether an employer’s review will find an error or lead to a credit.
How Is the Mod Calculated?
The mod is calculated by comparing an employer’s reported payroll and claim losses with expected experience for employers in similar classifications under the applicable state rating plan. NCCI generally uses the latest available three years of data, but an experience period can range from less than 12 months to 45 months.
The worksheet’s payroll and claim-loss figures come from unit statistical reports filed under the Statistical Plan for Workers Compensation and Employers Liability Insurance. The rating calculation separates losses into primary and excess portions. In NCCI’s Experience Rating Adjustment example, only 30% of both portions of a medical-only claim enters the calculation.
A displayed factor does not show whether the underlying payroll, classifications, claim losses, or rating inputs match the filed records. Reviewing the worksheet can help identify discrepancies in those inputs or in how the rating plan was applied. Experience-rating eligibility thresholds differ by state, and rating plans and experience periods can vary by state and effective date. Experience rating is mandatory for employers that meet the applicable state criteria.
Where Can You Find Your Experience Mod?
Start with the workers’ compensation insurer or agent and request the experience-rating worksheet, not just the mod displayed on a quote, policy document, or online lookup. The displayed rate shows the factor; the worksheet provides the detail needed to check its supporting data. Before reviewing entries, establish which worksheet and effective period apply. The rating bureau and access process depend on the state, and NCCI is not the rating bureau for every jurisdiction.
- Ask the insurer or agent for the worksheet supporting the mod you want to review.
- Confirm the policy or modification effective date shown on that worksheet.
- Identify the state’s rating bureau and follow its process for accessing the worksheet or rate information.
- Check the period the modification applies to. A mod is usually in effect for one year, but NCCI says it can last from 3 to 15 months.
Which Worksheet Errors Can Change the Result?
Worksheet errors can change the result when payroll, classifications, loss data, the experience period, modification status, or calculation do not match the records and rules used to issue the mod. Compare each worksheet item with supporting carrier and rating-bureau records:
- Payroll: Check the reported amounts against carrier records.
- Classifications: Confirm the codes and payroll assigned to each code.
- Loss data: Compare claim figures and their treatment with carrier and bureau records.
- Calculation: Check the worksheet’s inputs and arithmetic against the applicable rating plan.
Also confirm that the worksheet uses the appropriate experience period and shows the correct modification status, such as preliminary, final, or contingent. A mismatch may originate in the worksheet, the insurer’s report, or the rating calculation, so identify which record first differs before requesting a correction. In California, the WCIRB says it must use payroll and loss data reported by the insurer and cannot amend or delete that data without a revised insurer report filed by the insurer. A discrepancy in reported data therefore needs to be traced back to the insurer, rather than treated as an entry the bureau can edit. The California Workers’ Compensation Experience Rating Plan, 1995 allows an eligible lower revised modification for errors in the current or two preceding modifications to take effect from the original effective date if the bureau receives written notice within three months of the effective or publication date. This makes it important to establish the applicable correction deadline and the source of the mismatch.
What Does a Review Cost and When Should You Act?
Review costs have no single standardized price. Options range from bureau worksheet fees to free initial reviews and contingency billing. In Pennsylvania, the PCRB lists a $15 fee per experience-rating worksheet, and a request from someone other than the carrier of record requires a letter of authority on employer letterhead, according to the PCRB experience-modification procedures.
Some private reviewers advertise contingency billing or a free initial review. Before comparing quotes, confirm whether the fee covers the worksheet review, follow-up with the insurer to seek corrected reporting, or both.
Timing depends on the state’s procedures and the mod’s status. Check the applicable correction deadline promptly, and confirm whether the mod is preliminary, final, or contingent before deciding when to request a review. Separately, NCCI says employers must notify their insurance provider in writing within 90 days of an ownership change, using an ERM-14 form or signed narrative. That ownership-notice period is distinct from a correction deadline.
How Do You Choose a Qualified Reviewer?
Choose a qualified reviewer by confirming that they can assess the worksheet and explain a documented correction path under the rules for the state governing the modification. Ask what records are required, including the worksheet, payroll support, classification details, and insurer loss or rating-bureau records. Confirm that the review covers payroll, classifications, loss data, and calculation checks, and ask whether the reviewer will explain findings in writing. Before agreeing, clarify the fee arrangement, any payment conditions, expected turnaround, and whether insurer or bureau follow-up is included. Ask who will submit correction documents and handle responses; worksheet analysis alone may not include that work. The reviewer should identify the applicable rating rules, confirm whether the modification is preliminary or final, and explain relevant state correction deadlines.
Prepare Your Mod Review Request
Prepare a packet for the worksheet’s policy or modification effective date. List each disputed item, the worksheet value, supporting record, discrepancy, and requested correction. Note whether the mod is preliminary, final, or contingent. Include the worksheet and documents supporting each mismatch, not an unsupported estimate.
Send the packet to the insurer or agent and ask in writing whether the mismatch comes from insurer-reported data or the rating calculation, and what correction submission is needed. In California, the WCIRB cannot change reported payroll or loss data without a revised insurer report. In another state, ask the applicable rating bureau which correction process and deadline apply.
If insurer records do not resolve a material discrepancy, give the packet to a qualified reviewer and request written findings and a description of any follow-up work. Keep the worksheet and correspondence together until the bureau confirms or revises the mod.
