Experience Mod Audit Lowers Mod 17 Points & Returns $33,150 to Grading Contractor

INSURED – This grading contractor employs 42 people with annual revenues of approximately $3 million.

SITUATION – The company had been with the same broker for 21 years. The broker had never audited or verified the insured’s Experience Modification Factor and routinely accepted the Mod Worksheet provided by NCCI as accurate and correct. The company’s Mod was 1.40.

ASSESSMENT – Recognizing that mistakes are common in Experience Mods, Certified WorkComp Advisors performed an audit of the current Mod and found a number of unnecessary errors that were adversely affecting the Mod. Several high-severity claims were still listed on the Experience Mod worksheet containing the full reserves even though they had been closed for two years and reserves decreased. In addition, the previous year’s policy payroll – which was significantly lower than the audited payroll – was being used to calculate the Mod, further inflating the figures.

SOLUTION – The CWCAs did a complete and thorough audit of the Experience Mod correcting all payroll and claims that were inflating the Mod. They sent all new information to NCCI and as a result, the Mod was lowered by 17 points.

RESULT – By working with the CWCAs, the company saw a drop in the Experience Mod from 1.40 to 1.23. The company also realized an annual savings of $11,050 with a three year estimated total savings of $33,150.