O&MM Fabricator - January/February 2018 - 43

BIZTALK

What Experience Modifiers Do,

and What You Can Do About It

E

ANDREW STERGIOU

xperience Modification Rating (EMR) has a strong impact upon
all NOMMA members' businesses. Experience modifications are
called by many different names including:
1) E-Mod
2) Ex Mod, and, most of all,
3) Experience Rating
It is a number used by insurance companies to gauge both past
cost of injuries and future chances of risk. The lower the EMR of
your business, the lower your worker compensation insurance
premiums will be.
An EMR of 1.00 is considered equivalent to the industry average
and is at "unity." If your business has an EMR greater than 1.00, it
means that there generally has been a worker compensation claim
that your insurance provider has paid. The bad news is this increased
EMR sticks with you and affects your premiums for three years.
An experience modification factor greater than 1.00 means
the employer experienced worse than expected losses during
the rating period, while a mod of less than 1.00 indicates the
employer's losses were better than expected for the rating period.
How are Experience Modification Rates Calculated?
1) The base premium is calculated by dividing a company's payroll in a given job classification by 100, and then is multiplied

by a 'class rate', which is determined by the National Council
on Compensation Insurance (NCCI) reflecting the inherent
risk in that job classification.
For example, construction workers have an inherently higher
risk of injury than receptionists, so their class rate per $100 of
payroll is significantly higher.
2) A comparison is made of past claims history to those of similar
companies in your industry. If a NOMMA member had a higherthan-normal rate of injuries in the past, it is reasonable to assume
that your rate will continue to be higher in the future. Insurers
examine your history for the three full years ending one year before
your current policy expires. For example, if a NOMMA member
receives a quote for coverage that expires in January 2017, the
experience modification will be calculated based on 2013, 2014
and 2015 workers compensation losses/claims.
3) NCCI has developed a complicated formula that considers the
ratio between expected losses in your industry and what your
company actually incurred, as well as both the frequency of
losses and the severity of those losses. And, in general, it is
better and more attractive to insurers to have one big loss and
otherwise "clean" experience, than numerous small losses.
A company with one big loss is going to be 'penalized' less
severely than a company with many smaller losses, because
January/February 2018 * O&MM Fabricator | 43



Table of Contents for the Digital Edition of O&MM Fabricator - January/February 2018

President’s Letter
Letter From the Executive Director
NOMMA Network
NOMMA Education Foundation
2018 Metalfab / Fencetech Attendee Brochure
Three Things You Need to Know* to Save Money and Time When Commissioning Custom Metal Castings
The Collective Mind Gate Series - Part Vi
Change Orders
Women in Industry
What Experience Modifiers Do, and What You Can Do About It
How to Handle Your Toughest Employee Problem
Supplier Members
New & Returning NOMMA Members & Iron Club Members
Gold Members
Take a Stroll Down Memory Lane - Nomma’s First Years
2018 Product Preview
Index of Advertisers
O&MM Fabricator - January/February 2018 - Intro
O&MM Fabricator - January/February 2018 - cover1
O&MM Fabricator - January/February 2018 - cover2
O&MM Fabricator - January/February 2018 - 3
O&MM Fabricator - January/February 2018 - 4
O&MM Fabricator - January/February 2018 - 5
O&MM Fabricator - January/February 2018 - 6
O&MM Fabricator - January/February 2018 - 7
O&MM Fabricator - January/February 2018 - 8
O&MM Fabricator - January/February 2018 - 9
O&MM Fabricator - January/February 2018 - 10
O&MM Fabricator - January/February 2018 - President’s Letter
O&MM Fabricator - January/February 2018 - 12
O&MM Fabricator - January/February 2018 - Letter From the Executive Director
O&MM Fabricator - January/February 2018 - 14
O&MM Fabricator - January/February 2018 - NOMMA Network
O&MM Fabricator - January/February 2018 - NOMMA Education Foundation
O&MM Fabricator - January/February 2018 - 17
O&MM Fabricator - January/February 2018 - 18
O&MM Fabricator - January/February 2018 - 2018 Metalfab / Fencetech Attendee Brochure
O&MM Fabricator - January/February 2018 - 20
O&MM Fabricator - January/February 2018 - 21
O&MM Fabricator - January/February 2018 - 22
O&MM Fabricator - January/February 2018 - 23
O&MM Fabricator - January/February 2018 - 24
O&MM Fabricator - January/February 2018 - 25
O&MM Fabricator - January/February 2018 - 26
O&MM Fabricator - January/February 2018 - 27
O&MM Fabricator - January/February 2018 - 28
O&MM Fabricator - January/February 2018 - 29
O&MM Fabricator - January/February 2018 - Three Things You Need to Know* to Save Money and Time When Commissioning Custom Metal Castings
O&MM Fabricator - January/February 2018 - 31
O&MM Fabricator - January/February 2018 - 32
O&MM Fabricator - January/February 2018 - 33
O&MM Fabricator - January/February 2018 - The Collective Mind Gate Series - Part Vi
O&MM Fabricator - January/February 2018 - 35
O&MM Fabricator - January/February 2018 - 36
O&MM Fabricator - January/February 2018 - 37
O&MM Fabricator - January/February 2018 - Change Orders
O&MM Fabricator - January/February 2018 - 39
O&MM Fabricator - January/February 2018 - 40
O&MM Fabricator - January/February 2018 - 41
O&MM Fabricator - January/February 2018 - 42
O&MM Fabricator - January/February 2018 - What Experience Modifiers Do, and What You Can Do About It
O&MM Fabricator - January/February 2018 - 44
O&MM Fabricator - January/February 2018 - 45
O&MM Fabricator - January/February 2018 - 46
O&MM Fabricator - January/February 2018 - How to Handle Your Toughest Employee Problem
O&MM Fabricator - January/February 2018 - 48
O&MM Fabricator - January/February 2018 - 49
O&MM Fabricator - January/February 2018 - 50
O&MM Fabricator - January/February 2018 - 51
O&MM Fabricator - January/February 2018 - 52
O&MM Fabricator - January/February 2018 - Supplier Members
O&MM Fabricator - January/February 2018 - 54
O&MM Fabricator - January/February 2018 - New & Returning NOMMA Members & Iron Club Members
O&MM Fabricator - January/February 2018 - 56
O&MM Fabricator - January/February 2018 - Gold Members
O&MM Fabricator - January/February 2018 - Take a Stroll Down Memory Lane - Nomma’s First Years
O&MM Fabricator - January/February 2018 - 59
O&MM Fabricator - January/February 2018 - 60
O&MM Fabricator - January/February 2018 - 2018 Product Preview
O&MM Fabricator - January/February 2018 - 62
O&MM Fabricator - January/February 2018 - 63
O&MM Fabricator - January/February 2018 - 64
O&MM Fabricator - January/February 2018 - Index of Advertisers
O&MM Fabricator - January/February 2018 - 66
O&MM Fabricator - January/February 2018 - cover3
O&MM Fabricator - January/February 2018 - cover4
O&MM Fabricator - January/February 2018 - outsert1
O&MM Fabricator - January/February 2018 - outsert2
O&MM Fabricator - January/February 2018 - outsert3
O&MM Fabricator - January/February 2018 - outsert4
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