With NCCI’s announcement, the split point value will change so that over a three-year period the current value for frequency claims of $5,000 will increase to $10,000 for the first year, beginning in 2013. In 2014, this will increase to $13,500, and from 2015, the split point value will be $15,000 plus inflation adjustments. This ultimately means that more claims will fall into the primary loss category. According to NCCI, these changes are being implemented as the average cost of a claim tripled since the last split point update occurred two decades ago. NCCI basically sums up this new split point value by stating that "good mods will get better and worse mods will get worse." If you want to learn more about the experience rating split point change, visit http://www.apexservices.com/
With this change, employers with poor claims experience are facing major experience mod increases. To cover higher Workers Compensation costs, the employer might need to increase its bid or pricing on certain projects, causing the business to lose those accounts altogether. Also, many large companies refrain from hiring businesses with workers compensation experience mods greater than 1.00 if they’re doing some time of bidding work. Furthermore, there is a great risk that the insurance carrier will not renew the insured’s account, resulting in higher costs by forcing the employer to move into the assigned risk plan at a higher rate with an ARAP surcharge and possible loss of scheduled credits.
Based on the current workers comp market and continued rate changes needed to offset rising costs, in addition to the upcoming NCCI mod split changes, immediate results are needed to get immediate changes. The only immediate solution to reduce experience mods effective 2013, 2014, and 2015 is to change losses that have already occurred. For example, the 2013 experience mod utilizes losses from 2011, 2010, and 2009. In order to knock down an employer’s 2013 experience mod and most of the 2014 and 2015 mods, Workers Compensation premium recovery is needed. Safety and loss control protocols only affect forward solutions, but do have an impact on previous years. Workers Compensation premium recovery offers solutions going backwards and forwards.
What always works well is when brokers and employers utilize insurance recovery services that have no out-of-pocket expenses and work on a no-recovery no-fee basis. It’s a win-win for everyone. Safety and loss control programs are great but they can be costly, and they require a lot of time and patience and someone to manage the programs daily to make sure that they’re actually effective and stay effective. With the service we provide, which is contingency-
For more information about solutions to the NCCI experience rating split point change, please visit http://www.apexservices.com/