EAS Claims Cost Control

Experience Modification Factor
Every company with a premium qualifying threshold of $10,300 or more is subject to an Experience Modification Factor on their workers’ compensation policy which can substantially increase the amount of the premium you pay. Frequency, duration & severity of any and all claims and their associated expenses will have an impact on this factor. Every dollar spent on the claims costs listed below will cause your modification factor to increase; as a result so will the renewal premium you pay every year. Aggressive and effective case management of your claims by EAS will reduce these costs resulting in a lower modification rate factor and a lower adjusted annual premium for your company.Click HERE to view an example of the Modification Factor Formula.

Claims Costs:

 Temporary Disability Payments (up to $ 1539.71 “per week” or $80,000 “per year” for up to 2 years).

Permanent Disability Payments/Settlements

Job Displacement Voucher Benefits

Medical Payments

Claim being reserved too high by your Insurance Carrier

Smaller companies that are not subject to an experience factor need to still control their claims.  Your annual premium may still be adjusted up during the underwriting process based on “characteristics of risk” of your company and loss history, no matter how small you are. The underwriter will start with the base rate and “build up” from there. If your company is determined to be in a higher-risk category due to claims costs not being controlled then carriers that may have offered you more competitive rates may turn you down. 

Deductible Plan
If your company is on a workers compensation policy plan with a deductible, then you are still subject to an Experience Modification Factor. Moreover, your company will be personally responsible for “every dollar” spent on the claims expenses up to the full deductible on your policy and be required to fund those expenses “out-of-pocket”.