Return to Work Program/Modification Factor Formula

Every dollar incurred on a claim will come back to haunt the employer in the form of a higher modification factor*. The modification factor penalty for a claim stays with your company for several policy years and can continue to go up year after year driving your policy premium higher and higher. Companies with a good claims cost control history may also be rewarded with a modification factor discount. It is more important than ever to implement an aggressive Return to Work Program, getting someone back to work as soon as possible or at the very least making a legally enforceable job offer to an employee that has filed a Workers Comp Claim “obligating them” to either accept the offer or lose their benefits. At EAS we pride ourselves in developing and implementing the most effective Return to Work Programs in the industry.

*The modification factor is established for all employers by the Workers Compensation Insurance Rating Bureau (WCIRB), an Agency of the State of California.

Examples of how your modification factor affects your insurance premium:

$50,000 Annual Premium x .75 (modification factor) = $37,500 in Adjusted Annual Premium that you pay. Discount:  - $12,500

$50,000 Annual Premium x 1.0 (modification factor) = $50,000 in Adjusted Annual Premium that you pay. No Penalty or Discount

$50,000 Annual Premium x 1.50 (modification factor) = $75,000 in Adjusted Annual Premium that you pay. Penalty: + $25,000

$50,000 Annual Premium x 2.0 (modification factor) = $100,000 in Adjusted Annual Premium that you pay. Penalty: + $50,000