Answers to Common Insurance Questions: Mod Formula Changes, Wrap Policies

Answers to insurance questions about mod formula changes and wrap policiesEach month AssuredPartners NL will answer common insurance questions faced by our clients. To submit questions for consideration, contact us.   

If you’re involved in construction or handle workers’ compensation for your organization, chances are you’ve had your fair share of experience with mod worksheets and wrap policies. Read on for answers to two workers’ compensation questions:

How does the new workers compensation mod formula affect me?

The National Council on Compensation Insurance (NCCI) has announced plans to make a change in the experience rating formula, with changes transitioning throughout a three-year period. The first stage of the transition takes effect with each state’s approved rate and loss cost filing on or after Jan. 1, 2013.* When you’re impacted by this change depends on what state(s) you’re operating in, since the effective date is different by each state. The new plan really credits return to work and claims avoidance (otherwise known as safety plans).

In most cases, mods will stay flat or increase slightly (which will increase your premium). Reconciling your mod sheet will become even more important. There are things you can still do to minimize the impact, including reviewing any open claims, verifying payroll amounts and setting up a mod management plan. 

I’ll work on a wrap plan for a larger contractor starting next month. What does this mean for my workers’ compensation?

Owner Controlled Insurance Programs (OCIP) are known as “wraps” and are frequently used for large commercial projects and residential construction projects.** If any worker is injured on the job, the wrap insurance company will handle the claim. You need to be sure you know who that company is and how to contact their claims department in the event of an injury. Even though the claim is handled by the wrap insurance company, the loss will still count against your experience mod. 

When the project is complete, make sure you have contact information for the company handling the OCIP workers’ compensation on hand. Any questions on claims payments will need to go to them. Keep up with your workers’ compensation claims until they are closed and keep records of final payment to match to your experience mod worksheet. Also, keeping good payroll records is essential, since payroll is a big part of your experience mod—and inaccurate payroll records can cause your mod to go up. 

If you have questions about your workers’ compensation insurance policies or programs, our team of dedicated specialists can help. To learn more or to contact us, visit: AssuredPartners NL Property & Casualty.

*Info from Zywave
** Info from
Insurance Journal

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