An experience rating modification, commonly called “MOD”, is an important factor used to adjust your workers’ compensation premium. The MOD represents either a credit or debit that is applied to the premium. If your company’s claims are more frequent or costly compared to other company’s claim history in your industry, the result is a debit MOD, or surcharge on premiums. If your company’s claim history less than the industry average, you will earn a credit MOD, or discount on your premium.
Who calculates MODs?
The National Council on Compensation Insurance (NCCI) computes MODs for all businesses in 35 states. The MODs of the other 15 states are computed by state bureaus. The same factors are used to calculate each employer’s experience modification regardless of which insurance carrier provides coverage. The MOD score stays with the business even if the business is sold.