ABC New Hampshire & Vermont News
Workers Comp Costs to Increase for Poor Risk
The National Council on Compensation Insurance (NCCI) announced that it has changed the methodology it uses to calculate Experience Modifications. The bottom line: employers with poor loss history will pay higher premiums; those with good loss experience will pay less.
The “split point”, which draws the line between primary and excess losses in the experience rating formula, will increase from $5,000 to $10,000 in 2013, from $10,000 to $13,500 in 2014, and to $15,000 in 2015. According to the NCCI the “split point” has not been revised for two decades. Yet the average cost per claim has increased threefold since it was last revised. The affect of this change will be that employers with good experience will be rewarded with lower modifications while poor loss experience will be penalized. The impact on insurers will be revenue-neutral, with a greater share of the cost of the system shifting to those who have contributed to the higher costs.
What does this mean for contractors? Increasingly, well run companies will be more competitive and more attractive business partners than those who do not have a good track record. Some will find that they are disqualified from bidding more work. Some will simply be less competitive. What should you do? Consider joining the ABC Workers’ Compensation Self-Insurance Trust.
Trust members invest more than 6 times the resources devoted to preventing accidents than those in the “insured” world. That’s how the group has reduced the number of claims from 4 per $1 M of payroll to one claim per million during the past 8 years. During just the past 3 years Trust members have received more than $2.4 M in dividends as a direct result of their focus on safety. Please contact ABC NH/VT at 603-226-4789 to see if your company qualifies for this exclusive group.