Experience mod (EMR): how workers' comp claims raise or lower your rate
An experience modification rate (EMR, or mod) is a factor a rating bureau calculates from your own workers' compensation payroll and claims, usually three years of them, compared with what employers in the same classes are expected to lose. It multiplies your premium: 1.00 is average, 0.85 lowers the premium 15 percent, and 1.20 raises it 20 percent. Employers too small or too new to qualify carry 1.00.
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What the number does
The mod adjusts your workers’ compensation premium for your own injury record. NCCI, whose rating plan is approved in 39 jurisdictions, compares an employer’s actual losses with the losses expected for its classifications and payroll. Better than expected earns a credit mod below 1.00. Worse than expected brings a debit mod above 1.00. California’s insurance department describes the same idea: past loss experience, usually from the past three years, modifies the premium.
The effect is direct. NCCI’s own illustration applies three mods to the same $100,000 premium:
| Mod | Premium after the mod |
|---|---|
| 0.75 | $75,000 |
| 1.00 | $100,000 |
| 1.25 | $125,000 |
How the formula weighs claims, including why many small injuries hurt more than one large one, is explained in workers’ comp for NEMT. The short version: every claim is divided at a dollar figure the state approves, the part below it weighs more, and most states count medical-only claims at 30 percent.
Which years count
The mod runs on a delay. NCCI builds each mod from policies that took effect between 57 and 21 months before the rating effective date, generally three policy years. The policy in force while the mod is calculated is left out, because insurers have 18 months after a policy starts to report its data.
An example for a fleet whose policy renews every January 1:
| Mod effective | Policy years used |
|---|---|
| January 1, 2027 | 2023, 2024, 2025 |
| January 1, 2028 | 2024, 2025, 2026 |
| January 1, 2029 | 2025, 2026, 2027 |
A driver’s back injury in March 2026 falls in the 2026 policy year. It first appears in the 2028 mod and stays through the 2030 mod. Safety work pays off the same slow way, so a clean year does not lower next year’s mod.
Reading the worksheet
Ask your agent or insurer for the experience rating worksheet, not just the final number. NCCI’s worksheet shows:
- Payroll by class code, with the expected loss rate for each class. A driver payroll placed in the wrong class changes the expected losses and the result.
- Each claim over $2,000 listed by claim number. Smaller claims may be grouped by injury type.
- Open or final status for each claim, marked O or F, with its incurred amount. A claim that is finished but still shows O deserves a call to the adjuster.
- The status of the mod itself. Preliminary means the state’s final rating values were not yet in. Contingent means audited payroll or losses were still missing. Either can change.
The claims on the worksheet should match your loss runs. If they do not, raise it before renewal.
Why customers ask for it
When a facility, agency, or prime contractor asks for your mod on a vendor form, it is using the number as a quick comparison of your injury record with employers doing similar work. Send the current worksheet or your agent’s letter showing the mod and its rating effective date. If you carry 1.00 because you are new, say so, since that tells the reader nothing bad about your record.
Owners also meet the mod when they grow by purchase. An acquired company’s history generally follows it, and the guide to buying a NEMT business covers what to check before closing. For the rest of the coverage picture, see workers’ comp for transportation companies.
Catching equipment problems early
Lifts, ramps, and securement gear are part of a NEMT driver’s daily physical work. HealthRide has each driver run a van inspection in the app when the shift begins. A failed inspection reaches dispatch right away, so a sticking lift gets repaired in the lot, not halfway through a pickup.
Frequently asked questions
- My company is new. What mod do I have?
- A 1.00, called unity. NCCI assigns unity when an employer does not meet the premium eligibility threshold, lacks enough data, or is a new business with nothing to rate. It is neither a credit nor a debit. If a customer asks for your mod, send your insurer's or agent's confirmation of the 1.00 and the reason for it.
- Why did my mod go up in a year with no injuries?
- Because the mod looks back. Under NCCI's plan the policy in force when the mod is calculated is not used, so this year's clean record shows up later, while a claim from two or three years ago may still be inside the window. The worksheet's experience period shows exactly which policy years were used.
- Does buying another NEMT company change my mod?
- It can. NCCI says an ownership change must be reported to your insurer in writing within 90 days, on its ERM-14 form or a signed narrative on company letterhead. The past experience of the business generally transfers to the new owner, NCCI may revise the current mod and up to two before it, and businesses with more than 50 percent common majority ownership are combined into one mod.
- Where is the mod not calculated by NCCI?
- Six states sit outside NCCI's plan: California, Delaware, Michigan, New Jersey, New York, and Pennsylvania. It also does not apply in North Dakota, Ohio, Washington, and Wyoming, the four monopolistic states that administer their own plans and rates. Indiana, Massachusetts, and North Carolina use the plan, but their own rating organizations produce intrastate mods. Minnesota and Wisconsin join it only for employers with exposure in two or more participating states. Ask your agent which organization rates you.
