January 8th by Asero Insurance Staff 0 0A new method for calculating workers’ compensation experience modifications (X-Mods) took effect in California on Jan. 1. The Workers’ Compensation Insurance Rating Bureau of California has created a new simplified formula for calculating X-Mods as part of its efforts to add more transparency to the process. The new formula excludes the first $250 of every claim for the X-Mod computation, no matter how large or small the claim is. This also means that if an employer pays, say, $200 for first aid on a minor workplace injury, they are required to report it as a claim. Doing so will not affect their X-Mod in any way, no matter how many first aid claims they have. The goal is to encourage employers to report all claims, even those that may require minimal medical treatment or first aid. Examples:
- If you have a $10,000 primary threshold and you have a claim that ends up costing $6,000, the amount used to compute your X-Mod would be $5,750.
- If you have a $10,000 primary threshold and you have a claim that ends up costing $17,000, the amount used for calculating your X-Mod would be $9,750.
- If you have a claim that’s valued at $250 or less, the claim will still show on your experience rating worksheet, but it will not be used at all when calculating your X-Mod.