Myth-Busting the Workers’ Comp Experience Mod: Interpreting Your Mod

Workers’ compensation premiums are a significant expense for most businesses, but few truly understand the impact their Experience Modification Rate (EMR or “mod”) has on their costs. It is more than just a number—it’s a reflection of your performance and directly affects your bottom line. Think of the mod like a grade for your company, determining whether you’re paying too much or too little for workers’ comp insurance.

This blog will debunk the most common myths surrounding the mod, explain how it works, and show you how setting the bar higher could save your business thousands of dollars. By the end, you’ll have actionable insights to improve your mod and start working toward an "A" grade for your business. 

Understanding Your Experience Mod: It’s Not Just a Number

Your experience mod is calculated based on your business’s workers’ compensation claims history, spanning the last three years. The formula takes into account:

• Payroll size
• The type of work employees perform
• The frequency and severity of on-the-job injuries
• Your claims history compared to others in your industry

The mod is expressed as a number, typically ranging between 0 and 2.0, where 1.0 represents the industry average. A mod of less than 1.0 indicates better-than-average performance, while a mod higher than 1.0 denotes more frequent or severe losses than the industry average. 

This seemingly simple number significantly influences your workers’ compensation premiums. But there’s more to the story than just staying under 1.0.

Busting the Biggest Mod Myth

The Myth:

A mod below 1.0 is “good enough” because it’s better than the industry average. 

The Reality:

While a mod below 1.0 means fewer claims than average, this is the equivalent of a “C” grade in school. Sure, it’s better than a failing grade, but would you celebrate if your child came home from school with straight C’s? Probably not. 

You wouldn’t accept mediocrity in your child’s grades, so why accept it for your business? With a proper understanding of your mod, you’ll see it’s possible to achieve an "A," unlocking further savings and operational improvements. 

The Cost of “Average”

Here’s how the numbers break down for a sample business with a $100,000 industry-average premium:

• Industry Average Mod (1.0): $100,000 premium 
• Current Mod (0.90): $90,000 premium (10% savings) 
• Minimum Possible Mod (0.70): $70,000 premium (30% savings) 

While saving $10,000 compared to the industry average feels significant, you’re still leaving $20,000 in potential savings on the table. Your minimum possible mod represents your business’s “A” grade—the lowest rate you could pay with zero claims during the rating period.

Understanding Your Mod as a Grade

Think of your mod like a report card for your workers’ comp performance:

• A Grade (Minimum Mod): Maximum savings achievable, often between 0.50 and 0.70 
• B Grade (Below 1.0): Better-than-average, but with room for improvement 
• C Grade (1.0): Average performance and costs—settling for mediocrity 
• D/F Grade (Above 1.0): Poor performance, resulting in surcharges 

The closer your mod is to your minimum possible mod, the higher your “grade”—and the lower your costs.

Why Your Minimum Mod Matters

Your minimum mod serves as your "perfect score." While you might not achieve it, understanding your minimum mod can guide your performance goals. Aiming for this lower number begins with addressing the root causes of your claims. Whether it's better safety training or earlier return-to-work initiatives, making small, measurable changes can bring your mod closer to its ideal range and maximize savings.

Taking Action to Improve Your Grade

Improving your mod isn’t a guessing game—it’s a data-driven process. Here are two critical actions you can take to start:

1. Request a Complimentary MOD Analysis

Not knowing your minimum mod is like flying blind. With a MOD analysis, you’ll:

• Discover your business’s minimum possible mod 
• Understand what’s driving your current mod 
• Receive tailored recommendations to close the gap 

2. Schedule a 4sight™ Experience Modification Check-Up

To improve your workers’ compensation premiums in the long term, you need to understand the factors affecting your experience mod and implement best practices to mitigate risks. 

Our 4sight™ Experience Modification Check-Up includes:

• A step-by-step review of your mod calculation 
• Patterns and trends analysis of past claims 
• Identification of cost drivers 
• Actionable strategies to improve your mod and reduce costs 

We’ll even guide you through an Experience Modification Best Practices Checklist, making it easy for you to take control of your mod—and your costs. 

Shared Responsibility, Shared Success

At Winter-Dent, we believe in “Humans Helping Humans.” Your workers’ compensation story isn’t just about numbers—it’s about people. Improving your mod reflects a commitment to keeping your employees safe and your business competitive.

Remember, lowering your mod benefits more than your budget. It strengthens your company culture, reduces employee downtime, and builds trust across your workforce. Everyone wins when safety becomes the priority.

Take ownership of your experience mod today. With Winter-Dent’s unique support and expertise, we’ll help you move closer to the “A” grade your business deserves.

Take the First Step Toward Maximum Savings

Settling for average isn’t just mediocre—it’s expensive. Don’t leave thousands of dollars in potential savings on the table. Act now to lower your workers’ compensation premiums and achieve optimal results for your business. 

Email Mark.Gilliland@Winter-Dent.Com today to schedule your MOD Analysis or 4sight™ Experience Modification Check-Up

We’re here to help, every step of the way.