Workers' Comp Experience Mod Explained
A Plain English Explanation of Your EMOD
Your experience modifier (EMOD) is the number that has the biggest impact on your workers comp cost, yet most business owners do not understand it. This guide explains EMOD in plain English: what it is, how it is calculated, what a good number looks like, and what you can do to improve it.
Is the industry average
Means you pay less than average
Means you pay more than average
Of history that builds your EMOD
Key Workers Comp Factors
Your Claims History
Your EMOD is built from three years of your workers comp claims. More claims or more expensive claims push your number above 1.0.
Industry Comparison
Your claims are compared to the average for your industry. If you have fewer or cheaper claims than average, your EMOD goes below 1.0.
Direct Cost Impact
Your EMOD multiplies your base rate. A 1.2 EMOD means you pay 20 percent more. A 0.8 EMOD means you pay 20 percent less.
Improves Over Time
Old claims roll off after three years. If you reduce new claims, your EMOD will improve automatically as old ones age out.
Safety Reduces It
A strong safety program reduces claims, which lowers your EMOD over time. This is the most reliable way to improve it.
Return to Work
Bringing injured employees back on light duty reduces claim costs, which helps keep your EMOD low.
What Your EMOD Means in Plain English
Think of your EMOD as a report card for your safety record. A 1.0 means your claims match the average for your industry. You are an average student. Below 1.0 means you have fewer or cheaper claims than average. You are doing better than your peers. Above 1.0 means you have more or more expensive claims. You are doing worse. The underwriter takes your base rate and multiplies it by your EMOD to get your actual rate.
- EMOD is a report card for your safety record
- 1.0 means your claims match your industry average
- Below 1.0 means fewer or cheaper claims than average
- Above 1.0 means more or more expensive claims than average
- Your base rate multiplied by your EMOD equals your actual rate
- It is built from three years of claims history
What Different EMOD Numbers Mean for Your Cost
Here is how the numbers work. If your base rate is $5.00 per $100 of payroll and your EMOD is 1.0, you pay $5.00. If your EMOD is 1.2, you pay $6.00, which is 20 percent more. If your EMOD is 0.8, you pay $4.00, which is 20 percent less. The difference between a 0.8 and a 1.2 EMOD is 50 percent of your workers comp cost. That is why EMOD matters so much.
How to Get Your EMOD Below 1.0
Your EMOD is built from three years of history, so improvements take time to show. But every claim you prevent today lowers your EMOD in the future. Implement a documented safety program. Train your employees on safe practices. Report claims immediately and manage them actively. Bring injured employees back on light duty as soon as possible. Over time, fewer and smaller claims will pull your EMOD below 1.0 and save you money every year.
Experience Mod Explained FAQ
What is a good experience mod number?
How often does my EMOD change?
Can I check my own EMOD?
How long does it take to improve my EMOD?
PEO Workers Comp Guides
PEO Workers Comp Rates
How PEO workers comp rates are set and what drives them.
PEO Workers Comp Savings
Where PEO workers comp savings come from and how much you can save.
PEO Workers Comp for Construction
Workers comp through a PEO for construction companies.
PEO Workers Comp for Contractors
Workers comp through a PEO for general contractors and trades.
PEO Workers Comp for Roofing
Workers comp through a PEO for roofing contractors.
PEO Workers Comp for Restaurants
Workers comp through a PEO for restaurants and food service.
PEO Workers Comp for Staffing Companies
Workers comp through a PEO for staffing and temp agencies.
PEO Workers Comp for Healthcare
Workers comp through a PEO for healthcare practices.
Workers Comp Experience Modification
How your experience modifier affects your workers comp cost.
How PEOs Calculate Workers Comp
The formula PEOs use to calculate your workers comp cost.
How PEO Workers Comp Rates Work
How PEO workers comp rate structures actually work.
Workers Comp Payroll Audit
How workers comp payroll audits work with a PEO.
Workers Comp Premium Reduction
Strategies to reduce your workers comp premium through a PEO.
Pay-As-You-Go Workers Comp
How pay-as-you-go workers comp works through a PEO.
Workers Comp Alternatives for High-Risk Businesses
Workers comp alternatives when traditional coverage is too expensive.