Recently, I added a new page to my website called the “experience rating split point change.”  Within the past few days, I've seen a lot of articles floating around regarding the experience rating split point change. Although these articles do provide some valid and helpful information, I wanted to post a blog to give my take on some of the things I found to be questionable and to stress what's really important and who will be affected most by these changes.

"Per the June 13 meeting of the WCRIB’s classification committee, the split point in California, which is recommended by the Workers’ Compensation Insurance Rating Bureau (WCIRB) and approved by the Department of Insurance, is $7,000 and the bureau has no plans to ask for an increase next year, but did discuss recommendations about researching the possibility of establishing separate experience mod formulas for smaller and larger employers in the future."

The fact is that for the time being, California is staying with the current $7,000 split point.

"NYCIRB looks like it’s adopting NCCI’s 2013 split point of $10,000 but how further changes will unfold in the next few years are still unclear."

New York is on board with NCCI's split point change. New York employers who have debit experience modifications are likely to see big increases in their workers compensation premiums. 

"NCCI says 'bad mods will get worse and good mods will get better.'"

I can't stress enough the importance of the first part of this statement that "bad mods will get worse."  Brokers should help their clients reduce their debit mods now.

"The best thing employers can do is institute safety programs — many of which were cut during the recession — to lower the number of claims they have each year.”

We are still in the recession. The unemployment rate is still nearly double of what it was during the previous workers compensation hard market. I don’t see payrolls going up (although I do see premiums going up!) and employers are still hesitant to spend money on any project that doesn’t produce immediate savings.  The fact of the matter is that safety programs will help employers reduce premiums in the long run.  However, in many cases, results are hard to measure and more importantly, they will not help with the effects of the 2013, 2014, and 2015 split point change.  This is further explained on the experience rating split point change page on our website.  On the other hand, workers compensation premium recovery offers immediate results that will impact the 2013, 2014, and 2015 experience mods and the best part about workers compensation refunds is — there are no out of pocket expenses to your clients.  Brokers earn first year and renewal commissions.