If you don’t understand the definition of an “experience rating modification factor,” or e-mod, you are not alone. The e-mod is a critical part of many employers’ workers compensation insurance costs.
While this article attempts to explain in simple terms how e-mods are determined, it does not include all the details that could affect your company’s individual e-mod. Many insurance carriers use basic business and industry classification codes developed by the National Council on Compensation Insurance (NCCI). Under the system, each employee is assigned a class code based on job description and risk of injury. Many employers have multiple class codes on their policies because not all employees do the same job.