Common questions about NCCI’s ER Mod changes
Proposed effective date is January 1, 2024.
Why is NCCI making changes?
During a periodic review, NCCI has indicated that they have found opportunities to improve plan performance that they believe will result in:
- A more accurate and predictive ER Mod
- More equitable determination of primary and excess losses across states
- More comparable plan performance in states with claim costs that vary from the nationwide average
- ER Mod being less sensitive to large outlier claims without sacrificing predictability
- More consistent calculation of each employer’s expected claim count
- Recalibrated credibility parameters underlying the weight and ballast values to increase equity across employers
- Elimination of complex calculations that don’t add value
What is NCCI’s predicted impact?
- No statewide premium impact is anticipated from the changes proposed. The overall average ER Mod in each state is not expected to be impacted by these changes.
- Impacts to ER Mods at the individual employer level will vary, and may be offset by changes in loss experience and routine updates to rating values. ER Mods are expected to change by less than +/-5% for most employers.
- Overall, the proposed changes are expected to produce Plan performance that is both improved and more comparable across states and across individual employers.