Workers compensation modifications in Pennsylvania are calculated based on the experience of an employer. This experience is evaluated by looking at the amount of claims, their severity, and the duration of time that have been reported to the state within a certain period. The modification factor (MOD) is then determined according to these facts and applied as an adjustment to the premium rates for an employer’s workers compensation insurance policy.
The MOD calculation is based on a system of points with each claim having its own values depending on its type, severity, and length of time since it was reported. The points are broken into two categories: Primary and Excess. Primary points are assigned when a claim is reported and Excess points are assigned over time depending on how long a claim remains open or unsettled. These two factors combine to form the overall MOD value which is used to determine what adjustment should be made to the insurance premium rates for an employer’s policy.
To calculate an employer’s MOD value in Pennsylvania, all claims (both open and closed) from the prior three years must first be taken into account. All primary points associated with those claims are totaled up along with any excess points for open cases that remain unresolved for longer than one year or more. This total will then be divided by three (for each year) to create an average MOD score. This score is then multiplied by one hundred which gives us the actual numeric value of the employer’s MOD factor which can range anywhere from zero to one hundred or higher in some cases.
Once this number has been calculated, it can be applied to adjust premiums for workers’ compensation policies in Pennsylvania according to how risky an employer’s operations may be deemed by insurers. For example, companies with high MOD scores may see their premiums increase while those with lower scores may get a break on their rates due to less risk associated with their operations. It is important for employers to understand their MOD scores so they can make sure their insurance policies offer them adequate protection against workplace risks while also remaining affordable over time.
