Workers’ Comp – New Experience Rating, Physical Audit Levels Set


Starting in 2020,  the threshold for California employers to be  eligible for experience rating (X-Mod) has been reduced by order of the state insurance commissioner. 

Commissioner Ricardo Lara in September approved the recommendations by the Workers’ Compensation Insurance Rating Bureau to lower thresholds for determining eligibility for experience rating and when a carrier needs to perform a physical audit of an employer’s payroll records.

NEW THRESHOLDS

Annual physical audit
As of Jan. 1, 2020: Any employer with $10,500 or more in annual premium.
Current threshold: $13,000 or more in annual premium.
Threshold for experience rating (to have an X-Mod)
As of Jan. 1, 2020: $9,700 in annual premium.
Current threshold: $10,000 or more in annual premium.

 

“Physical audit” is defined as an “audit of payroll, whether conducted at the policyholder’s location or at a  Remote site, that is based upon an auditor’s examination of the policyholder’s books of accounts and original payroll records (in either electronic or hard copy form), as necessary to determine and verify the exposure amounts by classification.”

The eligibility rating threshold is the amount of payroll developed during the experience period in each classification, multiplied by the expected loss rates for each class. If the total for all assigned classes is at or above the threshold, then the employer is eligible for an X-Mod.

Changes to dual-wage class codes

Lara also approved the Rating Bureau’s recommendations for changes to a number of construction dual-wage class codes. While most workers’ comp classes have one rate, in some classes the difference in claims costs between high- and  lowerwage workers is so great that a dual-wage  classification is needed.  In those cases, the workers above the threshold rate are assigned one rate, while those below that threshold are assigned a higher rate. The new thresholds are for 14 construction classifications, and any workers above the threshold will have a lower rate applied.

Attention !

Coronavirus – Mindful Insurance Remote Work Arrangements

At Mindful Insurance Solutions, our top priority has always been to deliver best-in-class service to our clients.  We chose the name “Mindful” precisely to be “present and willing to do something” with our clients, and that’s what we always strive to be—present with you in your business.

To ensure that we remain true to our name during the current coronavirus pandemic, we are taking every precaution possible to protect the health and safety of our team and their families.

Therefore, in line with much of the rest of the country, as of today, our team will work remotely, and our physical office locations will be closed.

For now, our plan is to maintain remote work arrangements for as long as local authorities require or medical experts advise.  We will closely monitor the situation to determine when we can return to our normal office procedures. The good news is that our technological capability enables everyone on our team to work seamlessly from remote locations. During this period, we will continue to be readily accessible to you. Your emails and phone calls/voicemails will be answered as per usual, and our Mindful Insurance professionals will work to meet your needs in all the ways you have come to expect from us.

We understand that insurance is a people-oriented industry, and Mindful prides itself on being a people-oriented company.  But while there is no substitute for face-to-face interaction, it is prudent to curtail such interaction as much as possible until things return to normal.  Therefore, Mindful also stands ready to interact with you via remote video/teleconferencing as desired.

These extraordinary steps are necessary to preserve the health of our team and to help curtail the spread of the virus, while upholding our commitment to you, our clients.  On behalf of the entire Mindful team, I want to thank you for your understanding and support during these challenging times.  We wish you, your families and your teams much good health.

In your service, stay healthy and safe,

William Donaldson President / CEO


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