Experience modifier (Mod)

Definition

The experience modifier (typically called "the mod" or "X-mod") is a number applied to base workers comp premium that reflects how an employer's claim history compares to industry peers. A mod of 1.0 means average; below 1.0 means better than average (lower premium); above 1.0 means worse than average (higher premium). Mods typically range from 0.6 to 2.0+.

The mod calculation looks back at the past 3-5 years of claims and rolls forward annually. A single serious claim can push a mod above 1.0 for several years; clean years pull it back down.

In PEO arrangements, three mod-handling models exist: carry (your existing mod follows you into the PEO), blend (your mod is blended into the PEO's pool rates over time), and replace (you adopt the PEO's pool rate directly). High-mod businesses typically benefit from blend or replace; clean-mod businesses typically want carry to keep their advantage.

Common questions about Experience modifier (Mod)

Related terms

• Workers compensation insurance — Insurance that pays medical expenses and lost wages for employees injured on the job, in exchange for limiting the employer's tort liability.
• Workers comp class code — A four-digit code that classifies a job role for workers compensation premium calculation purposes.
• National Council on Compensation Insurance (NCCI) — The standards-setting organization for workers compensation classification codes used in most US states.

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