Consolidation of multi-state
payrolls saves company $283,000 and lowers Experience Mod
Insured
The company grows and distributes plant materials and nursery stock nationwide
and employs more than 1,800 at plants located in 10 states.
Situation
The company’s Experience Modification Factor climbed steadily and
management did not understand why this was occurring.
Assessment
Certified WorkComp Advisors (CWCAs) discovered that the Mod was distorted
because the only data factored in was the New York payroll information,
which accounted for more than half of the overall payroll for the entire
company. The combined NCCI data from the other 10 states was not being recorded.
Thus, the New York Mod was not benefiting from the lower Experience Mod
from the other states. The CWCA’s researched the situation and found
that the company had different Mods in each state. The company was having
a NY only Mod issued by the NYS Rating Board. It wasn’t taking advantage
of the ability to combine many of the other states they operate in to produce
a combined NCCI modification. The NY operation was being charged an inflated
modification because the payroll and favorable loss experience from the
other locations was not factored in the NY only mod.
Solution
The CWCA’s were in place as the agency for the company’s New
York location. With the approval of the client, they began to collect all
data related to the other locations, which was a challenge due to the fact
that each location placed its own WC policy. Utilizing training they received
from the Institute of WorkComp Professionals, the CWCA’s put all the
information into a spreadsheet and then presented the data to management.
This resulted in receiving the Broker of Record Letter to begin working
on the other policies.
Result
As a result of the work by the CWCA’s, the company’s Experience
Mod dropped a total of 113 mod points over 4 years, netting the company
a savings of $283,000. |