Consolidation of Multi-State Payrolls Saves Company $283,000 and Lowers Experience Mod

INSURED

This 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 discovered that the mod was distorted because the only data factored in one state’s 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, one state’s mod was not benefiting from the lower experience mod from the other states. The CWCAs researched the situation and found that the company had different mods in each state. The company was having a one state one state only mod. 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 one state property was being charged an inflated modification because the payroll and favorable loss experience from the other locations were not factored in the independent state only.

SOLUTION

The CWCA was already in place as the agency for the company’s one state 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, the CWCAs 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 CWCAs, the company’s experience mod dropped a total of 113 mod points over 4 years, netting the company a savings of $283,000.