The good news? Unlike payroll or class code rates, the mod is a lever you can influence. Here are 10 practical, proven strategies to reduce your mod—without cutting staff or compromising operations.
1. Know Your Minimum Mod
Every company has a minimum (loss-free) mod—the lowest possible rating if you had no claims during the three-year experience period. Calculate it (your broker can provide this) and compare it to your current mod. The gap between them is your controllable premium. This tells you exactly how much you could save with better claim management and safety efforts.
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“How to Calculate Your Minimum Experience Mod, Controllable Premium & the Revenue Impact”
2. Focus on Frequency First
While a single catastrophic loss is painful, the mod formula weights claim frequency more heavily than severity. Ten $10,000 claims will raise your mod more than one $100,000 loss. Target your “repeatable” injuries—sprains, strains, slips, and cuts. Eliminating frequent small claims delivers faster premium relief than chasing rare large ones.
3. Implement a Real Safety Program
A binder on a shelf doesn’t lower your mod. A living safety program does. That means:
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Regular hazard assessments
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Documented employee training
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A functioning safety committee
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Near-miss reporting and follow-up
Insurers reward employers who demonstrate a culture of safety with fewer claims—and a lower mod reflects that success.
4. Use Nurse Triage at the First Report of Injury
A nurse triage hotline available 24/7 can make a huge difference. Studies show that 40% of calls end in self-care advice, avoiding unnecessary claims altogether. Even when treatment is needed, early nurse involvement improves direction of care, speeds recovery, and reduces costly ER visits—all of which minimize claim frequency and severity.
5. Build a 95% Return-to-Work Program
Every day an injured employee sits at home adds cost to the claim. A strong return-to-work (RTW) program—with light-duty or transitional jobs ready—shortens disability durations and keeps claims from ballooning. Aim for a 95% RTW ratio, meaning nearly every injured worker is back in some capacity within days. This keeps indemnity payments down and lowers your mod.
6. Review Claim Reserves Before the Unistat Date
The Unit Statistical Date (Unistat)—six months before your policy renewal—is when insurers lock in incurred losses (paid + reserves) for your mod calculation. Start reserve reviews 90 days prior. Work with adjusters to ensure reserves reflect probable outcomes, not inflated estimates. Correcting just one overstated claim can lower your mod for three years running.
7. Audit Your Payroll Classifications
Errors in payroll classification are a hidden cost. A janitorial firm wrongly classified as a contractor will overpay. So will a manufacturer that lumps clerical staff under production codes. Verify that every employee is properly classified, and apply allowed payroll exclusions (like severance pay or the premium portion of overtime). These corrections can reduce your premium immediately.
8. Avoid “Ghost” Claims by Reporting Accurately
Some employers are tempted to pay small injuries out of pocket to keep them off the books. This is usually illegal and can backfire. Instead, manage small claims through nurse triage and modified duty so they resolve quickly and cheaply. Accurate reporting builds credibility and prevents insurers from flagging you for audits.
9. Invest in Better Claim Management Practices
Poorly handled claims—delayed investigations, vague medical direction, lack of communication—cost more. Establish best practices with your insurer or TPA:
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Report all claims within 24 hours
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Stay in regular contact with the injured worker
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Ensure providers understand your RTW program
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Push for timely claim closure
Every dollar wasted in mismanaged claims feeds directly into your mod.
10. Leverage Group Programs and Discounts
Depending on your state, you may qualify for group-rating programs, retrospective rating, or premium credits for initiatives like drug-free workplace policies or certified safety programs. These don’t just reduce your upfront bill—they also align with practices that reduce claim frequency and improve your mod long term.
FREE DOWNLOAD: “How to Calculate Your Minimum Experience Mod, Controllable Premium & the Revenue Impact”
Turning Knowledge Into Savings
Your mod isn’t just a number—it’s feedback. It tells you how well your company prevents, manages, and resolves injuries compared to your peers. By acting on these 10 strategies, you can steadily move your mod toward your minimum, shrink your premiums, and improve your safety culture at the same time.
Michael Stack, CEO of Amaxx LLC, is an expert in workers’ compensation cost containment systems and provides education, training, and consulting to help employers reduce their workers’ compensation costs by 20% to 50%. He is co-author of the #1 selling comprehensive training guide “Your Ultimate Guide to Mastering Workers’ Comp Costs: Reduce Costs 20% to 50%.” Stack is the creator of Injury Management Results (IMR) software and founder of Amaxx Workers’ Comp Training Center. WC Mastery Training teaching injury management best practices such as return to work, communication, claims best practices, medical management, and working with vendors. IMR software simplifies the implementation of these best practices for employers and ties results to a Critical Metrics Dashboard.
Contact: mstack@reduceyourworkerscomp.com.
Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/
Injury Management Results (IMR) Software: https://imrsoftware.com/
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.
