Many employers improve — but don’t see the results immediately. Here’s why.
The Mod Doesn’t Use the Most Recent Year
This is the first big surprise for most organizations:
Your most recent year of claims is NOT included in your mod.
The mod uses a 48-month window, but only three years count.
It skips the newest year entirely because the claims are not yet mature.
Click Link to Access Free PDF Download
“How to Calculate Your Minimum Experience Mod, Controllable Premium & the Revenue Impact”
Mod = Years 2, 3, and 4 (oldest included year)
Not counted = Year 1 (the most recent year)
That means anything happening today will not affect your mod for 12–18 months.
Why the Rating Bureaus Do This
Your experience mod functions like a credit score.
Just like a bank looks at past borrowing history to predict repayment, the rating bureaus look at past injury performance to predict future losses. The most recent year is too volatile — reserves, lost time, litigation, and treatment plans are still in motion.
So the system intentionally avoids immature data.
Why One Bad Year Sticks for So Long
If Year 3 was a disaster, it will remain in the mod for:
-
Year 4
-
Year 5
-
Year 6
It finally drops off when you reach the mod calculation for Year 7.
This is why employers feel stuck, even after improvements.
Why Improvements Take Time to Show Up
Many employers do everything right:
-
Build a return-to-work program
-
Train supervisors
-
Reduce lag time
-
Improve injury response
-
Strengthen medical management
But the mod stays the same.
That’s not failure.
That’s timing.
Today’s improvements won’t show up until the older bad years roll off.
This is where many companies lose momentum.
Don’t — you’re building the foundation for long-term cost reduction.
How to Use the Lookback to Your Advantage
1. Educate Senior Management
Show your leadership team the timeline.
Point out exactly which years are affecting today’s mod.
This resets expectations and builds support for ongoing improvements.
2. Calculate Your Minimum Mod
A powerful tool covered in the training:
Minimum Mod = Stabilizing Value ÷ Expected Losses
This shows the lowest mod your company could ever achieve.
The difference between your current mod and your minimum mod is your:
Controllable Mod
This number gets leadership attention fast.
3. Track Your Leading Indicators
Even if the mod lags, your program improvement is measurable:
-
Lag time
-
RTW ratio
-
% medical-only vs. indemnity
-
Claims frequency
-
Utilization of transitional duty
These numbers move long before the mod does.
4. Set a Mod Improvement Timeline
Tell leaders upfront:
“You’ll see real mod improvement in 12–24 months.”
This protects the program from premature abandonment.
FREE DOWNLOAD: “How to Calculate Your Minimum Experience Mod, Controllable Premium & the Revenue Impact”
Bottom Line
The mod doesn’t measure the present — it measures the last three completed years.
This delay isn’t a flaw. It’s how the system works.
If you had a bad year, it stays with you.
If you are improving today, the payoff is coming.
Stay consistent.
Stay systematic.
The results will arrive — just not overnight.
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/
©2025 Amaxx LLC. All rights reserved under International Copyright Law.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.
