The Hidden Stabilizer Inside Your Mod Worksheet

If you’ve ever looked closely at your experience mod worksheet, you may have noticed a term that sounds out of place in insurance:

Ballast.

It’s not intuitive. It’s not commonly discussed. And most employers skip right over it.

But ballast plays a critical role in your mod calculation.

It’s the stabilizer.

What Is Ballast?

In shipping, ballast is weight placed at the bottom of a vessel to keep it from tipping too far in rough waters.

In workers’ compensation, ballast serves a similar purpose.

It prevents your experience mod from swinging too dramatically based on short-term fluctuations.

Without ballast, one claim could spike your mod to extreme levels.

With ballast, the formula remains stable and predictable.

Why Ballast Exists

The mod formula compares actual losses to expected losses.

But if the formula relied only on that ratio, small employers would see massive volatility.

A single $25,000 claim could double a small company’s mod overnight.

Ballast dampens that effect by adding a stabilizing value into the equation.

It ensures that:

• Extremely low losses don’t create unrealistically low mods.

• One bad year doesn’t permanently distort pricing.

How Ballast Protects Employers

Ballast works in two ways:

1. It limits how low your mod can go (your minimum mod).

2. It prevents extreme spikes from limited claim activity.

In effect, it smooths the curve.

This is especially important for:

• Small and mid-sized employers

• Organizations with fluctuating payroll

• Companies with occasional but not frequent claims

Why This Matters Strategically

Because ballast means:

• You cannot “game” your mod to zero.

• You cannot be destroyed by a single isolated event.

It introduces fairness and predictability into the system.

It also reinforces the long-term nature of workers’ comp performance.

Mods reflect trends — not one-time anomalies.

The Takeaway

Ballast is the quiet stabilizer inside your mod calculation.

You may never see it discussed in renewal meetings.

But it ensures:

• Stability

• Credibility

• Long-term fairness

Understanding ballast helps explain why your mod doesn’t crash after one great year — and why it doesn’t explode after one bad claim.

It keeps the ship steady.

And in workers’ compensation, stability is everything.

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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