I’ve noticed that experience mods in Missouri have been swinging more wildly than expected recently.
Much of this is due to the July 1, 2011 change by the NCCI where a 70% discount now applies to med-only claims, regardless of size.
Prior to July 1, med-only claims went into the mod formula at 100% in Missouri. However, by law, Missouri employers were permitted to pay med-only claims under $1,000 out of their own pocket in order to keep them out of their mod.
This change has pretty much defeated any advantage an employer gains from this (and it applies retroactively to all claims for mods effective after the July 1, 2011 date) so a lot of employers lost any benefit from their efforts in prior years.
Meanwhile, some employers got a windfall. Med-only claims excess of $1,000 now enter the formula at on 30 cents on the dollar. I know one client that had several med-only claims in the $3,000 to $5,000 range. Their 2011 mod came in a full 8 points under the projection just due to this change.
So, some insureds are being punished for following the intent of state law (RSMO 287.957 was written expressly to benefit those employers who paid claims under $1,000 out of their own pocket). Meanwhile, other employers are reaping unexpected benefits that are saving them thousands in premium dollars.