March 12, 2024
In June 2023, we notified our clients about upcoming changes to the Pennsylvania experience modification rating (EMR) plan. The Pennsylvania Compensation Rating Bureau has approved the new rating plan and published the updated Experience Rating Worksheet. It went live on January 25, 2024, and is available for all new ratings effective April 1, 2024, or after.
What Is Changing?
- Split Point (cap on large losses) is moving from a single value of $42,500 for all Expected Loss amounts to a variable value ranging from $10,000 – $300,000
- The swing limit (amount the mod can change in a given year) is increasing from +/-25% with secondary capping to +/-40% with no secondary capping (there is a 2-year transition period to help ensure EMR stability)
- Eligibility for EMR is decreasing from $10,000 to $5,000
- The Expected Loss Range is decreasing from $10,706 – $5,806,852 to $5,000 – $4,338,871
- The Credibility values are increasing from 0.283 – 0.938 to 0.690 – 0.974
When Will It Occur?
The new rating plan will be applied to all Pennsylvania experience modifications that have an effective date of April 1, 2024 or after.
Who Will It Effect?
Potentially any employer with Pennsylvania workers’ compensation exposure.
How Will It Impact Employers?
The impact of the new rating plan will vary for each employer. Generally, Conner Strong & Buckelew anticipates potentially critical impact to the following employers/insurance programs:
- Contractors
- Guaranteed Cost Programs
- EMR-Sensitive Programs
- Any employer that utilizes the PA EMR for other business purposes (bidding, loan financing, etc.)
What To Do Now?
- Understand that the new plan may impact a PA EMR despite no change in the frequency/severity of losses.
- Contact your Conner Strong & Buckelew Account Executive for a customized impact analysis and recommendations.
- Contact your Conner Strong & Buckelew Claims Consultant for innovative strategies to minimize the most significant losses under the new rating plan.
