What does an employer's Experience Modification Factor (X-Mod) measure for workers' compensation purposes?
a.How that employer's actual loss history compares to the expected losses for similar businesses in the same classifications
b.The total number of employees the business has on its payroll, counted on the first day of each workers' compensation policy period and reported to the carrier
c.The maximum annual payroll the employer is allowed to report in any one class code before higher workers' compensation rates apply to the excess amount
d.Whether the employer qualifies for permission to self-insure its workers' compensation obligations
Explanation
The X-Mod is calculated by the Workers' Compensation Insurance Rating Bureau (WCIRB) by comparing the employer's actual losses over a recent multi-year period to the average expected losses for businesses of the same class codes and payroll size. An X-Mod of 1.00 means average; below 1.00 lowers premium; above 1.00 raises premium.
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