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06/13/2024 10:13 PM
Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20130&cosponId=13257
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House of Representatives
Session of 2013 - 2014 Regular Session

MEMORANDUM

Posted: September 5, 2013 04:00 PM
From: Representative Mark Mustio
To: All House members
Subject: Workers' Compensation Act
 
Please find attached a copy of legislation to amend the Workers Compensation Act that I plan to introduce in the near future to ensure employers are treated fairly in the calculation of their experience modification factors. These factors are calculated by the PA Compensation Rating Bureau (PCRB) and apply to all employers in the Commonwealth of PA with annual premiums of $10,000 or more. The experience modification factor is unique to each employer and is based on the past claim experience, payrolls and classifications assigned to the employer. The experience modification factor, just as in most forms of insurance, is an integral part of assessing the premium that an employer actually pays.

The PCRB rating plan allows for revision of claim values and experience modification factors under specific circumstances. The insured employer is entitled to a refund of the workers’ compensation premium when claim values are corrected and experience modification factors are revised, but only for a two year “look-back” period.

Under the current system, insurers are only required to retroactively adjust an employer’s experience modification factor if a reporting error occurred in the value of a claim that affected the experience modification factors for the current policy period and the previous 2 policy periods. If a reporting error is identified in a time frame greater than two years from the expiration of the experience modification factor, the insurer is not required to adjust the experience modification (even if the error was on the part of the insurer). This legislation will allow the PCRB to revise the experience modification factors without a time limitation and require the insurance companies to refund the additional premiums that employers are owed.

In essence, this legislation greatly benefits employers in that it ensures that mistakes in a claim’s data that might have affected policies issued more than two years before their present billing year are still taken in account.

Thank you for your interest in this matter.

MM:jmm

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Introduced as HB1754