Pennsylvania staffing employers should be aware of upcoming changes to the calculation of workers’ compensation insurance costs starting from April 1, 2024. The Pennsylvania Compensation Rating Bureau (PCRB) is making modifications to the existing experience rating plan to better reflect an employer’s loss experience. These changes include adjustments to the elements used in the calculation of the experience rating.

Key changes to the approved Experience Rating Plan (ERP) are as follows:

  • The ERP eligibility threshold will be lowered from $10,000 to $5,000.
  • Credibility values for smaller risks will be significantly increased, with the minimum credibility rising from 28.3% to 69.0% for the smallest eligible risks.
  • The maximum primary loss value for a single claim will vary from $10,000 for the smallest risks to $300,000 for the largest risks, replacing the previous fixed amount of $42,500.
  • The new capping rule will replace the current swing limits and secondary capping rule, introducing a formula-driven maximum modification. The proposed plan will retain only an upward swing limit of +40% and eliminate secondary capping.
  • A two-year transition rule will be implemented from 4/1/2024 to 3/31/2026 to manage substantial changes resulting from plan adoption.

Additionally, the PCRB will place a stronger emphasis on actual losses when calculating the experience rating, adjusting the range of factors used in the formula from 28.3%-93.8% to 69%-97.4%. The swing limit for experience modification will be extended to +/-40%, resulting in increased volatility of the experience mod calculation.

Given these changes, it is important for Pennsylvania staffing executives to assume responsibility for claims, medical treatment, and costs. Identifying complex claims and understanding their potential impact on the business and employees is crucial. At MMA, we partner with over 650 staffing companies to provide comprehensive coverage and ensure a secure future. Our Analytics and Data Insights (ADI) team offers evaluations for future loss projections, collateral requirements, and experience mod rates to optimize your insurance program.

To learn more about these changes impact your staffing company, contact a Marsh McLennan Agency (MMA) advisor today.

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