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Experience Rating Plan


A risk is eligible for intrastate experience rating when the premium based on payrolls or other exposures developed in the last year or last two years of the experience period produced a premium of at least $11,000. If more than two years, an average annual premium of at least $5,500 is required. These eligibility levels have been in effect since October 1, 1991.

A risk is eligible for interstate experience rating when it meets the requirements for intrastate rating for any jurisdiction on the policy, and also develops experience during the experience period in one or more additional states where this Experience Rating Plan is effective.

Refer to Massachusetts Workers Compensation and Employers Liability Insurance Manual, Page RA-5, Miscellaneous Values, Experience Rating Eligibility.

The Experience Rating Plan is mandatory for all eligible insureds. Any action taken in any form to evade the application of an experience modification determined in accordance with this Plan is prohibited.

The object of the Experience Rating Plan is to recognize the differences between individual insureds through the use of the individual insured's own loss experience. The experience rating process serves as a means of using a history of past losses to predict the future losses of an insured. This is done by comparing the experience of an individual insured to the average insured in the same classification. Therefore, using the insured's past experience, the experience modification is determined by comparing the actual losses to expected losses. 

An insured with better than average experience will produce a credit experience modification factor, while an insured with worse than average experience will produce a debit experience modification factor.  A credit experience modification factor, less than 1.00, results in a premium reduction. A debit experience modification factor, greater than 1.00, results in a premium increase. An experience modification factor of 1.00, or unity, does not change premium. 

Insurance carriers are required to submit unit statistical reports to the WCRIBMA for each policy that they issue with Massachusetts exposure. The payroll and claim information from these unit statistical reports is used by the WCRIBMA to calculate the insured's experience modification.  The experience of all insureds eligible for combination under the Experience Rating Plan, regardless of whether insurance is provided by one or more policies or insurance carriers, will be combined in the calculation of the experience modification. 
(Refer to Circular Letter #1537 - Change of Ownership / Transfer of Experience dated May 31, 1990.)

After calculation of the experience modification factor, the WCRIBMA will calculate the ARAP (All Risk Adjustment Program) surcharge factor and identify it as a separate factor on the Experience Rating Calculation sheet.

The experience modification factor is applied to the policy's Subject Premium. Refer to the Massachusetts Voluntary Market Premium Algorithm, Appendix E, or the Residual Market Premium Algorithm, Appendix F.

In Massachusetts, a risk will qualify for one, and only one, of the following for a given period of time:

  • an experience modification (either intrastate or interstate) and an ARAP factor, or

  • a merit rating, or

  • the risk does not qualify for any type of experience rating.

For more information on the Experience Rating Plan, refer to the NCCI's Experience Rating Plan Manual, Massachusetts, State Rule Exceptions and the Companion to Experience Rating Plan Manual - Massachusetts, User's Guide.


Program References:

Circular Letter #2217 dated April 29, 2013 - Experience Rating Modification Worksheet Changes and Interpretation of Experience Rating Plan Rule 4-E. Exclusions

Circular Letter #2065 dated July 30, 2007 - Revisions to the Experience Rating Plan Manual for Workers Compensation and Employers Liability Insurance and the Massachusetts Workers' Compensation Statistical Plan - Revisions pertaining to the Aggravated Inequity Rule and the exclusion of Catastrophe Code 87 losses

Circular Letter #2007 dated December 16, 2005 - Adoption of NCCI's 2003 Experience Rating Plan Manual, Updated Massachusetts State Exception Pages, and Updated Massachusetts Statistical Plan Pages Effective July 1, 2006

Circular Letter #1893 dated May 23, 2002 - Revisions to the Massachusetts Specific Rules of the Experience Rating Plan Manual for Workers Compensation and Employers Liability Insurance - Claims directly attributable to the terrorist attacks and reported under catastrophe code 48 are excluded from experience rating and ARAP calculations

Circular Letter #1748 dated May 1, 1996 - General Revision of Rates Effective May 1, 1996 - Expected Loss Rates and D-Ratios Revised

Circular Letter #1739 dated February 15, 1996 - Revision to Caps on Debit Experience Modifications

Circular Letter #1707 dated February 16, 1995 - General Revision of Rates Effective January 1, 1995 - Expected Loss Rates and D-Ratios Revised

Circular Letter #1662 dated January 14, 1994 - General Revision of Rates Effective January 1, 1994 - Expected Loss Rates Revised

Circular Letter #1653 dated September 20, 1993 - Revisions to Experience Rating Plan, Massachusetts State Special Rules Page E2, Rule D. Payrolls and Losses, Revision of Losses Note

Circular Letter #1640 dated July 1, 1993 - Relationship Between Recalculation of Experience Rating Modifications and Lump Sum Settlements

Circular Letter #1621 dated January 14, 1993 - Revised Experience Rating Plan Manual [MA State Special Rules] Effective January 1, 1993

Circular Letter #1572 dated July 17, 1991 - Increase in the Eligibility Level

Circular Letter #1559 dated January 15, 1991 - Revision of Losses Due To Special Fund Reimbursements

Circular Letter #1551 dated November 5, 1990 - Aggravated Inequity Rule, Revision of Losses

Circular Letter #1549 dated November 5, 1990 - Revised Experience Rating Plan Effective January 1, 1991

Circular Letter #1530 dated March 2, 1990 - Application of Late Experience Modifications / Contingent Modifications


Additional References for Obtaining Experience Ratings:

Circular Letter #2223 dated August, 28, 2013 - Removal of MA Experience Ratings from EXR Search on CDX

Circular Letter #2031 dated September 22, 2006 - Experience Ratings on the WCRIB's Website - enhancements to WCRATING

Circular Letter #2000 dated September 14, 2005 - March 31, 2006 Discontinuation of Hard Copy Experience Rating Information - member carriers must obtain rating info from WCRATING

Circular Letter #1978 dated February 28, 2005 - Experience Ratings on the WCRIB's Website - Version 2 - 02/28/2005 - second version of online access to WCRATING

Circular Letter #1966 dated October 20, 2004 - Experience Ratings Now Available in the Members Area of the Bureau's Web Site - WCRATING

Circular Letter #1954 dated May 24, 2004 - ACCCT's Experience Rating Worksheet Lookup Product (EXR)

Circular Letter #1923 dated June 27, 2003 - Increase in the Fee for Copies of Experience Rating Modification Worksheets - increase in the fee to $10.00 and must set up a billing account with WCRIB

Circular Letter #1919 dated April 9, 2003 - Revisions to Appendix A: Bureau Rules and Procedures, Section VI. Experience Rating, of the Massachusetts Workers Compensation and Employers Liability Manual - revisions to reflect technological changes concerning requests for experience rating calculation worksheets from insurers, insureds and other customers

Circular Letter #1903 dated December 4, 2002 - Availability of Experience Rating Factors and Employer Eligibility on the Bureau's Web Site - Experience Rating History



Program Overview

The Workers' Compensation Rating and Inspection Bureau of Massachusetts
101 Arch Street, 5th Floor
Boston, MA 02110