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Could Requiring A COVID-19 Vaccine Increase Your Experience Mod And Work Comp Premiums?

Updated: Jan 5, 2022

I have spoken out about flaws in the Experience Rating program which is commonly used as a qualifier for new business proposals and contract renewals. My problem with the practice is that it can be discriminatory against businesses who truly have outstanding safety operations and practices. Also, there are ways to "game the system" available to some companies but not others.

More Trouble?

Yet another potential problem was highlighted in an article I read yesterday in the St. Louis Business Journal. Bob Clark, Executive Chairman and Founder of Clayco Corp., had mandated COVID-19 vaccines for all Clayco employees in early April wanting to, understandably, set an example and create a safe work environment. However, OSHA has subsequently issued guidelines stating that, when an employer mandates vaccination for employees, adverse reactions to the vaccine are to be treated as a recordable work-related incident. As such, this would normally be included in an employer's Experience Modification Rating; making the organization appear less safe in relation to its competitors. The Business Journal article goes on to say that Clayco has reversed its mandated vaccination policy for fear of a negative impact to its Experience Modification Rate.

If you are not familiar with EMRs, a higher Experience Modification Rate results in increased work comp insurance premiums and diminished competitiveness vis a vis other businesses (if you have any further questions about this, contact me directly).

As someone who, among other things, reviews Experience Modification Rate calculations every day for frustrated and overcharged business leaders, I understand assuming the worst. But, I don't believe adverse vaccine reactions should impact employers' experience mods.

Adverse vaccine reactions have nothing (zero!) to do with the safety procedures, safety practices, or the safety operations of an employer. They should not be included in Experience Modification Rates.

Good News: Most Businesses Mandating Vaccinations Should Have Nothing Worry About

Pandemics are catastrophic events like acts of terrorism and earthquakes. Injuries due to catastrophes are neither good predictors of future claims activity nor indicative of a business' present safety culture. As a result, such claims due to terrorism and earthquakes do have a catastrophe "code" to exclude them from Experience Modification Ratings.

NCCI is the "rating bureau" that calculates Experience Modification Rates for employers in most of the states. They have filed a rule change (Item Filing E-1407) for approval in each state they serve. The rule uses Catastrophe Number 12 for claims attributable to the COVID-19 pandemic and those claims will be excluded from experience rating calculations.

Here's some of the language directly from this rule:

Claims reported with Catastrophe Number 12 are excluded from experience rating calculations. Catastrophe Number 12 claims include all claims attributable to the COVID-19 (coronavirus) pandemic...

Having read this rule I don't see any language distinguishing between vaccination and other COVID-19 claims. A contact of mine at the Missouri Department of Insurance familiar with this rule told me that the "assumption is that [adverse vaccine reactions] will continue to be excluded from experience mod calculations, per E-1407."

State Approval?

NCCI rule changes must be approved individually by each state. Which is one of the reasons why I say employers should have nothing to worry about. I don't know the approval status of E-1407 in all states. But, as indicated, I checked with the Missouri Department of Insurance to verify since they always respond quick, and they have approved this filing. And, I spent a little more time to verify that it was similarly approved in Illinois.

Another reason why I don't guarantee Experience Modification Rates won't be negatively impacted is that it's up to the insurance companies to code and report these claims properly. I encounter these types of errors all the time, so, I'm pretty confident that sporadic problems will be discovered with this issue too; regardless of what rules are adopted.

What Should You Do If Mandating A Vaccine?

If you are mandating COVID-19 vaccinations or considering it, there are a couple things I would suggest:

  1. Reach out to me if you would like to find out whether or not this rule has been adopted in your state.

  2. Contact your broker to discuss the issue and make sure you are in agreement that adverse vaccine reactions should be reported under Catastrophe Number 12 and excluded from your Experience Modification Rating.

  3. Have your broker contact your insurance company underwriter to make sure your carrier is in agreement that adverse vaccine reactions should be reported under Catastrophe Number 12 and excluded from your Experience Modification Rating.

Have a great day,


Stuart Cytron, MBA has been published in trade journals such Construction Forum St. Louis and St. Louis Business Journal among others. You can read more about Stuart and how he developed a passion for helping businesses reduce work comp expenses on his website.

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