The eMod is calculated as which ratio?

The eMod is calculated as which ratio?

• A. Expected losses / actual losses
• B. Payroll / 100 x classification factor
• C. Actual losses / expected losses
• D. Actual losses x D-ratio

Answer: (C)

The eMod measures how an employer’s actual workers’ comp losses compare to what’s expected for their payroll and job mix. It is calculated by dividing actual losses by expected losses. If actual losses are lower than expected, the eMod falls below 1, reducing the premium; if actual losses exceed expectations, the eMod rises above 1, increasing the premium. The expected losses come from applying standard loss expectations to payroll and classification, not from the reverse ratio or other formulas. The other options don’t reflect this relationship: reversing the ratio would give the inverse; using payroll and classification in that form is for base premium calculations, and multiplying by a D-ratio isn’t how the eMod is determined.

The eMod measures how an employer’s actual workers’ comp losses compare to what’s expected for their payroll and job mix. It is calculated by dividing actual losses by expected losses. If actual losses are lower than expected, the eMod falls below 1, reducing the premium; if actual losses exceed expectations, the eMod rises above 1, increasing the premium. The expected losses come from applying standard loss expectations to payroll and classification, not from the reverse ratio or other formulas. The other options don’t reflect this relationship: reversing the ratio would give the inverse; using payroll and classification in that form is for base premium calculations, and multiplying by a D-ratio isn’t how the eMod is determined.