4123-17-03.2 Experience modification cap.  

  • Text Box: ACTION: Filed Text Box: DATE: 06/13/2016 11:24 AM

     

     

     

    4123-17-03.2               Experience modification cap.

     

     

     

    (A)  Definitions.

     

    As used in this rule:

     

    (1)     "Eligibility determination date" means the April March first immediately preceding the policy year for which the EM is being calculated for private employers, and the October September first immediately preceding the policy year for which the EM is being calculated for public employer taxing districts.

     

    (2)     "Experience modification" or "EM" means the experience modification as determined under rule 4123-17-03 of the Administrative Code.

     

    (3)    "Safety requirement completion date" means the last business day of April March for private employers and the last business day of October September for public employer taxing districts.

     

    (B)    Except as provided for in paragraph (D) of this rule, the bureau shall limit the increase in EM of an employer meeting the eligibility requirements of this rule to one hundred per cent of the initial EM calculated for that employer in the preceding rating year.

     

    (C)  Eligibility requirements.

     

    (1)  As of the eligibility determination date,

     

    (a)   The employer must be current with respect to all payments due the bureau, as defined in paragraph (A)(1)(b) of rule 4123-17-14 of the Administrative Code.

     

    (b)   Except as provided for in paragraphs (C)(1)(b)(i) and (C)(1)(b)(ii) of this rule, the employer must not have cumulative lapses in workers' compensation coverage in excess of forty days within the preceding twelve months.

     

    (i)    For the policy year commencing July 1, 2015, private employers must not have cumulative lapses in workers' compensation coverage in excess of forty days within the preceding nine months.

     

    (ii)     For  policy  year  commencing  January  1,  2016,  public  employer

     

     

    taxing districts must not have cumulative lapses in workers' compensation coverage in excess of forty days within the preceding nine months.

    (2)     An employer must annually complete a safety program prescribed by the division of safety and hygiene no later than safety requirement completion date during each policy year in which the cap applies. If the employer fails to comply with these requirements, the bureau will remove the cap for the policy year in which the requirements were not met and use employer's uncapped EM for that policy year.

    (3)   If an employer fails to report actual payroll for a policy year or fails to pay any premium due upon reconciliation of estimated premium and actual premium by the date set forth in rule 4123-17-14 of the Administrative Code, the bureau will remove the cap for the subsequent policy year and use employer's uncapped EM for that policy year. An employer must report actual payroll for the preceding policy year and pay any premium due upon reconciliation of estimated premium and actual premium for that policy year no later than the date set forth in rule 4123-17-14 of the Administrative Code.

    An employer will be deemed to have met this requirement if the bureau receives the payroll report and the employer pays premium associated with such report before the expiration of any grace period established by the administrator pursuant to paragraph (B) of rule 4123-17-16 of the Administrative Code.

    Such penalty shall not be applied if the bureau receives the payroll report and the employer pays premium associated with such report before the expiration of any grace period established by the administrator pursuant to paragraph (B) of rule 4123-17-16 of the Administrative Code.

    (D) An employer removed from the EM cap program for failure to meet the criteria set forth in paragraph (C)(3) of this rule will be rerated for the full policy year at the employer's base rate or experience-modified rate as determined by the employer's expected losses for the policy year.

    (D)(E) Opt-out provision.

    The bureau will automatically apply the cap to an employer that meets the eligibility requirements of paragraphs (C)(1)(a) and (C)(1)(b) of this rule. An employer may voluntarily withdraw from the EM cap program by providing written notice to the bureau.

    (E)(F) Application of cap to successor policies.

    (1)     Where a transfer of experience occurs pursuant to rule 4123-17-02 of the Administrative Code, the resulting EM is not subject to limitation under this rule unless one of the following apply:

    (a)   The transfer is a combination as a result of bankruptcy proceedings, when the transaction is a change in risk number without any change in exposure; or

    (b)   A base-rated successor wholly or partially succeeds a single policy.

    (2)   If the criteria in paragraph (E)(1)(a) (F)(1)(a) or (E)(1)(b) (F)(1)(b) of this rule are met, the predecessor's published EM in the preceding rating year will be the EM published for the successor in the same rating year for purposes of determining whether the cap applies under this rule.

    Effective:                                                             07/01/2016

    CERTIFIED ELECTRONICALLY

    Certification

    06/13/2016

    Date

    Promulgated Under:                           111.15

    Statutory Authority:                           4121.12 , 4121.121 , 4121.13

    Rule Amplifies:                                  4121.12 , 4121.121 , 4123.29 , 4123.34

    Prior Effective Dates:                         7/1/13, 7/1/14, 9/4/14

Document Information

Effective Date:
7/1/2016
File Date:
2016-06-13
Last Day in Effect:
2016-07-01
Rule File:
4123-17-03$2_FF_A_RU_20160613_1124.pdf
Related Chapter/Rule NO.: (1)
Ill. Adm. Code 4123-17-03.2. Experience modification cap