Indiana lawmakers consider banning e-mods in contract bidding

Lawmakers in Indiana are considering a bill that would change the way experience rating modifications are used in the bidding process for contracts for employers.

H.B. 1214, introduced Wednesday, states that a party may not prohibit an employer from bidding on a contract solely on the basis of the employer’s experience rating and would require workers compensation insurers to revise an employer’s prior experience rating after a successful subrogation claim in which money is recovered from a responsible third party.

E-mods, or EMRs, are multipliers used to adjust a company’s workers comp premium based on past claims experience. Experts have said the practice of using such scores in bidding is unfair to smaller companies and that the use of experience rating modifications by state procurement offices on weighing an employer’s safety program is a common practice that is not an effective measure for relative safety, experts have said.

If passed, the change would go into effect July 1.