Your January 1 Workers' Comp Renewal Starts Now: What Healthcare Practice Owners Should Check 60 Days Out

If your workers' compensation policy renews on January 1, the time to review it is now, not the week before Christmas.

Healthcare practice owners often wait until the renewal proposal arrives before looking closely at payroll, employee classifications, open claims, or the experience modification factor. By then, there may be very little time to correct inaccurate information, approach another carrier, or understand why the premium changed.

This year, some of the workers' compensation rate news appears favorable. The National Council on Compensation Insurance has requested an overall average 7.4 percent voluntary market rate decrease in Florida for policies effective January 1, 2027. Connecticut's filing proposes a 4.9 percent decrease in voluntary market loss costs. Idaho has accepted a smaller 0.1 percent average decrease for 2027.

Those figures are encouraging, but they do not mean every employer's premium will decrease by the same percentage. Florida and Connecticut's changes were still proposed at the time of writing, and statewide averages do not determine what an individual healthcare practice will pay.

A lower state rate only helps if the rest of the policy is right.

Your actual premium still depends on factors such as payroll, employee classifications, claims experience, the experience modification factor, carrier pricing, available credits or debits, and the way your organization is structured.

Here are the questions healthcare practice owners should be asking approximately 60 days before a January 1 renewal.

1. Is Your Estimated Payroll Close to Reality?

Workers' compensation premium is generally calculated using payroll assigned to each applicable classification.

At the beginning of the policy period, the carrier uses estimated payroll. After the policy expires, an audit compares that estimate with the payroll actually paid.

If payroll was underestimated, the practice may owe additional premium after the audit. If it was significantly overestimated, the practice may have paid more during the year than necessary and could be entitled to an adjustment, subject to the policy's terms.

Before renewal, compare the payroll shown on the current policy with:

• Actual payroll paid so far this year
• Expected payroll through the end of the year
• Current employee count
• Planned hiring or reductions
• Wage increases
• Overtime
• Bonuses and other forms of remuneration that may be included
• Owners or officers who may be included or excluded
• Independent contractors whose insurance status may need to be documented

Do not simply carry last year's estimate forward.

A growing dental office, pharmacy, veterinary hospital, physical therapy clinic, audiology practice, or home healthcare agency may have added employees or increased wages substantially. A practice that lost employees or eliminated a service may now be overstating its exposure.

The goal is not to force the estimate as low as possible. It is to make it realistic enough that the practice is neither overpaying throughout the year nor facing an avoidable audit surprise later.

2. Is Every Employee Assigned to the Correct Classification?

Not every person working for a healthcare organization necessarily presents the same workers' compensation exposure.

A front office employee who performs only clerical duties may have a different exposure from a clinician, technician, caregiver, delivery driver, kennel employee, or staff member who regularly travels between patient locations.

However, classification rules can be more complicated than matching each job title with a code. Some businesses are classified under a governing classification that applies to much of the operation. Certain clerical or outside sales roles may qualify for separate treatment only when specific requirements are satisfied. Rules and codes can also vary by state.

That makes it important to review what employees actually do, not merely what their titles say.

Consider whether your organization has changed during the year:

• Did a pharmacy begin offering delivery?
• Did a dental practice add a laboratory or new clinical service?
• Did a veterinary practice expand boarding or grooming?
• Did a physical therapy clinic begin selling or fitting products?
• Did a home healthcare agency add skilled nursing, therapy, or administrative staff?
• Are employees working remotely who were previously in the office?
• Are any employees performing duties outside the role originally described to the carrier?

An incorrect classification can create problems in either direction. A higher rated code may cause the practice to overpay. A lower rated but inaccurate code may lead to additional premium at audit and create questions during underwriting or after a claim.

Ask your insurance professional to explain each classification on the policy and which employees or payroll amounts are assigned to it.

3. Do You Have Your Experience Modification Worksheet?

Many owners know their experience modification factor, sometimes called an experience mod or ex mod, but have never seen the worksheet used to calculate it.

A factor below 1.00 generally reduces premium, while a factor above 1.00 generally increases it. The calculation compares the organization's actual claims experience with the experience expected for similar businesses, subject to applicable rating rules.

The worksheet can help answer several important questions:

• Which policy years are included?
• Which claims are affecting the calculation?
• Are the payroll amounts accurate?
• Are the claims associated with the correct business?
• Are any claims duplicated or incorrectly reported?
• Has an ownership or entity change been handled correctly?
• Is the experience being attributed to the right operation?

An experience modification factor is not simply a score assigned to the business forever. It is calculated using specific data over a defined period. Errors in that data can affect the premium.

Request the current worksheet early enough to review it before the renewal is finalized.

4. Which Open Claims Are Still Driving the Renewal?

A claim does not need to involve a recent accident to affect the upcoming workers' compensation renewal.

Open claims may carry reserves representing the carrier's estimate of future payments. Those reserves can affect loss information reviewed by underwriters and may influence the experience modification calculation when the applicable data is reported.

Approximately 60 days before renewal, request a current loss run and review:

• Every open claim
• The amount paid
• The current reserve
• The claim status
• Whether the employee has returned to work
• Whether any medical treatment remains outstanding
• Whether a claim appears capable of closing
• Whether any information appears inaccurate

This is not about pressuring a carrier to close a legitimate claim prematurely or artificially reduce a reserve. It is about making sure the file reflects current information.

For example, if an employee returned to full duty months ago but the claim file has not been updated, the carrier may be working with outdated information. A timely conversation among the employer, claims adjuster, insurance professional, and other appropriate parties may help clarify the status before renewal.

5. Are You Insured Through a PEO or Under Your Own Policy?

Some healthcare organizations obtain workers' compensation through a professional employer organization, or PEO. That arrangement can simplify payroll, human resources, benefits, and workers' compensation administration.

It can also make the insurance structure less obvious.

If your workers' compensation is provided through a PEO, ask:

• Is coverage provided under the PEO's master policy or a policy specifically identifying my organization?
• How are my claims tracked?
• Can I obtain loss runs showing my organization's experience?
• Is an experience modification factor being developed for my business?
• What happens to my claims history if I leave the PEO?
• What information will a new carrier require?
• Are all employees and states included correctly?
• How much of the PEO charge represents workers' compensation versus other services and fees?
• What notice is required if I decide to leave?

A PEO can be the right solution for some practices. A traditional workers' compensation policy can be better for others. The important thing is understanding the arrangement before you need to change it.

Waiting until the renewal deadline to ask for loss information or evaluate alternatives can make leaving a PEO much more difficult.

6. Should Workers' Compensation Be Packaged With Your Other Coverage?

Workers' compensation does not operate in isolation.

A healthcare practice may also carry:

• Professional liability
• General liability
• Commercial property
• Cyber liability
• Employment practices liability
• Commercial auto
• Hired and nonowned auto
• Business interruption coverage
• Umbrella or excess liability

Placing multiple policies with one carrier can sometimes create administrative convenience, coordinated billing, package credits, or a more cohesive insurance program. In other situations, the best workers' compensation option may be a separate carrier with stronger pricing, claims handling, loss control, or appetite for the organization.

Do not assume that bundling is automatically better or that every policy should be moved solely to obtain a workers' compensation quote.

Instead, compare:

• The total cost of the insurance program
• Coverage differences
• Claims service
• Carrier financial strength
• Available loss control resources
• Billing and audit procedures
• Whether moving one policy affects credits on another
• Whether the carrier understands healthcare operations

The lowest workers' compensation premium may not produce the best overall insurance program if moving the coverage creates gaps or causes significant increases elsewhere.

7. Have You Given Yourself Enough Time to Compare Options?

A January 1 renewal competes with holidays, employee vacations, year end accounting, and carrier staffing schedules.

Starting early gives you time to:

• Gather payroll information
• Review classifications
• Obtain loss runs
• Examine the experience modification worksheet
• Address open claim questions
• Compare a PEO arrangement with a traditional policy
• Complete carrier applications
• Evaluate coverage and pricing
• Correct inaccurate information
• Make a decision without rushing

It also gives underwriters time to understand the business. Healthcare organizations can be difficult to evaluate when an application simply says "medical office" or "pharmacy." The carrier may need to understand patient services, employee travel, lifting exposures, delivery operations, animal handling, remote work, or other details.

The more accurately the operation is described, the more reliable the quote should be.

Lower State Rates Do Not Guarantee a Lower Renewal

Statewide rate changes matter, but they are only one part of the workers' compensation premium.

For example, Florida's Office of Insurance Regulation held a public hearing on October 27, 2026, regarding NCCI's requested 7.4 percent average voluntary market decrease for policies effective January 1, 2027. Connecticut's NCCI filing proposed a 4.9 percent voluntary market loss cost decrease. Idaho accepted a 0.1 percent average decrease, while noting that individual rates may vary by job type.

Even if a decrease is approved, an individual practice could still see its premium rise because:

• Payroll increased
• Employees moved into higher rated classifications
• The experience modification factor increased
• Open claims worsened
• Carrier pricing changed
• Credits were reduced
• The practice added services or locations
• Ownership or entity information changed
• An audit identified previously unreported exposure

The headline rate is not the renewal.

Your own data determines how much of that favorable trend reaches your business.

A 60-Day Workers' Compensation Renewal Checklist

If your policy renews January 1, start with these items:

1. Compare estimated payroll with actual year-to-date payroll.
2. Project next year's payroll using realistic staffing and wage assumptions.
3. Review the duties assigned to every workers' compensation classification.
4. Request the current experience modification worksheet.
5. Obtain updated loss runs.
6. Review open claims and reserves with the appropriate claims professionals.
7. Confirm owner and officer inclusion or exclusion status.
8. Collect certificates from applicable independent contractors.
9. Review how a PEO arrangement handles claims history and termination.
10. Compare workers' compensation options within the context of the entire insurance program.
11. Confirm that every legal entity, location, and state is reflected correctly.
12. Begin carrier discussions before the holiday season compresses the timeline.

The Bottom Line

If your workers' compensation policy renews January 1, your renewal process should begin now.

Potential statewide rate decreases may help, but they cannot correct inaccurate payroll, incorrect classifications, an unexplained experience modification factor, outdated claim information, or a poorly understood PEO arrangement.

A careful review approximately 60 days before renewal gives you time to identify problems, compare options, and make an informed decision before the deadline.

Healthcare practice owners who want a deeper explanation of workers' compensation exposures can also read Workers' Compensation for Home Healthcare Agencies: What You Need to Know. Although written for home healthcare agencies, it explains several important premium and claims concepts that apply across healthcare organizations.

If you have a January 1 renewal and would like another set of eyes on your workers' compensation program, I would be happy to review the payroll, classifications, claims information, experience modification factor, and overall policy structure with you before the renewal arrives.

This article is for general informational purposes only and is not legal, accounting, or insurance coverage advice. Workers' compensation rules, classifications, benefits, and rating procedures vary by state and individual risk. Coverage is subject to the terms and conditions of the applicable policy.