The 2007 experience rating plan is used in these examples.

The 2007 primary loss formula is determined by the following.

• When the claim value is greater than $19,560:
  Actual Primary Loss = ($48,900 × claim value) ÷ ($29,340 + claim value).
• When the claim value is less than $19,560:
  Actual Primary Loss = claim value.

Note that the claim values used in this calculation are first adjusted to reflect the Medical Only Deduction, Maximum Claim Value, or Average Death Value where applicable.

Example 1

A claim valued at $55,555 classified as a time-loss claim for experience rating in 2007.

This claim is not eligible for the Medical Only Deduction. Since the claim value is greater than $19,560, use the primary formula to determine the primary portion of the claim value. The remainder of the claim value is the excess portion.

Primary: ($48,900 × $55,555) ÷ ($29,340 + $55,555) = $32,000
Excess: $55,555 − $32,000 = $23,555

Example 2

A claim valued at $55,555 classified as a medical only claim for experience rating in 2007.

This is a medical only claim so the Medical Only Deduction of $1,510 is applied. The claim value used for experience rating is: $55,555 − $1,510 = $54,045. Since $54,045 is greater than $19,560, use the primary formula to get the primary portion. The remainder of the claim value is the excess portion.

Primary: ($48,900 × $54,045) ÷ ($29,340 + $54,045) = $31,694
Excess: $54,045 − 31,694 = $22,351

Example 3

A claim valued at $20,000 classified as a medical only claim for experience rating in 2007.

This is a medical only claim so the Medical Only Deduction of $1,510 is applied. The claim value used for experience rating is: $20,000 − $1,510 = $18,490. Since this value is below $19,560, the primary portion is equal to the claim value and the excess portion is zero.

Primary: $18,490
Excess: $18,490 − $18,490 = $0

Example 4

A claim valued at $55,555 classified as a fatality for experience rating in 2007.

This claim is not eligible for the Medical Only Deduction. Even though the claim has been valued at $55,555, the Average Death Value, $191,760, is used for experience rating. This value is greater than $19,560, so use the primary formula to get the primary portion. The remainder of the claim value is the excess portion.

Primary: ($48,900 × $191,760) ÷ ($29,340 + $191,760) = $42,411
Excess: $191,760 − $42,411 = $149,349

Also see the Experience Rating Frequently Asked Questions for more information on the use of the Average Death Value.

The situation illustrated in this example is rare.

Example 5

A claim valued at $600,000 classified as a pension claim for experience rating in 2007.

The Maximum Claim Value for experience rating is $489,000, so the value of this claim is first capped at $489,000. This value is greater than $19,560, so use the primary formula to get the primary portion. The remainder of the claim value is the excess portion.

Primary: ($48,900 × $489,000) ÷ ($29,340 + $489,000) = $46,132
Excess: $489,000 − $46,132 = $442,868

The situation illustrated in this example is rare.

Additional information

The following values are used in the 2007 experience rating plan.

• Medical Only Deduction: $1,510.
• Average Death Value: $191,760.
• Maximum Claim Value: $489,000.

WAC 296‑17‑855 and WAC 296‑17‑880 are updated each year to show the current formula for calculating the:

• Primary claim cost.
• Medical Only Deduction.
• Average Death Value.
• Maximum Claim Value.