Nebraska Adopts "Net Reporting" for Work Comp Deductible Programs — Effective January 1, 2027
Nebraska Adopts "Net Reporting" for Work Comp Deductible Programs — Effective January 1, 2027
A change to Nebraska law means the claim dollars you pay back under a deductible will no longer inflate your experience mod — a real win for employers who take on some of their own risk.
Effective January 1, 2027 · Neb. Rev. Stat. § 48-146.03
Nebraska has updated the rules that govern workers' compensation deductible programs. Under a change to Neb. Rev. Stat. § 48-146.03 (enacted by 2026 Neb. Laws LB455), starting January 1, 2027 the losses an employer reimburses under a deductible will be credited against that employer's experience modification — a practice known as "net reporting" — unless the employer chooses a gross reportable deductible policy. Nebraska workers' comp policies, forms, and rates are regulated by the Nebraska Department of Insurance.
It's a technical change with a very practical payoff. Here's what it means.
First, a quick refresher on deductible programs
A workers' comp deductible lets an employer take on a portion of its own claim costs in exchange for lower premium. Nebraska law gives employers two options:
A medical-benefits deductible of $500 to $2,500 per claim, in $500 increments (the employer's choice); or
A large deductible covering all amounts paid, up to 40% of annual premium and no less than $50,000 (by agreement between the employer and insurer).
Either way, the insurer still pays every claim first — it pays medical providers directly and remains responsible for all benefits — and the employer then reimburses the insurer up to the deductible amount. Employees never pay any part of the deductible, and they keep their right to choose their own physician.
The old problem: paying twice
Here's the catch that has long frustrated employers using deductibles. Even though the employer reimbursed the carrier for those losses, the full loss amount still flowed into the experience modification calculation. Your mod went up as if the insurer had absorbed the whole claim — which then raised your premium going forward. In effect, you paid for the loss once through the deductible reimbursement, and again through a higher mod.
What changes on January 1, 2027
Losses you reimburse under the deductible will be credited against your experience mod while the deductible option is in use — unless you elect a "gross reportable deductible policy." In plain terms: the dollars you pay back no longer count against your mod, so your mod reflects only what the carrier actually bears.
For employers with the cash flow and claims discipline to run a deductible, this makes the arrangement meaningfully more attractive. You get the upfront premium savings of the deductible and you're no longer penalized on your mod for losses you funded yourself.
A few things to keep in mind
It's not automatic for every employer. An insurer isn't required to offer a deductible if a credit investigation shows the employer doesn't have the financial ability to cover the deductible amounts.
You pick one option. An employer choosing a deductible selects a single option and amount, and the terms must be disclosed in writing.
Gross reporting is still a choice. An employer can elect a gross reportable deductible policy, in which case losses are reported gross and the mod credit doesn't apply. There can be reasons to do this, so it's worth discussing.
The insurer still runs the claims. Your carrier continues to service and, if needed, defend all claims and report to the Nebraska Workers' Compensation Court, deductible or not.
What this means for you
If you're a financially stable Nebraska employer with reasonably controllable claims, a deductible program paired with net reporting is worth a serious look ahead of your next renewal. The combination can lower premium now without the old downside of an inflated mod later. It's not the right fit for everyone — it takes cash flow and a tolerance for funding claims up front — so the smart move is to model the tradeoff before you commit.
That's exactly the kind of analysis Mod Advisor is built for: showing how a deductible and net reporting would actually move your experience mod and your premium, so you can decide with the numbers in front of you rather than guessing.
Sources: Nebraska Department of Insurance, Property & Casualty; Nebraska Legislature, Neb. Rev. Stat. § 48-146.03 (as amended by 2026 Neb. Laws LB455). This article is general information, not legal or insurance advice; consult your broker and the Nebraska Department of Insurance for guidance on your specific situation.