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Workers Comp Self Insurance – Five More Things To Consider

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Workers Comp Self Insurance Concerns

Below are Five Workers Comp Self Insurance concerns when reviewing your policies and audits.

Earlier this week I posted on what companies should consider before pursuing self insurance as a means to reduce Workers Comp costs. We had a large enough response to the article that I thought I would add five more concerns.

Clipart of Workers Comp Self Insurance Badge
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  1. Your Experience Modification Factor (E-Mod) will not be a 1.0 if you ever leave self insurance. NCCI and all of the other state rating bureaus all have added in rules if your company tries to jump in and out of self insurance as a way to keep your E-Mod low. This simply will not work any longer.
  2. Self Insurance and a large deductible program are two totally different insurance programs. One of the most glaring differences is that with a large deductible program your E-Mod is still reported to NCCI and/or the applicable rating bureaus.
  3. Will your company use your TPA’s services such as bill review, medical and vocational case management, pharmacy, or providers’ network? The TPA’s services may make self insurance not as economical as one might think. I have to be careful here as I received a letter recently threatening a lawsuit for revealing how much a TPA was charging extra for their services.
  4. Have you explored PEO’s, self insurance pools, carve out programs or other types of Workers Comp insurance?
  5. Finger Pointing Workers Comp Self Insurance Digital Text
    StockUnlimited

    Have you thoroughly examined your company’s internal processes in handling Workers Comp claims? We have seen where an employer or governmental entity will become self insured to get away from or change their problem areas with the insurance carrier. Actually, the problems may still be there internally and be even more costly under self insurance.

  6. Bonus – Is the management of your company going to buy into the self insurance processes? If not, a change to self insurance may not be the best approach.
There are many other concerns I could post on overall. These six and the prior five are the ones that we see most often when we assist large companies with self insurance statistical analyses
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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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