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Carve Out Programs Look To Reduce Disputes and Costs


Term Of The Day – Carve Out

Workers Comp Carve Out tis a hybrid benefit package that applies to just the Workers Comp Policy.

Dividing Carve Out pie graph
Wikimedia Commons – U.S. Government Accountability Office

An option allowed in some states, including California, where an employer and the union for the employer’s workers agree to collectively bargain a separate schedule of Workers’ Compensation benefits. This schedule of benefits differs from the statutory program imposed by the state.

Certain states do not allow this type of program as they wish to have uniform Workers Compensation benefit rules and laws.   According to the State of California Department of Industrial Relations a key feature of most carve-outs is an alternative dispute resolution process.

The goals of a carve-out may include:

  • Improve safety programs and have fewer injury and illness claims.
  • Increase access to quality medical providers and medical evaluators.
  • Lower costs of medical care.
  • Reduce disputes.
  • Improve collaboration between unions and employers.
  • Increase satisfaction of all parties.
  • Provide the opportunity for continuous improvement by renegotiating the terms of the carve-out on an as-needed basis.

California’s programs are geared towards the construction industry. Everything that exists in a carve out program should be pre-negotiated including a list of treating physicians and how to handle disputes between parties.

Adjusting claims for these arrangements requires the adjuster to follow a predefined set of rules that may differ from regular Workers Compensation adjusting.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management 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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