Premium Audit For Large Deductible Programs

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Large Deductible Programs

I had been asked this question three times over the last two weeks. “We have a large deductible programs for our Workers Comp.” Can those policies be audited for overcharges?”

Hand Presenting Deductible Programs Coins and Increase Arrow
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The three main questions that I asked were:

  1. Did your company pay some type of premium to your carrier for handling the claims?
  2. Did your company receive or should your company have received an E-Mod sheet from NCCI or your state’s rating agency?
  3. Was an audit performed by your insurance carrier on your large deductible policy?

If you answered Yes to all three, then your company should be able to have your current and last three years policies audited for overcharges. Even though you may have insuring agreements with your carrier, if you pay premiums and the carrier audits your polices, your company should be able to have your large deductible program examined by your own independent auditor.

The mechanics of the policies whether a regular first dollar insurance company or a large deductible are basically the same. The one main area that changes is there is an agreed amount to handle the claims that may be different from the carrier’s usual way of charging premiums.

One very large misunderstanding that we have heard from a few of our large deductible clients is that the insurance carrier will not report the claims to NCCI or state rating bureau. Almost all large deductible policies I have ever seen are reported to the rating agencies.

Up next is the answer to the question “Did the CMS’s enforcement of the Workers Comp Medicare Set Asides cause claims to stay open much longer than in the past?”

Diagram Of Large Deductible Programs NCCI States
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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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