Very Important Workers Comp Dates
One of the most important Workers Comp dates is upcoming. Timing is everything with reducing your Workers Comp claims and premiums. There are a few upcoming dates that are very important for Workers Comp polices in the regular market.
If your company has a January 1 renewal date, your Workers Comp reserves will soon tabulate on June 30th for your 2013 policy. If you have not started your Workers Comp reserve reduction program, the time is running very short.
Insurance carriers are not known for quickly reducing reserves on files. One of the main reasons is a larger file may have to navigate its way through the insurance to have any changes to the reserves. A file reserve of $250,000 may have to cross at least six desks and be reported to the reinsurer before the reserves are added to the file.
At 4 days per desk, the total time to have the reserves decreased to a more proper level may take up to one month after the adjuster makes their reserve reductions. Many meetings take place between the adjuster, their senior adjuster, supervisor, manager, VP, and examiner to have file reserves decreased.
The Workers Comp claim formula is Total Incurred = Paid + Reserves. You can do little to change what has been paid. I have come across two companies that will actually review the medical bills post-payment. This may be an area that will gain in popularity over the next few months.
The reserve part of the formula is negotiable. If you renew on January 1, you should be in the last phase of reserve negotiation, not the very first. One area that you can help your carrier’s Workers Comp adjusting staff is to not call them out of the blue requesting a claims review.
This can be a recipe for disaster as you may cause increases in files that you are actually trying to have reduced by the deadline date. Your company knows what is occurring with each employee much better than the adjusters. Updating them with timely information is important. You, as the employer, are basically their eyes and ears.
The updates will help your company establish a working relationship with your carrier’s Workers Comp claims department. This will let them know about your company’s:
- Medical treatment network
- Return to work program
- Timely first report of injury filing
- How your company treats injured employees
An insured’s reputation is very important as the adjusting staff will know your reputation for handling your Workers Comp claims. This can save you a large amount of premium in the long run.
If you wish to have your reserves analyzed for your upcoming policy, you would need to likely bring in an expert ASAP. If your company does not renew January 1, please email (inf[email protected]) or call us, and we will provide you with the date that your reserves will apply to your next policy.
If your carrier wishes to have a claims review with you just before your renewal date, that is a grand waste of time if you are aiming to reduce your reserves for your next policy.
Self Insureds
For most self-insureds (especially governmental entities), the renewal date for your TPA contracts is July 1st. Some governmental entities have converted the contracts to January 1 renewal dates.
There is much debate concerning the extensions of TPA contracts in place. Should a self-insured employer:
- Just renew the contract with the same TPA by an extension every year
- Place the TPA contract out for bidding on a yearly basis
- Place the contract out for bidding every three years?
The first two are great ways to lose the TPA’s adjusters that are working on your files. If you company or entity is large enough to have a Workers Comp adjuster working solely on your claims 1/3 time, they will very likely want some stability in their job.
The first two options will likely cause the TPA’s adjuster to not really be sure if they will have a job from year to year. This instability is why we recommend to bid out the claims services every three years with no extensions.
If your company or organization just keeps renewing your WC claims handling with the same company year after year, you could easily be overpaying for services or not receiving the proper level of service.
If a TPA thinks they will have your business year after year, you may want to shake things up a bit by placing your TPA work out for bid. The bid process becomes a learning experience that is well worth the time spent in the process of possibly finding a more economical and better-fitting TPA among the hundreds in the marketplace.
Voluntary Market (Non self insured)
If your policy renews in June or July, you may want to start organizing your financials for the premium auditor. If you close out your year on July 1, I recommend examining your premium auditor’s letter from last year and gather the same information for this year. This article covers preparing for your Workers Comp premium audit.
As you go through your records for closing out your fiscal year, you will have your hands on the exact data the premium auditor will request.
Making a copy of all the records (paper or electronic) as you come across them will save you double work and will cut down on the stress of closing your year out and the premium audit process.
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