Workers Comp Self Insureds – Great Way To Start The Work Comp New Year
Five new years resolutions for Workers Comp Self Insureds are listed below. .When talking about Workers Comp premiums, self insureds are often left out in the cold. Self insureds do not pay premiums for Workers Comp. This actually exposes the self insured employer to many more risks besides not budgeting enough funds to cover WC costs.
Self insured employers may want to adopt these resolutions for 2013. Self insured employers must:
- Not think they are outside the regular WC system. Self insureds often say “We do not have to worry about ______ as we are self insured.” Nothing could be further from the truth. They may not have a Mod, but a Loss Development Factor should be calculated every year. The LDF is very similar to a Mod. The premium-paying companies are not that much different from a large deductible or a self insured program in this area.
- Realize there is a closer fiduciary relationship with their TPA than with an insurance carrier. There is no “buffer” that a Mod and premium supply. The TPA is spending directly out of one of your budgeted accounts. Reading over your TPA contract may produce some surprises.
- Understand their TPA expenses. Many self insureds pay attention to only the yearly cost to handle the claims – usually paid per claim. Has your company considered the bill review, PPO network, rehabilitation nurse, and other TPA costs? If not, you may want to obtain an analysis of those charges.
Not think they are adjusting the claim. Many of the self insured employers usually have a Risk Management Department. Managing risk and adjusting a WC claim are very different. The TPA was hired for their claims expertise. Monitoring the claim is excellent. Calling every shot on a claim can be very costly.
- Periodically review their TPA’s performance on a random selection of claims. This function goes beyond emailing questions to the adjuster. Medical Only claims should be included in the selection. Festering Medical Only claims are usually the ones that appear out of nowhere.
- Bonus – Have a prescribed level of reserves, settlements, bill payments, that must be approved by the employer. This is usually in your TPA contract. If not, you should add it at renewal/bid time. Making the TPA’s authority level too low can end up hampering your TPA’s ability to close claims.
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