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Workers Comp Self Insured Resolutions Five From 2013 updated for 2014

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Workers Comp Self Insured Resolutions – Updated for 2014

Five 2013 Workers Comp self insured resolutions have been updated for 2014.

When talking about Workers Comp premiums, self insureds are often left out in the cold.  Self insureds do not pay premiums for Workers Comp.

Two person helping hands Workers Comp Self Insured Resolutions to plant on the ground
Wikimedia Commons – Pacific Southwest Region USFWS

This actually exposes the self insured employer to many more risks besides not budgeting enough funds to cover WC costs. Updates for 2014 are in italics.

Self insured employers may want to adopt these resolutions for 2013 2014.    Self insured employers must:

  1. Not think they are outside the regular WC system.  Update – Operate its self insurance program very similar to a company that pays WC premiums.  If a self insured employer is experiencing thin profit margins due to the current economy, there is just no wiggle-room left for adding funds to their WC budget late in the year.   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.
  2. Medical Icon Workers Comp Self Insured Resolutions Vector Graphic
    (c) stockunlimited

    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.  Update – as in most WC policies, the TPA will usually have a clause that says – “We can opt to settle or pay a claim at any time if we feel it is necessary” or something similar.  See #6 on how to solve that conundrum. 

  3. Understand their TPA expenses.  Many self insureds pay attention to only the yearly cost to handle theclaims – 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.   Update- with the economy as it is today, TPA expenses can be a budget-buster.  Do you know how much your TPA spent on,  for instance, private investigation services over each of the last three years?   If not, you need to monitor all expenses very carefully.  
  4. 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 a very costly Update – especially if there is a time lag between the adjuster asking for authority to do some task and not receiving it for weeks.  This can be very costly at the time of settlement.   

    Picture Cupped Hands Presenting Dollar Symbol with Stack of Money Workers Comp Self Insured Resolutions Updated for 2014
    (c) stockunlimited
  5. Perform a scheduled reviewed each year 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.
  6. 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.   Update – an easy way to handcuff the claims staff is setting the levels too low.  This can cost an employer dearly if the adjuster is spending time asking for authority to do everything on a file rather than adjusting and settling the files.  Monitoring is much better than trying to adjust the claim from afar – see #4.  
  7. Update – Bonus #2 – Use email to contact your TPA claims staff. This is an easy way to document any communication by the TPA or employer.  If you do not know your claims staff email addresses, you are running far behind the curve.   

There are many more workers comp self insured resolutions than just these seven.

©J&L Risk Management Inc Copyright Notice

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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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