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Work Comp Wellness Plans – Should Industry Follow Feds?

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Work Comp Wellness Plans – Should Employers Receive An Incentive?

Should Work Comp wellness plans mimic the recent Obama Administration action on health wellness plans?

Picture Of Women Exercising Work Comp Wellness Plans Park View
Wikimedia – Port of San Diego

Recently, the Obama Administration had issued a rule that employees can receive up to a 30% incentive of the lowest priced healthcare policy issued by the employer’s health insurer.

Would this work in the Workers Comp market.  Are there Work Comp wellness incentives already in place?   Could the Workers Comp market afford allowing a 30% reduction in premiums for a well-rounded work comp wellness plan?

Actually, there are three areas where the incentives already exist in the WC marketplace.   Those three are:

  1. Experience Modification Factor – If the employer has a wellness plan in place, the area where it would show the most effect would likely be the E-Mod (X-Mod).   As noted often in the articles on this blog, the E-Mod would take up to 5 years to fully show the effect of a wellness program.

    Exercise Work Comp Wellness Plans At Gym Studio
    Wikimedia – www.localfitness.com.au
  2. Schedule Rating Factor – Even if the E-Mod would possibly take 5 years to show a full effect, the Schedule Rating Factor could be applied to a policy at the beginning.  This may be a great area for carriers to have a marketing advantage.
  3.  Market access – Very often in the WC marketplace, a carrier or group of insurance carriers will decide to not write a market in the state.   Our trucking clients could not find coverage other than State Risk pools from 2003 – 2009.   Would a carrier that is not writing a certain market change its mind if the employer had a proven wellness program?   This area may be more of a projection than reality.

I have attended quite a few conferences over the years where wellness programs were covered or were the main topic.  At that time,  I had thought, this will never work for WC.   Work Comp wellness plans may be an area to consider over the next few years.

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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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