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Home » Archives for September 2020

Archives for September 2020

Workers Comp Reserve Reduction Strategy – Critical Last Step

September 30, 2020 By JL Risk Management Consultants

Workers Comp Reserve Reduction Strategy – Do This Last Critical Step 

Many articles in this blog center around formulating and enacting your workers comp reserve reduction strategy.   We have heard from many article/blog readers -where the anticipated reserve reductions did not tabulate properly.   

picture steps to workers comp reserve reduction

Public Use License – Wikimedia – DanielZanetti

We heard from an agent today with the question – what happened – there was no movement in the workers comp reserves.   The time this hits the fan is when the Experience Modification Factor was published by the insureds respective rating bureau. 

The insured or their agent then contacts us about what happened after the reserves were negotiated down but the Total Incurred (Paid + Reserves) did not reduce one penny. 

Adjuster Relationship = Timely Workers Comp Reserve Reduction

My first out-of-the-box questions cover the article from last week on reserve reductions – click here.   The one question that I always add is – did you pull your Workers Comp reserves just before the UNISTAT Date?    

Workers Comp adjusters are overloaded at the end of a month.  DO NOT expect them to drop everything if you request a reserve reduction two days before the UNIT STAT Date.  

The working relationship with the adjuster becomes very important when you request a reserve reduction on a certain file or group of files.  

Your Reduction Request is Ranked 13 out of 13 – OMG!

Blue Puzzle Workers Comp reserve reduction on the floor

Wikimedia Commons – Jared Tarbell

The reduction will not occur- trust me.  If you want to know what claims adjuster is doing – check out the 13 duties of a workers comp adjuster that I originally wrote in 1994.   

Most TPAs and carriers want all the 15-and-60-day reserve increases cleared out by end of the month.   

Your reserve reduction or closing request is ranked 13th out of 13.  It is similar to ESPN’s Bottom  10 College Football Poll. 

So – if you are reading this, go back to the reserve reduction article last week, and then follow all the links from there on getting your reserve reductions through and reported to the rating bureau.  

For more info, please use the Search Box at the top right of any webpage – totally worth using it.

Self-Insureds – You Are In On This Too (A Little Secret)

Yes, you are not out of the Mod system, except you have a Loss Development Factor to contend with at comparably the same time as the UNITSTAT Date. 

Most of the LDF’s use the same timing as the Rating Bureaus and the UNISTAT Date.  You are obtaining an independent LDF – right? (Hope so -if not Use The Contact Us page on the website). 

Last Step to Your Workers Comp Reserve Reduction Strategy Is..

You must pull the Workers Comp Loss Run one more time to make sure the reductions you are anticipating are on the books before the UNIT STAT date kicks in.  Yes, self-insureds are included – obtain your TPAs loss run.   

The reserve increases or decreases must work their way across many desks (now virtual).  If you are dealing with large reserves, the request may have hung up somewhere in the process.   

As I have said repeatedly, online access to downloading your own loss runs is beyond important at this time in your Workers Comp reserve cycle.   Printing our on-demand loss runs helps insureds and self-insureds avoid having to request one and waiting for a response. 

The last step should be done approximately a week before the UNISTAT Date.   

Red Alert if.. (Star Trek reference)

Big Red Workers Comp reserve reduction Button

Wikimedia Commons – włodi

If the reserves are still at the same levels or the files did not close, you must drop everything and take care of the situation.   You have followed the reserves all year – push it over the finish line.   Email the adjuster with a follow-up call to see why no anticipated reserve reductions occurred on the files.  

Remember that you are dealing with #13 out of 13 adjuster duties – and if it is the end of the month, adjusters are totally overloaded. 

Do not wait until the last day of the month or the last day before the UNISTAT date.  You are going to be disappointed with the results.  Your Workers Comp reserve reduction strategy will be all for naught. 

 

 

©J&L Risk Management Inc Copyright Notice

Filed Under: Reserve Reduction Program Tagged With: ranked 13th out of 13, Star Trek reference, tabulate properly, totally overloaded, UNISTAT

How J&L Reduced Workers Comp Reserves $300,000 In One Month

September 24, 2020 By JL Risk Management Consultants

Animal Rescue Loss Run Analysis Reduced Workers Comp Reserves – Short Deadline

We reduced Workers Comp reserves for an Animal Rescue and Veterinary in 30 days by 300,000 was one of our most recent successes.   How do we do it?   Follow along – maybe you can do it for your company or client.

pic of puppy sleeping reduced workers comp reserves

Wikimedia Commons License – Eugene0126jp

Making available more funds to help save kittens and puppies felt great – using the below semi-secret method.   An agent contacted me to help her with a large client where their Experience Mod was going to incur a sky-high spike.  Yikes! 

Self-insureds can use the same techniques – the timing can be adjusted to whenever you have an LDF calculated for you.

The Method To The Madness – 10 Steps (Two Bonus) 

  1. Obtaining the correct loss runs – the agent and I could not obtain the correct loss runs for many weeks.  Three different versions of the claims loss run existed with different claims on them. 
  2. Online Access – I have been harping on having the claims reserves and notes access for over 25 years.   The agent and I were able to obtain an online account with the correct info.   You can print your own loss runs if you have an online account with the carrier.   We received this two weeks before the UNIT STAT date.
  3. Understand Your UNIT STAT Date.  You have to know what reserves peg to the Experience Mod and on what date.  Follow this link for an explanation of the UNIT STAT date.  So many end-of-year or end-of-policy-year reviews can be very worthless. 
  4. Understanding What To Leave In – What To Leave Out – many claim loss run review requests from employers and agents say – “Hey, let’s review them all” – the wrong method.   As a claims person for many years, reserves increases were sometimes caused after having to review a set of claims for an insured and/or agent.  Let some sleeping dogs lie (no pun intended), but which ones to pick and which ones to pass over? 
  5. These &^%$& Reserves Are Too High – the bane of many adjusters – the same as #4, but on an individual claims basis.  The comment will usually cause an adjuster to dig their heels in the ground and push back hard.   Threatening to bring up the reserving with their claims supervisor is not recommended. 
  6. Look For The Algorithms- if you have claims notes and reserve access, many claims departments have some type of tracking algorithm (analytics) that may point out over-reserving.   You are not going to find this info on just a claims loss run.  J&L has its own algorithm – it is called workers comp claims experience. 
  7.  Relationships, relationships, and relationships – the most important of these ten.   The agent had a working relationship of sorts with the claims adjuster.   Even though we were running out of time, the agent never challenged the claims adjuster.  <<very important point.   
  8. Employers and agents, do you know who is working on what files – no, not the name on the loss run – have you spoken with that adjuster – best by email.  See #7 – do not come out of the blue and make the request. 
  9.  Explain Your Goal – adjusters are goal setters and seekers – explain to them what you are doing by having the reserves reduced and the results you are seeking.  
  10. Pick The Top Three – a huge insured may want to pick five.   Workers Comp claims adjusters are short on time.  Make sure that you do not ask for 10 – 15 claims to be reviewed for reserve reductions.   That request will go to the bottom of the pile and then the UNISTAT Date will pass and your efforts to have reduced workers comp reserves will all be in vain. 
  11. Bonus – Show The Insured The Experience Mod Differences – calculate what the Mod would have looked like without the reduction.   This can be complicated – be careful. 
  12. Bonus #2 – Try to start the process at least 90 days before the UNISTAT Date.  Reserve reductions may have to go through a Claims VP, Manager, and Supervisor to approve reduced workers comp reserves.  Start early. 

The Results Of The Reduced Workers Comp Reserves

Sea Turtle reduced workers comp reserves under the sea

Wikimedia Commons – Brocken Inaglory

The final results will not be known until the UNIT STAT publish date.  The final results of the reduced workers comp reserves should be published in December of this year.  

Make sure that you convert the differences in #11 above to premium dollars if possible. Reduced workers comp reserves are great. The final effect on the premiums is even better.

 

 

©J&L Risk Management Inc Copyright Notice. 

Filed Under: Reserve Reduction Program Tagged With: goal setters and seekers, kittens and puppies, sky-high spike, tracking algorithm, UNIT STAT, Veterinary

Physical Premium Audits – COVID 19 Removed The Physical Part

September 24, 2020 By JL Risk Management Consultants

Will Today’s Hybrid Audits Ever Return to Physical Premium Audits?

First – let us define the three types of audits in this article – 

pic of coronavirus mask physical premium audits

Wikimedia – NetanelBacharSchwartz

Short Definitions

Hybrid -the records are usually reviewed offsite -technology has allowed much easier access to employer records without having a “physical presence” at the employers’ offices.   If the employer hires its own premium audit consultant, the audit is usually hybrid. 

Self-reporting audit– the employer submits their payroll and classification codes to their insurance carrier.   Spreadsheets are critical to the success of self-reporting audits.   This type of audit usually occurs with very small companies.  

Physical – the premium auditor physically visits the employer’s offices to review the records onsite.  Many states require physical premium audits if the premium or payroll amount reaches a minimum figure.    The auditor may request to take some of the records offsite – my opinion on records removal can be found here.

COVID-19 Lockdowns Changed Everything 

The first that I heard of employers not allowing any type of outside contact began in March and has not changed that much since then on who comes and goes at employers.  

Hybrid audits became very necessary in states such as California and New Jersey.  The Departments of Insurance required the carriers to process premium refunds due to furloughed employees and reclassified employees along with other requirements such as 90-day grace periods for premium payment.  

The Classification Code 8871 became very popular almost overnight.    The Telecommuter Class Code was extremely important for employees working from home on their computers. 

Three carriers and two agencies contacted J&L to obtain our opinion on how to process refunds to employers even though physical premium audits were placed on hold.   The answer was modified hybrid audits.

Hybrid premium audits came to the forefront over the last six months.  

My Predicted Change to Physical Premium Audits

In my opinion, physical premium audits will not be eliminated entirely and replaced with hybrid audits.  Premium audit disputes would spike over “the auditor does not know what we do here at our plant” or something similar. 

My predicted change is the Departments of Insurance and Rating Bureaus (NCCI, WCIRB, etc.) will increase the minimum requirements for physical premium audits to a higher level.  

How will this occur? The process has already started for insurance carriers and premium audit companies.  Check out this webinar today on premium audits. 

Child in medical mask physical premium audits during coronavirus pandemic

Wikimedia Commons – vperemen.com

Premium audit companies and insurance carrier premium audit departments have started using algorithms and analytics to choose the type of audit – from the webinar page – 

“The webinar will focus on how insurance carriers are integrating advanced analytics and machine learning to their premium audit process t

PRP results carriers are seeing the benefit of proactive risk mapping. 

Objective: Understand how analytics works and how carriers can integrate modeling into their premium audit process”. 

Physical premium audits will never be eliminated totally.  How premium audits are conducted post-COVID-19 will change in early 2021 and 2022.

©J&L Risk Management Inc Copyright Notice 

Filed Under: hybrid Tagged With: 90-day grace periods, agencies contacted, integrate modeling, New Jersey, proactive risk mapping

Hard Workers Comp Markets – The Silent Reasons Why

September 17, 2020 By JL Risk Management Consultants

Hard Workers Comp Markets – Two of the Reasons Not Discussed That Often

The hard workers comp markets usually occur when the suppliers (carriers) cut the supply of insurance to (demand) employers.   I have heard investment returns often discussed in many of the reinsurance webinars and articles – not so much in the workers comp insurance discussions.   

basic supply demand chart hard workers comp markets

Public Domain License

Those two areas are:

  • Investment returns
  • The stacked random variable introduction this year

Investment Returns Influence on Hard Workers Comp Markets

 Investment returns remain one of the drivers of the insurance markets.   The investment returns that carriers experience influences the rates they charge their insureds.  

Insurance carriers heavily prefer solid non-volatile investments such as deposit interest rates.   Even though the stock markets have recovered much of their losses the volatility remains extreme.   

The nations’ largest rating bureau NCCI – published a .83 combined ratio last year.   In a very roundabout way, this means the carriers are receiving a 17% return on premiums written.   That percentage indicates the market is healthy with much competition.  A soft market would likely be the result of such dramatic numbers.  

Stock Market Volatility and Extremely Low Interest Rates 

If one reads any of their mutual funds’ prospectus, many times right on the front page the mutual fund says – there is a chance of loss. 

Even though carriers had a 17% return on premium, the wild swings in the stock markets make most carriers very uneasy.   Carriers have that same chance of loss as an individual investor.   The 17% return can be lost in a few days. 

Insurance carriers prefer interest-bearing investments including bonds.   I just read the NC State Employees Credit Union investment returns on IRAs.  IRAs are considered permanent investments – the money stays there.   The rate of return was 0.76% (Wow!).   

The safety of interest-bearing investment is offset by the minuscule rates of return.   Bond markets do not look that great either.  

How do insurance carriers remove this volatility – by not underwriting all markets or class codes.  They can remove risk on the “other end” of their financial books.   Many insurance industry experts have almost unanimously said the markets are “tightening.”  

The tightening could be temporary.  Workers Comp carriers move very slowly back into a market or class code where they have pared back underwriting certain companies.  

New Random Number Variable – Heavy Effect on Workers Comp Hard Markets

I have attempted to not write articles on COVID-19 lately.  So many writers publish those articles every week.   The COVID-19 caused a random-number-variable stacking. 

Presumptions and Claims Handling 

Woman Doctor Hard workers comp markets with yellow mask on

Wikipedia – Agência Brasília

As of today, 17 states have passed COVID-19 presumption laws that make actuaries, underwriters, and claims handlers very uneasy.  

Many claims experts including myself have voiced their opinions of the need for presumption laws.  I wrote an article on that subject a few weeks ago.  Check it out.   The Workers Comp Occupational disease statutes have presumptions built into them.  

Regardless, they are law now and must be followed.  The COVID-19 is a stack-risk.  

COVID-19 introduces three random number variables to the risk equation:

  • COVID-19 increases the risk of an on-the-job occupational disease
  • The presumption laws may change the claim handling procedures for the investigation of COVID-19 claims. 
  • Our changing relationships with China – this is a subject for a later article. 

When you have actuaries, claims handlers, and especially underwriters nervous, the best way to remove some of the nervousness is by not underwriting every company that submits a workers comp app like the old days.   

The nervousness results in hard workers comp markets. 

 

©J&L Risk Management Inc Copyright Notice

Filed Under: hard market Tagged With: dramatic numbers, experience influences, mutual funds' prospectus, nervousness, solid non-volatile

Loss Cost Decrease Does Not Directly Result in Premium Decrease

September 17, 2020 By JL Risk Management Consultants

Loss Cost Decrease Question From Newsletter Reader

A newsletter reader recently asked this question after reading that their state recommended a Workers Comp Loss Cost decrease recently.   

Graph of loss cost decrease dog reaction times

Wikimedia Public Use – JLW87

If our state has a Loss Cost decrease does that mean we will pay less premium?   My answer to their email inquiry was “not necessarily.” 

I have written on this subject a few times over the last 12 years.  Loss Cost increase and decrease questions seem to one of the unexpected more popular questions since 2000.   

Many states have been very active in publishing Lost Cost information over the last two weeks.   Our HQ state (North Carolina) just recommended a 3.9% decrease.   

California’s WCIRB (Rating Bureau) refers to these rates as advisory pure premium rates.   The WCIRB has a great definition of advisory pure premium rates that can apply to Loss Costs:

California advisory pure premium rates reflect a projection of losses and loss adjustment expenses per $100 of payroll for each of the approximately 500 standard classifications used in California. The data used to calculate the pure premium rates proposed by the WCIRB are derived, in part, from aggregate financial data collected from insurers who have workers’ compensation underwriting and claims experience in California.

Loss Cost Multiplier Definition 

Insurance carriers very often publish and re-publish Loss Cost Multipliers.   Loss Cost Multipliers are sometimes published per insurance company as in this Kansas example or per each or certain classification codes

 Loss Cost Multiplier (LCM’s) definition – 

LCM’s are basically the insurance carrier’s deviation from the advisory loss costs that are published by NCCI or your state’s rating bureau.

The advisory loss costs are what each state has set for a Classification Code. Advisory loss costs do have a function. They are the basis for the Loss Cost Multipliers.

Loss Cost Decrease A Good Sign

If you would like to see what a decrease looks like check out this lengthy letter from the North Carolina Rate Bureau to The Insurance Commissioner (thanks WorkCompCentral.com) look like – here you go. 

Pages 11 – 15 show the actual rate charts.   This is an example.  Most states follow the same type of process to have the Lost Costs approved by the Insurance Commissioner.    

If a state recommends a Loss Cost reduction, does this mean that the companies in that state are safer?  Yes, but not necessarily.    

Huge Loss Cost and LCM Difference 

A huge Bamboo Tree Loss Cost decrease in the Forest

Wikimedia Commons – Stéfan Le Dû

One of the big differences between Loss Costs and LCMs is Insurance Commissioners have rejected, raised, or lowered the Loss Cost recommendations by NCCI or their own state’s rating bureau.   

I have yet to see an Insurance Commissioner reject a carrier’s LCM filings.   The rejections could have occurred, but I have yet to see one. 

Bottom Line

And the final answer is – Loss Cost decreases show a good trend for a state.  The carriers adjust their rates almost at will.   Please pull up your Workers Comp Dec Pages and review them before policy renewal and at the premium audit.   

You do read your Dec Pages – yes?  If not, please read or have someone in your company read them that oversees your funds. 

 

©J&L Risk Management Inc Copyright Notice

Filed Under: advisory rate Tagged With: actual rate charts, aggregate financial, increase and decrease questions, LCM filings, standard classifications

Premium Audit Payroll Figures More Critical Due To COVID-19

September 10, 2020 By JL Risk Management Consultants

Premium Audit Payroll Numbers Now More Important Than Ever

Why is the Workers Comp Premium Audit payroll accuracy more important in 2020?  Yes, the COVID-19 pandemic may reach into your premiums more than you or your company may have anticipated. 

picture of savings bond premium audit payroll figures

Copyright – National Archives

Let us look at the basic components of your Experience Modification Factor – the Worksheets you should be receiving from your agent or rating bureau.  

Basics of The Experience Modification Factor Formula

You do not have to figure it yourself – as the savings bond picture says – you may only need to understand how a heavy reduction in payroll can increase your Experience Mod.  

Experience Mods have a lookback period of three years.  The last policy year and associated claims will not show up anywhere in your Mod sheets – one of the basic rating rules. 

Yes, I do realize the Rating Bureaus are changing some of their rules to aid companies with the COVID-19 pandemic.  What I am covering will not change for the most part. 

For example: 

Policy renewal    January 1, 2022 – remember the workers comp rating algorithm is a delayed system.  

The 2021 policy and claims will not show up anywhere (could be the post-pandemic recovery period?).   

Payroll – these are from a worksheet I am currently reviewing and forecasting. 

Policy Dates    Payroll Claims – Total Incurred
1/1/2018 – 1/1/2019$ 2,634,000323,000
1/1/2019 – 1/1/2020$2,874,000292,500
1/1/2020 – 1/1/2021$450,000102,000

Unfortunately, the payroll had fallen – the class codes stayed the same- in other words, the company shrank but did not change during the pandemic. 

I will spare you cranking the formulas through with a ton of numbers in this article.   Think of higher payrolls being able to absorb the risk.    The premium audit payroll numbers are reported directly to the rating bureau.   

The $450,000 looks out of place.  Why?  Unless the employer had a very bad year the $102,000 in total incurred for the 2020 policy year looks high or were the payroll figures not reported properly?   

The Mod in this situation will likely tick up.  The $450,000 is not enough to cover the 102,000 in losses. 

Wait – I thought lower Premium Audit Payroll Figures saved my company premium 

Well, here is the “catch” on that one.   Many of our client employers bid on large private or governmental contracts. If the Mod is above 1.0, you are out in the cold.  I always advised the Risk Managers over these contracts to allow a little leeway.  Allowing an employer with a 1.0 Mod or higher to bid has become rarer each year.

Temp-to-perm employers now see the 1.0 requirement more often.   

Bottom Line – you want accurate numbers on your Mod sheets including the premium audit payroll info. 

 

©J&L Risk Management Inc Copyright Notice

Filed Under: Workers Comp Payroll Audits Tagged With: $450, 000, cranking the formulas, delayed system, Pandemic, savings bond picture

Physical Therapy Study – Great Workers Comp Loss Control

September 10, 2020 By JL Risk Management Consultants

Physical Therapy Study – Early Use Means Lower Costs – WCRI 

A recent physical therapy study proves what we have been saying for over 30+ years.

picture army physical therapy study clinic

Public Domain

Two of the most-read read articles on this website consist of articles on therapy in general.   I did not think about why they were popular.  Two covered physical therapists while the other covered occupational therapy.     

Those three articles are: 

  • Occupational Therapy Can Be Worth The Expensive Costs
  • Is Physical Therapy Really Worth It? 
  • The Medical Provider The Injured Worker Sees The Most

The second article was my experience with a tough but great physical therapist when I crushed the bones in my left wrist (ouch!).   My recovery turned out excellent with full use of my left wrist – no surgery to place pins in my wrists.   

The physical therapist started aggressively exercising my wrist right out of the cast.  My hand swelled the first few times then the therapy started to really help me with my injury.  

My experience with therapy agrees totally with the recent WCRI study – early use of physical therapy saves costs.   One needs to remember that the physical therapist will be the medical provider the injured workers see the most for treatment. 

Bills, Bills, Bills 

Any adjuster or insurance carrier/TPA medical bill payer will tell you that other than prescriptions, physical therapists produce more bills than almost any provider. 

I used to look at that aspect as a burden on making sure the therapist did not exceed the treating physician’s prescription or the maximum number of treatments allowed under the state Workers Comp rules. 

I was keeping tabs on the Keys To Workers Comp Savings.  The savings provided by using physical therapy early was drowned out by the number of bills received from the therapist or clinic.

The bottom line – the number of billings were generated because therapists see the injured worker more often than any other medical provider.   

The WCRI Massive Physical Therapy Study Skinny

man doing physical therapy study on the other man

Wikimedia Commons – Free stajler

The study can be found here for purchase.

Some of the highlights are:  my comments in italics 

  • Later timing of PT initiation is associated with longer TD duration. On average, the number of TD weeks per claim was 58 percent longer for those with PT initiated more than 30 days postinjury and 24 percent longer for those with PT starting 15 to 30 days postinjury, compared with claims with PT within 3 days postinjury.  You snooze on physical therapy – you lose – plain and simple.
  • Workers whose PT treatment started more than 30 days postinjury were 46 and 47 percent more likely to receive opioid prescriptions and MRI, respectively, compared with those who had PT treatment initiated within 3 days of injury. The differences between PT after 30 days postinjury and PT within 3 days postinjury were 29 percent for pain management injections and 89 percent for low back surgeries.   Physical therapy remains a much cheaper option if used timely – notice the 30-day cutoff time
  • The average payment for all medical services received during the first year of treatment was lower for workers with early PT compared with those with late PT. For example, the average medical cost per claim for workers who had PT more than 30 days postinjury was 24 percent higher than for those who had PT within 3 days postinjury.  You can pay physical therapy now or pay a big claim later.

This study is based on nearly 26,000 LBP-only claims with more than seven days of lost time from 27 states, with injuries from October 1, 2015, through March 31, 2017, and detailed medical transactions up through March 31, 2018.

The 27 states are Arkansas, California, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

The two previous paragraphs mean the study was comprehensive. 

©J&L Risk Management Inc Copyright Notice

Filed Under: Physical Therapy Tagged With: 30-day cutoff time, hand swelled, plain and simple, PT initiation

The Workers Comp Self Insurance Risk No One Talks About

September 3, 2020 By JL Risk Management Consultants

Workers Comp Self Insurance Risk – The $250,000 Repetitive Mega Claims

I sometimes forget to mention the self insurance side of Workers Comp Risk Management.   A certain Workers Comp self insurance risk conversation seldom occurs in voluntary insurance vs. self insurance decisions. 

picture of confidential self insured workers comp risk cover sheet

Public Use License – Library of Congress

Voluntary insurance may seem like an unused commodity when a premium is paid by a large company but little or no claims are ever filed.  Self insurance may seem like the best course of action to save on premiums.  

Most of the time, this angle on Workers Comp risk management may be very accurate.  The other side of the proverbial coin that seems to be ignored is when a company must face multiple mega claims. 

A mega claim as defined by the rating bureaus is any claim that has reached an incurred value of $3,000,000.    I consider any mega claim that reaches $250,000.  As I have often mentioned, $250,000 is an almost magic number where many file functions kick in at that level.  

Reinsurance is Not Catch-All Insurance 

Many self insureds have mentioned to me that “We are good, reinsurance kicks in at $250,000”.   This may be true.  With the COVID crisis and the lowering of company budgets – do you really have $250,000 to spend before the next level of insurance?  

If your company or organization has two or three claims that have reached the $250,000 level, the level of self-funding can be very tough in this economy.   Renewing your reinsurance policy may have a sharp premium increase surprise.

Why am I writing this article – because I have that situation right in front of me – where a medium-sized company is funding $750,000 for three claims out-of-pocket when their financials cannot support such a large budget output. 

Using a few risk management claim techniques,  some of the risks can be reduced – however, not all of the risk can be eliminated through loss control. 

Loss Limits and X-Mods 

Digital Machine workers comp self insurance risk paying with credit card

Wikimedia Commons – Hloom Templates

One aspect of voluntary insurance is Loss Limitations.  The loss limits control how much the X-Mods can be affected by one claim.  If you look on your Experience Modification Factor sheets, the # sign denotes that a loss limitation has occurred on a certain claim.  The # sign is usually located in the Total Incurred Column.

The loss limits can be very high – well beyond $250,000.   They function similarly to reinsurance if you think about it for a moment.  They cut your losses at a certain point. 

My point here is that at least there is a ceiling (in most states) how your X-Mod can be affected over the next four years.  That is not the case if you with Loss Development Factors (LDF).   Think of an LDF as a self insurance Mod. 

Voluntary Insurance and the Workers Comp Self Insurance Risk  

Voluntary insurance may seem much more expensive than the self insurance option – then again maybe not if you experience multiple large claims.  

Here is a very important point – the insurance carrier remains on the hook to handle and pay the benefits on multiple mega claims.  Your X-Mod increases, then again, it may be a cheaper option than paying $750,000 straight out of your budget as in the previous example. 

©J&L Risk Management Inc Copyright Notice

Filed Under: self insurance Tagged With: course of action, COVID crisis, proverbial coin, unused commodity

Workers Comp Android Apps – Journey Down The Rabbit Hole Again

September 3, 2020 By JL Risk Management Consultants

Workers Comp Android Apps – Giving It One Last Try 

Three years ago, a gentleman contacted me by phone.  He was very patient in explaining Workers Comp Android Apps were going to fade away as most smartphones can handle accessing the website directly.  An App was likely not going to assist in providing useful information.  

picture of workers comp android apps phones

Wikimedia Commons – License Google Samsung

I decided to reprise the annual review in 2019.   With the COVID-19 crisis, I thought, for some strange reason, a few apps may have been created and published on the Google Playstore.  I was partially correct.  

The Apple iTunes Store has never really had any workers comp apps.  I used to write an article on just the iTunes store that was short and deficient in any app analysis.  

Workers Comp Android Apps Found in 2020 Playstore 

I used the term Workers Compensation and Workers Compensation insurance as search terms.  The same list appeared with both search terms.    I installed each one and sampled each one – most required a Username and Password.

You can see the search results here. 

  • Lynx Workers’ Compensation Insurance Quotes  – a nationwide application process to secure workers’ compensation insurance by inputting basic info, need to know your current class codes to receive a quote.
  • New York State Insurance Fund (NYSIF) – Where Is My Check?  – this would be the one that I had thought all insurance carriers would provide as an app- saving the ubiquitous injured employee phone call.   Countless hours are spent still today looking up weekly TTD or TPD checks that have not yet arrived.  The Postal Service has experienced many delays since and due to the Coronavirus.  With adjusters working remotely, many carriers and TPAs should supply this app at a minimum. 
  • Sullivan on Workers Comp – Subscription Service for California – The standard for great California Workers Comp Law Info and Analysis – likely worth the monthly subscription price 
  • New York Workers Comp Board (NYSWCB) – Online Hearings – another great app – virtual Workers Comp hearings right on the smartphone.    
  • New York Workers Comp Insurance Fund (NYSIF)– Contact the Underwriter – this app provided the Underwriter information.  I could not tell if you could contact the underwriter on the app.  
Two Smartphones Workers Comp Android Apps in Pink background

Wikimedia Commons – pestoverde

Yes, smartphones can log directly into websites without using an app.  However, with just one click of a Google Android app, I can access solid information directly from the provider’s website.  

One can see that the NYSIF provided two well thought out apps – kudos to them.   

Even though the apps may not be used that often, the Workers Comp Android apps would function as great advertising to at least be available on the store – even though the apps may already be provided on the websites. 

Google, Apple, and any of the above apps have their copyrights preserved. 

©J&L Risk Management Inc Copyright Notice

 

Filed Under: Android, App Tagged With: Countless hours, log directly, NYSIF, Postal Service, username and password

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James J Moore
Raleigh, NC, United States

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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