Looking Back to 2022 for 2023 Workers Comp Self-Insured Resolutions
Instead of writing up a list of new resolutions, let us see if there have been any changes in 2022 for the 2023 Workers Comp self-insured resolutions. I wrote the 2023 reboot resolutions for voluntary marketplace insureds this week.
I would add all the 2022 self-insured resolutions to the article. The GoogleBots dislike duplicate content and will de-rank both this and the 2022 resolutions. The link to the 2022 Workers Comp self-insured resolutions can be found here.
- You are paying directly from your budget. Nothing changed with this one since 2022. Watch your budgets closely on the payment of claims. Being self-insured puts employers closer to the payment. The self-insured account is always 100% funded directly out of company funds.
- Those festering medical-only claims usually turn out to be your worst nightmares. The pandemic may have caused a lower amount of treatment for minor claims. They may possibly cause a spike in long-tail claims for medical treatment and could possibly turn into a major loss time claim. Check out this article on claims festering. If someone was to ask me what my biggest concern would be – claims festering due to non-treatment of minor claims.
- Is your company still large enough in a state to justify self-insurance? With the coming Fed Rate increases, budgeting self-insurance may become a very complicated task. Obtaining a voluntary market policy quote and possibly an alternative market insurance quote may be worth the effort for comparison purposes.
- Having a working relationship with your claims adjusters becomes a must from day one. See #1 above. If you have pending claims on your loss runs do you know the name and contact info for all of your adjusters? Emailing them has been and will be the best way to contact them or provide them with claims information.
- Resetting your level of reinsurance can be tricky. When borrowing money becomes more expensive and with inflationary pressures, examining the cost of where to reset your level of reinsurance has become the most critical since 2008 – 2009. I wish there was a blanket formula to discover the direct costs of reinsurance. Unfortunately, no simple and solid formula exists today.
- Looking at other insurance markets. The alternatives to self-insurance have become a cottage industry of sorts. After the pandemic, this resolution does not seem to have changed other than the Fed Rate that we all are having to deal with through 2023. PEOs have become a very viable option since the start of 2020. Yes, PEOs consist of returning to more of a premium structure than resembling self-insurance.
- Intensify the use of My Six Keys. The keys have helped self-insureds very often over the last 20 years. See this page for the Six Keys. You probably already know them. The keys have not changed since the 1980s.
- Medical networks become more critical to self-insured success over the years. . I left this resolution completely alone from the 2022 resolutions for self-insured. It is that important. Having an industrial-minded physician with a good bedside manner makes claims costs go down. Remember, you are spending directly out of a budgeted account. Return to work becomes tantamount to your program’s success. As with the recommendations for non-self-insureds, COVID-19 may have made your workforce become very distributed across a larger area. If someone is injured while working at home, where do you send them for treatment if they have a home worker injury? Yes, they do happen. Workers Comp Boards do not appreciate requiring an injured employee to drive 1.5 hours for workers comp treatment.
- Your program will likely take hits over the years. Expect the best but prepare for the worst (reinsurance, medical networks, return to work program, etc.) Risk has a way of catching up either with numerous claims or a few huge ones.
- Keep your C-Level Executive or company owners updated/ Do not operate on an island. This resolution becomes even more important than in 2022 as inflation and the Fed Rates are increasing costs daily.
- Watch the budget for expenses (ALAE) that are not related directly to claims payments. This is still very important. ALAE includes defense attorneys, medical bill processing, and medical networks to name a few providers in this category.
I recommend that you first look at the 2022 Self-insured resolutions. I know that I already provided the link in the first paragraph. The 2022 resolutions are more comprehensive and a good article for reference.