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Allocated Expenses

Allocated Expenses – acronym ALAE is the 3rd part of the reserves for a workers compensation file.  The other two are Indemnity and Medical.

The allocated expenses are defined by NCCI at their data conferences as anything that is not direct medical treatment to an injured employee.

These would be independent medical exams, attorney services, private investigators, and rehabilitation nurses.

Much debate has spawned over whether or not rehabilitation nurse services are medical treatment if they are RN’s.

Usually, allocated expenses are not considered part of the Experience Mod calculations.

Sometimes, the large deductible contracts have a 50% of medical expenses paid clause.  Large deductible contracts should be reviewed carefully for this notation.



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