Consider group self-insured workers' comp: sharing the burden of keeping these worrisome costs under control.
We all know the precarious and fragile financial state of many nursing homes and the multiple causes of this crisis. The rising cost of providing workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. coverage to nursing home workers is one significant contributor to the burden. From 1995 to 2002, workers' compensation medical care costs alone more than doubled in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , for example, from $2.6 billion to $5.3 billion. How should the ideal workers' compensation system operate to address this concern and still support cost-effective cost-effective,
n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. quality care?
New and more affordable models of workers' compensation coverage are becoming available to skilled nursing facilities skilled nursing facility
n. Abbr. SNF
An establishment that houses chronically ill, usually elderly patients, and provides long-term nursing care, rehabilitation, and other services. to rein in to check the speed of, or cause to stop, by drawing the reins.
to cause (a person) to slow down or cease some activity; - to rein in is used commonly of superiors in a chain of command, ordering a subordinate to moderate or cease some activity deemed excessive.
See also: Rein Rein these costs. Group self-insured workers' compensation programs are an alternative worth considering.
Group self-insurance allows similar companies or companies within defined industry sectors to join together and share both costs and benefits of mandatory workers' compensation insurance. Member premiums provide funding for any claims and expenses. Group members own 100% of group surplus, including interest income. In short, group program participants own both the assets and liabilities of the group.
A group program allows employers to determine with whom to share risk; provides incentive for efficient, cost-effective operations; and implements loss-control strategies and other means to reduce costs.
Individual organizations can determine which group members they should associate with by identifying their own standard industrial classification (SIC) code. This allows them to seek a group that covers their industry group. Also important is finding an administrator who carefully screens potential members through an extensive underwriting Underwriting
1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt).
2. The process of issuing insurance policies. and pricing process to make sure their financial well-being, claims history, and risk factors will not undermine the group. Most administrators have specific criteria and underwriting guidelines guidelines,
n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. that a prospective member must meet to become a group member of a select program. These guidelines are typically disclosed to prospective members during the quoting process and, if not, should be requested.
To minimize potential risks, all self-insurance groups have a "joint and several liability" clause in their membership agreements. In its simplest form, joint and several liability means that group members must share in any shortfalls that may result from the program's adverse loss experience. Specifically, if in a given year the group's claims or expenses exceed its premium or income, any resulting shortfalls must be corrected. Typically, this would be resolved via a renewal premium adjustment, just as in the standard market. However, groups can assess their members whereby each could pay a pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share.
In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. portion of the shortfall Shortfall
The amount by which the capital required to fulfill a financial obligation exceeds available capital.
Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. based on the ratio of their individual premium versus the total group premium.
The keys to success, and what makes employer members comfortable with joint and several liability, are controls and limits put in place to manage a program. For example, the group administrator periodically visits all members to ensure that they are providing safe and healthy workplaces to minimize on-the-job claims and injuries. Our company, CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. , assigns Individuals to whom property is, will, or may be transferred by conveyance, will, Descent and Distribution, or statute; assignees.
The term assigns is often found in deeds; for example, "heirs, administrators, and assigns to denote the assignable nature of designated certified safety professionals The Certified Safety Professional (CSP) is a certification offered in the United States by the Board of Certified Safety Professionals (BCSP). The CSP has been accredited in the United States by the National Commission for Certifying Agencies and the Council of Engineering and Scientific who perform annual group member site visits to assess safety programs, provide safety and training action plans, and follow up to ensure that high standards are maintained. CRM also provides a group safety report card program to assure aggregate group compliance. In general, members are encouraged to keep a clean safety record which, in turn, limits claims, keeps premiums in line, and supports the group's overall financial well-being.
Based on my experience with the Healthcare Industry Self Insurance Program (HISIP) of California, one of five programs we administer, I believe that being part of a group self-insured program is an effective means for nursing home operators and other healthcare providers to realize long-term savings. There are several reasons for this besides improved safety procedures. Because HISIP is not required to use rates charged by all insurance companies--rates are based on the experience of the members--HISIP can offer savings over traditional insurance products. HISIP members own 100% of group surplus, including interest income on every premium dollar paid into the fund. Loss-control services and products that are not easily found in the standard insurance market are also available.
HISIP and the other groups each maintain a board of trustees board of trustees Politics The posse of thugs who oversee an institution's administration. See Board of directors. composed of group members. CRM provides regular claims activity and financial reports to these boards and advises members on appropriate action, if needed. Through monthly reviews of loss and financial data, the trustees monitor their financial position in a more timely fashion than one would normally expect from a standard insurance carrier.
Finding workers' compensation insurance is becoming increasingly difficult and expensive for employers. I believe group self-insurance provides the opportunity for savings, stability, and the ownership of surplus dollars through innovative products and solutions to help companies solve the complexities of this mandatory insurance product.
Ari Baer is Accounts Manager for CA Healthcare Workers' Compensation Group, a full-service program agent for approved self-funded workers' compensation insurance programs based in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. . For further information, phone (323) 934-8160 or visit www.groupworkcomp.com. To send your comments to the author and editors, please e-mail firstname.lastname@example.org. To order reprints in quantities of 100 or more, call (866) 377-6454.