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| $32,000 BACK ON AUDIT |
$43,538 SAVED THROUGH AGENT |
Insured: School for “Exceptional Children”
(autism, down syndrome, etc.); 300 employees; safety committee 19
staff members
Situation: 1.88 experience mod, 300%
loss ratio, which means the insurance company paid out to doctors,
pharmacies, and other medical providers three times more than the
premium paid to the insurance company by the School. Based on that
ugly statistic, the insurance company would not insure the employer
any more. The School also had a 45 year relationship with its current
agent.
Assessment: Claims related to interaction
with the children when they have an episode. Most were soft tissue
injuries. There was no return to work program and the safety committee
did not have a list of transitional duty jobs.
Solution: Using Job Bank Worksheets each
department developed a list of jobs that could be done, if there
were an extra person in the department. The lists are maintained
in the HR/Finance Department. When an employee is on light duty
they report to that department to get their assignment.
Result: Mod projection for coming year:
1.27; School received $32,000 because WorkComp Advisor discovered
and corrected errors on the audit. With that money they distributed
a $150 holiday bonus to all employees. A very happy new client with
more committed employees.
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Insured: Two Minor League Professional Baseball
Teams
Situation: Very high rates. The seasonality
of the sport and the very low wages players receive relative to
national averages acts as a deterrent for players to return to work,
particularly when the injury is late in the season and players do
not return to work until the next season.
Assessment: Putting the IWCP education
to work, it was realized that it would be more beneficial to continue
to pay the wages and provide light or transitional duty for the
players. The wages were relatively low and the savings in WorkComp
costs would more than offset the costs.
Solution: A transitional/light duty program
was set up.
Result: By taking advantage of a certain
rule in the rule book, WorkComp Advisor was able to reduce the costs
to the teams by $43,548 and $39,109 respectively.
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| Mod Cut 44%, savings over $200,000 |
REVIEW OF EXPERIENCE MOD
SAVES OVER $25,000 |
Insured: A non-profit outpatient, long-term care
provider with a $20 million payroll for 512 employees spread over
nine locations.The company assists elderly clients so that they are
able to remain at home by either picking them up from their homes
each day and bringing them to day-centers, or providing in-home nursing
care when necessary. They also coordinate and transport clients to
medical appointments.
Situation: The employer had a mod of 1.71. The staff
was classified in eight different class codes, losses were three times
higher than expected and the premium was $321,734.
Assessment: Certified WorkComp Advisors (CWCAs) reviewed
the client’s WorkComp program. They found the employees were
incorrectly classed by the previous agent – who was not a certified
advisor – and their auditor had “found no exposure”
for the office class code when in fact close to $4 million of the
insured’s payroll was strictly office personnel. Internally,
the company’s deductible was too low and there were no loss
prevention, safety or back to work programs in place.
Solution: Several solutions were needed and implemented.
First, the CWCA proposed a $1,000 deductible, to which the client
agreed. Then the NCCI was called in to perform a classification audit,
first for the current policy year and then for the two previous years.
Next, safety specialists were brought in to assess the business and
the Institute’s program, “HR That Works,” was implemented.
Safety programs including Shoes For Crews – a non-slip shoe
program that reimburses the policyholder for the first $5,000 of a
claim if the worker slips while wearing the shoes – were established
for all their drivers. A dedicated WorkComp point person was identified
and that person now holds quarterly claims meetings with the adjuster,
the designated provider, and the CWCA.
Result: The deductible increase immediately eliminated
75% of their losses from the reportable losses for the mod calculation.
The class audit conducted by NCCI for the current year reduced the
number of classes from eight to three and reduced the mod from 1.71
to 1.24. When the previous two years were audited, that was further
reduced to 1.11 and the client received back premiums. In January
2005, the insured renewed their policy with a 0.96 mod. Despite the
fact that the payroll had increased to over $20 million from just
$12 million the year before, the new premium was $337,114. Had they
renewed this year with that large of an increase in payroll and a
mod of 1.71, the premium would have been $587,846. That represents
a savings of $250,732! |
Insured: A family-owned building contractor
with 15 employees that did $2,000,000 in business in 2004. The contracting
company is one of several businesses owned by individual members
of the same family.
Situation: Experience Modification Factor
jumped, for no obvious reason, from 0.99 for 2004-05 to 1.27 for
the current year. The insured decided it was time to re-evaluate
his WorkComp policy.
Assessment: After speaking with the insured
to obtain a better understanding of the operation, a Certified WorkComp
Advisor (CWCA) performed a basic review and developed a projected
Experience Modification Factor. He then compared the contractor’s
2005-2006 Experience Modification worksheet from the Workers Compensation
Insurance Rating Bureau (WCIRB) to his projection. The comparison
revealed a startling discrepancy.
Solution: After examining the discrepancy,
it was determined that the WCIRB had been co-mingling statistical
data from a company owned by another family member with that of
the building contractor. Correspondence was initiated with the WCIRB
identifying the separate and non-combinable ownership of the companies
and offering the CWCA’s projections of what the corrected
experience modifications should be.
Result: The WCIRB agreed with the CWCA’s
findings. It adjusted the contractor’s Experience Modification
Factor for 2005-06 from 1.27 to .87, which resulted in the employer
saving $9,343 on its WorkComp premium. It was also discovered that
the Board had made the same error in the previous year, so it also
retroactively adjusted the 2004-05 Experience Modification Factor
from .99 to .85, which resulted in another savings of $15,689. The
total WorkComp premium savings for the insured came to $25,032.
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