Now You Have Loss Run Online Access-What Do You Do Now

You have online access or you have all of the loss runs - what do you do now?

You will mainly be concerned with just the reserving part of the claim for now. One of the important points to remember is that with a Workers Comp loss run review, you cannot really question what has happened in the past, especially on closed claims. The Total Incurred for a closed claim is the amount paid. There is not much you can do once a bill or settlement has been paid. That is why it is important that Loss Run Reviews are performed quarterly or monthly.

Do you have an email sent to you if reserves reach a certain level or if a massive bill/settlement is being considered? If not, you are leaving an open checkbook against your E-Mod.

Without a claims technical background, common sense is the rule for doing loss run reviews. Take a look at the open claims.

• Does the amount for reserves (Total Incurred minus Paid) look right?
• Has the claim that was once a more serious claim now resolved itself?
• Is the employee back to work?
• Do you have an employee on your loss run that is not one of your employees?
• The list goes on and on for areas to possibly find mistakes in a Workers Comp claims reserve/loss run review.

If you feel that there is still something wrong after doing a self-review, you may want to contact a Workers Comp claims review expert.

Shameless plug - Claims reviews and especially online claims reviews are our specialty along with premium audits.

Up Next - What to Look For in a Work Comp Claims Review Expert

Work Comp Loss Run Reviews (Getting Online Access)

Obtain a copy of your current Workers Comp loss run for all claims less than 5 years old. If you have online access, that will help greatly. If not, check with your current and past carriers to see if you can access your claims online.

Ask for access to all notes, reserve increases, supervisory reviews, and any data that was input at the time of the First Report of Injury. Ask for as many User IDs and passwords that are needed for your company. We have seen where 10 people were having to take turns using one User ID. There are security concerns, but if your company is large enough there should be more accessibility than one User ID.

If you do not have online claims access, you will likely have to email the adjuster to get statuses, etc. It is advisable that you do a quick review before emailing the Workers Comp Adjuster. I do not recommend emailing for a status on every claim. See the next post for more info.


Next Up - You have online access or you have all of the loss runs - what do you do now?

Worst Case Scenario

These words send chills through me like no others in anything that deals with Workers' Comp. I did not like to say them when I was an adjuster long ago, and I do not like to hear them now.

Worst Case Scenario has to do with the reserving on your Workers Comp claims. In my last post I pointed out that 16 East Coast hurricanes were originally forecasted for 2006 by one of the large Risk Management companies. That was the Worst Case Scenario. Companies were charged property premiums as if the end of the world was going to occur in 2006. The premiums have been reduced some by the later forecasts of very few storms.

However, in Workers Comp, worst case scenario seems to be the norm for every claim. How do you know if your company is being reserved at and charged for the worst case scenario on your Workers Compensation claims? That is coming in the next posting.

Up Next - Loss Run Reviews

A List of Red Flags That You May be Overpaying Workers Comp Premiums

You will need to think back over the last five years on your Workers Comp insurance for all of the following:

• Has your company experienced significant increases in Workers’ Compensation premiums?
• Has your company incurred charges for uninsured subcontractors or owner-operators?
• Has your insurance company included in your payroll any owner-operator expenses?
• Do your Classification Codes include “all employees” or “not otherwise classified” (NOC)?
• Has your company changed ownership or business operations?
• Has your company experienced a merger or expansion into other states?
• Has your company left a relationship with an Employee Leasing Company or a PEO?

Has your insurance company, NCCI, or State Rating Bureau changed, omitted, or added..

• Classification Rates?
• Classifications Codes?
• Experience Modification Factor?
• Payrolls?

Were your Insurance Company’s Workers’ Compensation Audits ……

• More than 120 days after the Policy Expiration Date?
• Conducted via telephone?
• Conducted using 941’s or state unemployment forms?

Did the Workers’ Compensation Auditor………

• Not leave a copy of his or her Worksheets?
• Ask very few questions?
• Examine very few records?
• Is your payroll audit always brief and superficial?

Some other areas that are Red Flags:

• Has the NCCI or your states’ rating bureau responded to a question or complaint unfavorably?
• Has your policy’s modifier been labeled as either “contingent” or “preliminary”?
• Has an endorsement increased the modifier after the policy began?
• Has your policy been frequently endorsed with changes to classification, rates, or payrolls?
• Are your employees paid a significant amount of overtime?

There are may other Red Flags. The above ones are the most common that we see when an employer is overpaying their Workers Comp premiums. Think back over the last five years. If some of these have happened to your company, you likely are overpaying for your Work Comp coverage.

Next Up - Worst Case Scenario - Remember When There Were 16 Hurricanes Forecasted for the East Coast for 2006?

A January 1 Renewal Date Can Cost you $ On Your Workers Comp Premium

This is one of the easiest ways possible to reduce your Work Comp premium. Renewing your policy on January 1st is akin to shopping on Christmas Eve or getting a tax professional's help the week of April 15th.

You may find a gift on Dec 24th or you may find tax help on April 14th, but you may not get the service you deserve as the merchants or tax professionals are overloaded at certain times of the year. It is the same with your Workers Compensation policy.

The majority of policies renew on January 1. Agents, underwriters, in fact, every department is completely overloaded then. If we have any issues where we need to contact an agent, we try to avoid between today (12/10) and the end of the year. Everyone suffers, but who pays the bill for the possible inattention? Of course, it is the policyholder. You are lumped in with most of the policyholders. In tracking our clients' files, we find that 60% of them renew on 1/1. Why not use one of the 364 other days to give your agent and carrier time to spend on your policy?

We recommend in all our presentations and to our clients to also avoid July 1, when most of the public entities renew. In fact we recommend renewing in the middle of the month if at all possible, and if your budget allows this to occur.

Strange, but true................

Up Next - A List of Red Flags that You May be Overpaying on your Workers Comp. This is one of our most requested Workers Comp documents.

Item From The Workers Comp News

I ran across an interesting article recently about one of the states that we have had quite a few clients in - West Virginia. Some of the legislators there still seem to want to have an oversight committee on Workers Comp, namely the Workers Compensation changeover from Brickstreet as the monopolistic carrier to a full open market on July 1, 2008.

As I was quoted in the Charleston WV Daily Mail, any type of "fine-tuning" to the open market would greatly and most likely negatively impact the introduction of the open market. Governor Manchin would likely veto any such legislation.

There exists already an "oversight committee" of sorts in WV as in most states. That is the Department of Insurance, headed by Commissioner Jane Cline. What a Department of Insurance does is to be the overseer of the insurance programs in their respective state. Commissioner Cline and her department has and will do a fine job in that role.

In my opinion, amplifying the problems that were encountered with Brickstreet as an expectation of how the general Workers Compensation market would function is not going to help solve the problems that existed even before Brickstreet, of which there were many.

I have been informed there is another West Virginia Work Comp Insurance Conference coming up in Charleston, WV in April of 2008. That should be an interesting conference.

If you have any questions about WV Workers Comp or any other Workers Comp matter, please visit our main website at http://www.cutcompcosts.com/ or email me at jmoore@cutcompcosts.com

Next Up - Why Having a January 1 Renewal Date on Your Workers Comp policy is Costing you extra $$$.

Questions From A Workers Comp Agent

Do your services replicate what I do as an agent?

• Will your services make me look bad in front of my client(s)?

The answers are No to the first question and an emphatic NO to the second.

Our largest section of business comes from agent referrals. At one time, 70% of our business was due to agent referrals. While we do have the same goals as a Workers Comp insurance agent, we are able to "drill down" further into a company's policies as we spend a large amount of time with each client's data. We are not under the time pressures that agents are under when writing a policy for an employer.

We have never tried to discredit an agent or to question what an agent has done for an employer. In fact, one of my first bullet points in all my presentation is "Do Not Blame Your Agent." An agent has to work within the structure that has been built by the Workers Compensation Underwriter, insurance commission, NCCI/State Rating Bureau, general marketplace, etc.

Agents drive the market for all of Workers Comp. If there were no agents, there would be no marketplace, and all states would operate under a monopolistic form of insurance, which has been shown to not be the best for employers.

Next Up - Work Comp Items from the News

The #1 Question on Workers Comp From Our Readers

Q: I have just received an audit billing of $47,500 from our Workers Compensation policy from last year. What do I do now? My total premium for last year was $93,000. The bill is for over 50% of what I paid last year.

A:

1. Do not just pay the bill. Do not just write a check and assume it is a part of doing business. Once you write the premium audit billing check, you have lost a large amount of leverage.
2. Ask for a full breakdown of the premium billing and why it changed.
3. If it was due to tremendous growth by your company and payrolls spiked, you likely owe it, but just make sure you understand where the increased figures all came from before writing the check.
4. If the premium audit bill was due to a major change to your policy, you should be very wary of what changed.
5. If you do not feel comfortable writing the check, please consult a premium audit specialist company. That, of course, is what we do every day.
6. You may have a deadline in the number of days to appeal the audit. Do not wait until the very last minute, as there may be penalties for not responding if you question the payroll audit. Always use certified return receipt mail if you decide to launch a dispute.
7. Along with #6, do not call or email for premium audit help if the deadline to pay or dispute the audit is in a few days.
8. Do not just dispute the premium audit bill because you think it is just too expensive. You must have some basis for your dispute. Remember, this is the same agent and workers comp insurance carrier that you will have to deal with next year.

#1 - #8 from above is why we say "Stop just writing checks."

Up Next - We answer a question from an agent.