Workers Compensation Solutions for Healthcare Organizations
Healthcare organizations – from nursing homes and assisted living facilities to healthcare facilities – are always looking for ways in which to reduce their Workers Compensation costs. That’s because injuries to healthcare workers represent one of the costliest risks for this industry. According to the American Society of Safety Engineers (ASSE) the healthcare industry has more on-the-job injuries than most professions. Hundreds of thousands of lost-time injuries cost the industry $13.1 billion and over two million workdays in 2011. The breakdown of injuries is as follows: hospital worker injuries cost more than $6.1 billion, nursing and residential care worker injuries cost $4.8 billion and ambulatory health worker injuries cost $2.1 billion.
To help reduce Workers Comp costs, there are number of key strategies that should be implemented, including working with the staff to prevent claims from occurring in the first place; managing claims that do occur to promote faster return to work; and securing an insurance program designed to balance coverage, limits, retained risks and third-party administration (TPA) expenditures. These strategies will promote a safer work environment and more productive workforce while helping to reduce costs.
In addition, there are alternative, innovative solutions available to the guaranteed cost Workers Compensation program typically in place at many organizations. These solutions can provide cost savings for an insured. Whether they are right for a specific client will depend on the size and scope of the organization, its risk profile and risk appetite. Alternative Workers Comp solutions include:
- Large Deductible Programs in which a fixed administrative and excess premium is charged upfront with the client billed for all paid losses up to the deductible threshold. An escrow account for paid losses is typically set up and collateral in the form of a letter of credit is usually required for the expected losses.
- Self-Insurance Programs in which a formal arrangement is filed and approved by state Workers’ Compensation boards. The organization retains a specific amount of each loss on a per-accident/aggregate basis and buys excess insurance for coverage over the retained amount.
- Single Parent, where the organization assumes part or all of the risk associated with the Workers Compensation exposure. The program is often fronted on a guaranteed-cost basis with a stated per-accident/aggregate loss amount assumed by the organization’s captive insurer. A company can operate its own insurance division to maintain complete control over the captive, but a Third-Party Administrator (TPA) must be employed for claims management.
- Rent-A-Captive, which is owned by an organization that is not one of the insureds. These captives can be run by a broker, a reinsurer, or, more commonly, by a fronting insurance carrier. The fees for this type of captive are usually much lower than the initial capital required to start a single owner captive.
With these programs, healthcare organizations have the opportunity to control their overall Workers Compensation costs. Caitlin-Morgan can review the solutions with you in more detail to determine what type of strategy would work best for your client. In addition, we can provide you with loss prevention claim management services to provide an effective, comprehensive risk management program for your insureds. For more information about our Workers Compensation solutions for healthcare organizations, give us a call at: 877.226.1027.