Can I Control My Experience Mod Part 4

So far in this series we have talked about correctly setting up your workers' compensation policy to reflect real exposure, controlling medical costs with preferred company providers, and maximizing use of alternative duty.  Now we are on to the last part of the control of claims and their impact on the experience modification.

The injured employee is back at work, the policy has actually expired and renewed, and for the most part the incident is forgotten.  Except for the fact that there is a reserve still open for some reason.  Very often insurance companies are slow to reduce reserves on claims that for all intents and purposes seem to be done and over.

There are many reasons for this and I will not place blame on the insurance company for any of these.  The fact that reserves are tax deductible for the insurance company is usually the first item identified by the anti insurance company contingent when addressing this issue.  While it is a true statement, and artificially high reserves will lower tax obligations, it also affects the Profit & Loss statement.  It is a tricky issue and the main reasons a reserve is still open are usually much more basic.

A claims adjuster is not going to look at a claim every day.  They are going to set follow up reminders based on their best expectation of when it needs to be addressed.  That may not be on your schedule, and it may be arbitrarily long.  So a worker who has returned to work and probably requires no more medical treatment could be followed up on in 30, 60, or 90 days.  The adjuster may default to 90 just to make sure nothing has come up.  No ill will, just good time management.

Additionally, they may be waiting on information from a doctor.  Rather than bugging them every 30 days, they may put their reminder in for a greater length of time.  They also don't want to reduce the reserve while waiting and then have to raise it back up again based on new information.  That would reflect poorly on their job performance.

My point is, what is right for the insurance company at this point, may be negatively affecting your experience modification.  If the report to the NCCI is due on October 30th, and the adjuster follows up and reduces the reserve on Nov 1st, the reserve will reflect in the modification calculation.    You need to know when the report will be filed, and be proactive in trying to get claims closed and reserves reduced prior to that time.  

I would imagine that a last minute phone call to the adjuster would be received poorly, while constant communication during the claim would engender their support.  I hear from clients more than ever that adjusters aren't keeping them in the loop.  Heavy workloads, busy schedules, whatever the cause, it is a reality.  You need to be proactive and make the calls if you aren't hearing from the adjuster.

The ICRB has a schedule of reporting dates, based on the expiration date of the workers' compensation policy.  I advise you to maintain a copy and set your own reminder to discuss reserves with the adjuster and the help of your agent.

This concludes this series, but only in brief.  For further information and assistance, please contact me and I will be happy to spend some time in person going through effective management of the Experience Modification Factor.