Claims costs = rates

1. EMPLOYEE OWNERSHIP CONFERENCEApril 16, 2004Christine WilliamsBWC Business ConsultantSafety: MISSION IMPOSSIBLE?

2. Claims costs = rates Claim frequency (number of claims you experience) and claim severity (cost of a claim) directly impacts premium rates.

3. Reserves The estimated value representing the insurer’s future financial liability on a particular claim at a specific point in time.

4. Discount programs • Premium Discount Program+ (PDP+) • Drug-Free Workplace Program (DFWP) • Drug-Free EZ Program (DF-EZ)

5. PDP+ Employer goal Rebate 15% claim severity reduction 10% premium rebate 15% claim frequency reduction 5% premium rebate Bonus for meeting both requirements 5% premium Total rebate: 20% premium

6. PDP+ • Employer implements BWC’s 10-Step Business Plan with assistance from a BWC employer services specialist. • 10% premium discount in years one and two • 5% premium discount in year three For accepted employers who submit a satisfactory action plan

7. Two drug-free programs • DFWP • DF-EZ (employers with 25 or fewer employees)

8. DFWP and DF-EZ Three levels of participation Level 1 = 10% discount Level 2 = 15% discount Level 3 = 20% discount

9. Bigger discounts for DF-EZ employers 15% claim severity reduction -10% premium rebate 15% claim frequency reduction - 5% premium rebate Bonus for both requirements - 5% premium rebate Total 20% premium rebate

10. Five components of a drug-free program Written policy Employee education Supervisor training Drug/alcohol testing Employee assistance

11. DFWP and DF-EZ Can stack discount with group rating (up to maximum of 95% discount Can stack discount with PDP+ for the July 1, 2003, and Jan. 1, 2004, program years

12. SafetyGRANT$ and DFWP/DF-EZ Private state-fund employer spends $5,000 and BWC matches up to $10,000. Public state-fund employer spends $5,000 and BWC matches up to $15,000.

13. Transitional WorkGRANT$ BWC will pay employers 80% of the development costs (up to a limit) to set up transitional work programs. The employer contracts with an accredited transitional work developer to qualify for Transitional WorkGRANT$.

14. Additional cost-control strategies Handicap reimbursement Salary continuation $1,000 medical-only program

15. Settlement • A settlement is an agreement between the employer, injured worker and BWC. • The injured worker is paid an agreed upon amount as a single payment. • The claim is closed and injured worker is unable to receive any further compensation (medical or indemnity) from the claim. • The reserve on a lost-time claim is reduced to zero, since no further costs can accrue.

16. Group rating This plan allows an employer with low claims experience to earn an attractive discount. Groups combine payroll and experience of the members to earn a significant discount. Discounts up to 95%

17. Retrospective rating: • Is a semi-self-insured program; • Employer selects: • an individual claim limit; • a maximum premium (ceiling of claim costs); • Employer receives up-front discount; • Employer is responsible for 10 years of claim costs up to a claim limit; • Employer must have minimum $25,000 annual premium to qualify;

18. Self-insurance • Large employers: 500+ employees • Pay assessments to BWC • Pay all of claim costs • BWC grants employers this privilege based on: • Profit margin; • Debt structure; • Self-insurance readiness.

19. Division of Safety & Hygiene • Safety consulting services • Safety program advice • Hazard assessment and control assistance • Safety culture/behavior change processes • Safety team/committee evaluation and design • Ergonomic consulting services • Industrial hygiene consulting services

20. Division of Safety & Hygiene • Safety & Hygiene library • Provides research to address specific questions • Video library • Publications covering safety issues • Training center • Safety councils