Best practices for self insurers becoming self insured
Self insurance is a privilege that must be earned, not a right of every employer. Employers in Georgia have the privilege to become self insured if they meet the following qualifications:
- Financial solvency - must provide certified audited financial reports to prove the company can meet the financial obligations of self insurance
- Application to the Self Insurers Guarantee Trust Fund and the State Board of Workers' Compensation. Application fee is $500. (non refundable)
- Must pay an initial assessment of $4000 and annual assessments of $1000 - $4000 based upon annual losses
- Provide security deposits to secure future claims in the case of insolvency. The security may be: Irrevocable letter of credit or Surety Bond
- Security may be claimed by the Self Insurers Guarantee Trust Fund in cases of insolvency. The security will be used to pay workers compensation obligations of an insolvent member of the fund.
Companies who self insure must be committed to long term self insurance
If properly managed, companies may:
- Improve control of workers compensation claims
- Reduce overall cost of workers compensation claims
- Improve relations with injured employees
- Gain more enthusiastic support of safety efforts
Recommended Thresholds for Self Insurance
Acceptance is made on a case-by-case basis after a thorough review. The following are recommended qualifications. All applications will be considered.
General Guidelines
- 150 or more employees
- $250,000 or greater workers compensation premium
- $1,500,000 annual payroll
- Financial solvency
- Viable safety program
Reasons to Consider Self Insurance
- Dissatisfaction with insurance company performance
- Increased control of claims process
- Reduce cost of workers compensation
- Employee dissatisfaction with claim handlers of insurance companies
- More direct contact with injured employees
- Improved cash flow
Requirements for Self Insurance
- Must have operations in Georgia
- Must be financially solvent
- Audited financial reports
- Security provisions
- Commitment to long term self insurance
- Application to self insurers Guarantee Trust Fund and the State Board of Workers Compensation
- Establish appropriate claims organization, i.e. TPA or self administration
- Commitment to timely payment of benefits
- Compliance with the Georgia workers compensation law
Claims Administration
- Decide whether claims will be administered internally or externally
- If claims are to be handled internally, ensure that staff is qualified and equipped for the job
- Third party administrators (TPA) are available to provide claims handling services for a fee
- Most companies should enter the self Insurance experience with the help of a reputable TPA
- Establish and fund bank accounts to assure that checks will be honored
- File reports with the State Board of Workers' Compensation in a timely manner
- Benefits payments must be made in accordance with the Georgia workers' compensation laws
- Benefit payments must be drawn on a Georgia depository
Self insured companies should become members of GWCA
We provide services in the following areas:
- Legislative Advocacy
- Educational Seminars
- Case Law Reviews
- Workers Compensation
- New Member Information
Medical Treatment
- Employers should provide the best medical treatment available for their injured employees
- Employers may utilize a panel of physicians, a conformed panel, or an approved medical care organization (MCO)
- Panel of Physicians - Must consist of at least four qualified physicians. The Panel must include one Orthopedic Surgeon, a Minority Physician, and two other properly qualified physicians. No more than two may be Industrial Clinics. Employees must chose a physician from the panel for treatment of their Workers' Compensation injury. Employees may make one change of physicians from the panel without approval. Some employers believe the Panel of Physicians provides more control of the medical treatment because of the restrictions on the number of Physicians
- Conformed Panel - Must include at least ten physicians. Employees may make one change. This is considered a compromise for employers who are not satisfied with the Panel of Physicians and are not ready for the use of an MCO
- MCO - Must be approved by the State Board of Workers Compensation. MCO's offer a much larger choice of treating physicians from many disciplines. Employees may make one change within the MCO.
Take a look at our Employer Members and Associate Members and let GWCA begin working for you. Join us!
