In September the Safety, Rehabilitation and Compensation Commission granted self insurance licenses to Medibank Private Limited and Medicare Health Solutions Pty Ltd. The moratorium on private sector employers seeking a self insurance license under the Comcare scheme to achieve national consistency was lifted some months ago. It had been in place since December 2007.
Besides uniform workers’ compensation benefit for employees no matter what state they are employed in, there may be significant claim cost savings. Other advantages could include corporate tailored claim management and return to work programs, and a simplified regulatory environment rather than separate burning cost or premium paying arrangements in each state and territory scheme.
Naturally, the employer does need to be a certain size to make self insurance viable. It’s not just the investment in systems and resources to operate the self insurance licence, but the stability of the aggregate claim costs that emerge. NetActuary can assist in this evaluation by modelling the inherent variability of the program under consideration.
The program would need to meet the requirements of the legislation in respect of financial capacity, standard of claims management, and not being contrary to the interests of the employees. Also, the private sector employer needs to be one of those who are eligible for Comcare coverage. In the past, licenses have been granted if only part of the business met the eligibility provisions. A couple of dozen licenses have been granted. There are many times this number of single state self insurers.
Whether you are considering self insurance, already have a license or operate under some other arrangement such as a burning cost policy, NetActuary can assist with claims analysis with a view to understanding cost drivers and improving claims experience. Please don’t hesitate to contact Brian Bendzulla on (03)6223 2320 should you wish to discuss this blog.
The NetActuary Team