A large deductible workers compensation plan my help to lower insurance costs and increase cash flow for some businesses. Loss-sensitive plans, as they are also known, differ fundamentally from guaranteed cost plans in that they take loss experience into consideration during the term period. A workers compensation insurance broker can analyze a business to assess which approach offers the best coverage at the most affordable premiums.
Loss-sensitive insurance plans lower costs by having the insured assume greater risk in the event of losses. Employers must be willing to fully leverage loss control, claims, and medical and pharmacy management programs. Typically, the insured manages a loss fund to pay losses, which must be reimbursed as losses are paid. Once the insured has paid claims in the amount of the deductible, the insurer picks up the responsibility for costs over and above the deductible.
A Plan for Employers With Stable Risk
A workers compensation insurance broker is a good source to find out whether or not your business would benefit from a high deductible plan. It is necessary to analyze losses over a significant period of time to determine a loss average. Companies with consistent and generally predictable loss experiences are better positioned to take advantage of loss-sensitive plans than businesses with higher risk profiles. For employers with limited or low-risk operations, a high-deductible plan may be a smart solution controlling workers compensation costs.