Workers compensation retrospective plan loss sensitive rating leads to a little known, but often skipped, essential step of verification.
For employers using workers compensation retrospective rating plans it is essential they have an independent review of claims conducted. Retrospective rating formulas and adjustments are heavily weighted by workers comp losses as adjusted and applied to the employers account by the insurance company administering the plan for the employer. Mistakes in the proper application, payment and settlement of claims by the insurer will have drastic effects on the adjustment premium employers pay.
We conservatively estimate 60%-70% of all workers compensation claims contain errors and overpayments that directly impact the adjustment premiums these employers pay. As a matter of fact it’s adverse claim settlements that lead to a great deal of employer/insurer litigation over retrospective rating plans.
Be sure to read more about workers comp retro plans at our website.
Lesson Learned: All employers using workers compensation retrospective rating plans should have independent claim reviews conducted an outside source to verify the accuracy and application of all claim payments made by the insurance carrier.