Workers’ Compensation coverage provides wage replacement and medical benefits to employees injured on the job. Programs often include additional services like loss prevention training and equipment as well as back to work programs to help employee recovery and reduce overall costs.
Public entities typically have a choice of three types of Workers’ comp programs when purchasing coverage. Your broker can help you determine which type of program provides the best fit for your entity.
Self-Insured with Third-Party Administrator (TPA)
Public Entities with a large employee group and support staff may choose to self-insure (self-fund) for Workers’ Compensation claims and utilize a Third-Party Administrator to provide logistical support. TPAs typically provide the following services.
- Program design and management
- Risk management and loss prevention training
- Claims Administration with professional medical case management
- Return to work and wellness programs
- Stop loss insurance
Modified Self-Insured Workers’ Comp
Public entities do not have the size or in-house staff to manage their own self-insured program can still effectively self-insure for claims through a modified self-insured (MSI) program.
MSI programs are typically full-service Workers’ comp programs however, claims are funded by the public entity with a stop loss limit usually provided by the MSI program.
Modified Self-Insured programs incentivize public entities to utilize the program loss prevention services to reduce losses while providing a backstop in the form of stop loss coverage to reduce financial exposure from large claims.
Fully-Funded Workers’ Comp
Fully funded Workers’ Comp programs offer a turn-key program at a fixed annual premium. The benefit to the entity is that regardless of the dollar amount of claims, the district pays the same annual premium. While providing rate stability, entities are not able to benefit from cost savings if claims costs are reduced.