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Companies band together to cut workers' comp costs
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In the six years that he’s owned Steve’s Plumbing and Hardware in Ventura, Dennis Stanley has not had to file a single workers’ compensation insurance claim to cover an employee injury.
Still, the cost of the required coverage inched up often, Stanley said, usually without explanation.
Fed up, Stanley opted for a change late last year, dropping his large insurance company’s policy to join a self-insured group of small, independent retailers like himself. He’s already paying a little less, and in a year or two he should be saving even more.
“I’m not saving a huge amount, but like I say, what I hope to recoup is the benefit of getting something back,” Stanley said. “Part of your premiums are repaid to you over time if you stay in it (the insurance fund) and it continues to grow.”
Ojai Lumber made the same change at the start of 2008. Richard McArthur, the store’s manager, estimated he’s paying nearly 20 percent less than what the giant State Compensation Fund charged to cover his 12 employees. More important to him, however, is that the self-insured group does a better job of handling claims and getting injured workers back to work more quickly, he said.
“We sometimes had to wait months to get someone cleared to go back on the job,” McArthur said.
The two Ventura County retailers are among 110 members statewide of the Home Improvement Self-Insured Group, an organization of small- to medium-sized lumber yards and hardware retailers working to provide more efficient, less costly workers’ comp coverage to members.
California has 26 self-insured business groups so far, and membership is growing rapidly. Nearly 400 businesses opted for self-insurance last year, a trend noted for five years, said James Ware, chief of the state’s Office of Self Insurance Plans, which regulates the groups for the Department of Industrial Relations.
Like traditional insurance companies, self-insured groups must comply with myriad state regulations that include underwriting, which sets annual premiums and standards based on closely monitored actuarial studies, said Jim Scanlon, CEO of Scanlon Guerra Burke Insurance Brokers. The Woodland Hills-based company is senior broker for the Home Improvement Self-Insured Group. Injury claims are processed by independent claims administrators.
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Source: Ventura County Star
By: Jim McLain
