There are many parties involved in the injury management process:
Your company is the employer. An employer can also be referred to as the “insured.”
Your insurance broker understands the risks of your company and obtains insurance to cover those risks in the event of a loss.
A broker reconciles problems between an insurance company and an employer. Some insurance brokers provide risk management services. These include:
- Loss Control
- Integrated Benefits
- RMIS (Risk Management Information Services) or Data
- Consulting and Workers’ Compensation Cost Containment Consulting Services.
Absorbs some of the financial risk of loss. Often referred to as the “carrier,” the “underwriter” or the “insurer.” All three terms mean the same thing.
Insurance is often referred to as “cover,” “coverage,” and “paper.”
In several states — North Dakota, Ohio, Washington, West Virginia and Wyoming –workers’ compensation is provided by the state itself through state funds. In three states (Ohio, Washington and West Virginia) an employer can obtain permission to self-insure or can purchase coverage through the state fund.
In most states, employers are permitted to self-insure provided they can meet applicable criteria. Many large employers have high deductible programs; although the employer pays the majority of each loss, this type of insurance arrangement is different than self-insurance because an insurance company “holds the paper.” There is more control over how their claims are handled if a company self-insures.
Third-Party Administrator (TPA) or Claims Handling Company
There are two types of claims handlers: Third -Party Administrators (TPAs) and insurance companies.
An insurance company has adjusters that handle claims. Independent companies also have adjusters to handle claims.
A TPA is an independent company that adjusts claims.
TPA’s focus on administering workers’ compensation benefits in accordance with state laws.
“Unbundling” occurs when an insurance company allows the employer to use a TPA.
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