Self-Insurance

For an injury in 2013, resulting in death, reasonable expenses of the employee's burial are allowed up to

$10,000

A self insured employer has denied a claim but the file does not properly document the reason for the denial. What is the amount of the penalty?

$5,000

You are applying fora master certificate after July 1, 1994. What is the amount of net worth and net income needed to qualify for self-insurance?

$5,000,000 net worth and average net income for the past 5 years of at least $500,000

Application filing for Certificate of Consent to Self-Insure (private)

(1) $500 filing fee (2) if filed to replace interim and is in effect, $400 (3) $100 filing fee for each requests for interim cert - no application filing fee for public entity

Public self insurer or Public self insured employer

(1) county, city, school district, special purpose district, joint powers authority or municipal corporation which as applied and rcvd approval to be self insured by OSIP (2) sub-agency of public agency...rcvd approval by OSIP

Qualifications for interm certificate

(1) net work last financial report filed with manager shows at least $10 million net worth (2) private self insurer holding the master has furnished proof satisfactory financial responsibility, guarantee compensation payment

Affiliate Certificate

(1) private self-insurer that has common ownership to another private self insurer holding master certificate to self-insure (2) certificate to self insure issued to public self-insurer, member of joint powers authority (3) type of certificate issued to private self-insurer member of a group of self insurer

Reinstatement of certificate of consent to self-insure

(a) if terminated due to legal change in business or corporate structure and can re-qualify for self-insurance (b) statement that applicant assumes and guarantees WC liabilities during prior period of self insurance and any incurred after termination of certificate

How long does self-insurance plans have to notify you that your application for self-insurance is deficient

- private: 45 days - public: 30 days *old version = 14 days

Administrative director

Admin director of DWC within Dept of Industrial Relations - day to day management of ER's self-insurance workers' compensation program - makes and reviews decisions relating to furnishing of WC benefits, maintains self-insurer's claim records

What is the penalty for a failure to timely or completely pay an assessment?

An amount up to the assessment or $2,500, whichever is less for every 30 days

A medical only claim is

An injury which no compensable lost time but results in medical treatment beyond first aid

Trustees

Board of Trustees of Self-Insurers' Security Fund

The Director may not accept as a deposit to secure incurred liabilities for the payment of compensation and the performance of obligations of a self-insured employer: a. cash b. securities c. surety bonds d. Certificate of Deposit

Certificate of Deposite

Chief

Chief in Office of Self-Insurance Plans (OSIP) in Department of Industrial Relations (DIR)

You have assumed the responsibilities of another TPA. While auditing the files you discover that there are missing indemnity files. You should:

Contact the prior administrator and inform the employer

Audit

Exam of self insured WC claim files performed or at request of OSIP

What provisions of this division would normally apply?

Exclusive remedy (LC 3602)

As a self-insured administrator, how long do you have to maintain the claims file?

Five years from the date of injury or the date on which the last provision of compensation benefits occurred, whichever is later

When is a proof of service necessary?

For a Notice Denying Liability only

Board of Trustees

Group self insurance, rep body responsible for managing assets and directing affairs of the group self insurer corporation

As an out-of-state self-insurer where must the claims files be kept and maintained?

In California unless the Manager has given written approval to administer from a location outside of California

Certificate to self insure

Issued to ER 3700 (b) LC

You are a private self insurer granted a Certificate to Self-Insure prior to July 1, 1994. What is the amount of net worth and net income needed to continue to self-insure?

Maintain net work of at least $2,200,000 and an average net income for the preceding 5 years of at least $300,000

Manager

Manager at Office of Self-Insurance Plans, same as Chief

Every self-insurer must file a Self-Insurer's Annual report on or before:

March 1 for private self-insurers and October 1 for public self-insurers

Adjusting location

Office address designated where admin fulfills function Telecommuting adjuster considered separate adjusting location for reporting and audit unless reports to CA location no less than weekly

You fail to notify the excess carrier of a claim. The excess carrier may?

Refuse to pay the claim

Security fund

Self Insurer's Security fund (LC3742)

When a self-insured certificate has been revoked, the Director retains jurisdiction for what period of time:

Until claim liability has been exhausted pursuant to the law

When can you close a claims file?

When all benefits that are due and payable have been paid

When can the employer request a second opinion under Labor Code 4062 (b)?

Where there is a dispute about the need for spinal surgery.

Exoneration of surety bond

discharge of surety from all past, present, and future liability under WC...issued by chief

Reapplication to the Director for a Certificate of Consent to Self-Insure is required if an employer:

fails to initiate a self-insurance program within six months

The employer has an aggregate stop loss excess insurance policy. It is

legal but the employer receives no credit against the security deposit

Claim log

manual or electronic listing of WC claims. shall list each work injury claim by calendar year in which claim was reported to ER or claims administrator, whichever DOK is first

Qualified actuary

minimum standards of experience, certification, licensure, insurance, and qualifications

Administrative agency

person or firm that performs day to day claims admin. can also pertain to: 1. independent contractor with certificate to adjust 2. partnership or corp with master certificate 3. joint powers authority to self-insure 4. claims dept of insurance carrier

Private self-insurer

private ER which has secured the payment of compensation pursuant to LC3701

Member

private self-insurer which participates in the Self-Insurers' Security Fund

Joint powers authority

public entity created by agreement of two or more public agencies...forming of WC liability pooling arrangements

Alternative Composite Deposit

security deposit system whereby all eligible private self insurers collectively secure WC through Self-Insurer's Security Fund

Claim file

separate case file containing all pertinent docs to WC

Incurred liabilities for the payment of compensation

sum of an estimate of future compensation, as compensation is defined by Section 3207, plus an estimate of the amount necessary to provide for the administration of claims, incl legal costs

Cancellation of surety bond

terminating contractual obligations under named bond and liability of surety bond

Interim Certificate

to a subsidiary or affiliate of existing private individual self insurer or existing public agency self insurer. Issued for period not to exceed 180 days, manager may extend up to 90 days

Subsidiary certificate

type of certificate to self insure issued to a subsidiary of a self-insurer, self insurer holds master

If the Director of Industrial Relations determines that a private self-insured employer has failed to pay required workers' compensation benefits, s/he may:

utilize the self-insured's security deposit and pay the employer's compensation obligations

Once an employer has initiated a self-insurance program, the employer's Certificate to Self-Insure is

valid until revoked by the Director

Assessment funds authorized by Labor Code

1. Workers Compensation Administration Resolving Fund (WCARF) 2. Uninsured Employers Benefits Trust Fund (UEBTF) 3. Subsequent Injuries Benefits Trust Fund (SIPTF) 4. Occupational Health and Safety Fund (OSHA) 5. Labor Enforcement and Compliance Fund (LECF) 6. Workers' Compensation Fraud Account (FRAUD)

What is the penalty for failure to deposit and maintain a security deposit?

10% of increase not timely filed or up to $5,000, whichever is less for every 30 days

Failure to secure payment of compensation results in

1st strike: a misdemeanor punishable by imprisonment in the county jail for up to one year, or by a fine of up to double the amount of premium, not less than $10,000 2nd strike: imprisonment up to 1 year, fine triple amount of premium, not less than $50,000

A self insured employer has not adequately funded their trust account, preventing you from making payments on claims. You are required to report it to the Manager within:

3 days

What is the penalty for failure to file a complete or timely annual report?

5% incurred liabilities or $1500, whichever is less for each 30 days or portion thereof which there is a failure

To whom do you apply for a Certificate of Consent to Self-Insure?

Director of Industrial Relations, LC3702

What does not have to be included in the claim log?

Social security number

You do not have to notify the Manager of a change in status where a. the self-insurer proposes to cease doing business in California b. the self-insurer changes ownership c. the self-insurer has a change in minority shareholders d. the self-insurer has a material change in management

The self-insurer has a change in minority shareholders

An injury occurs in late December but is not reported until January of the next year. In which Claim Log is the injury recorded?

The year in which it was reported *if public, it will be the fiscal year in which it was reported

If the DIR determines that a private self-insured ER has failed to pay required WC benefits, s/he may: 1. Utilize the self-insured security deposit if the self-insurers' security fund refuses to pay compensation benefits 2. Utilize the self-insured's security deposit to administer and pay ER's compensation obligations 3. Refer the issue of non-payment of benefits to the WCAB 4. Refer the issue of non-payment of benefits to the Superior Court for a Writ of Mandate

Utilize the self-insured's security deposit to administer and pay ER's compensation obligations

Are medical only claims included on the Annual Report?

Yes, but only for the reporting year of the annual report

What are assessments?

a. LC Sections 62.5 and 62.6 authorize the Dept of Industrial Relations to assess ERs for costs of administration of workers' compensation b. Assessments provide stable funding source to resolve claims more quickly, assure safe and healthy working conditions to prevent injuries, to ensure enforcement of minimal labor standards, and improve overall operation of the system

Types of excess insurance

a. specific excess insurance b. aggregate excess insurance (stop loss)

Release of surety bond

action of chief of self insurance plans, does not constitute part of security deposit

Core Group Member

affiliate member of a group self-insurer as defined by subsection (v)....

Contribution

amount of payments required of each group member to fund compensation and deposit obligations of group self insurer

You fail to notify the excess carrier of a claim. Which entity can impose a penalty? a. The Administrative Director b. The excess carrier c. The Manager of Self Insurance Plans d. The Self-Insurer's Security Fund

b. the excess carrier

Actuarial summary

by same actuary who did actuarial study, filed with Office of Self-Insurance Plans

Certificate to administer

certificate of consent to administer self insured workers' comp claims issued to administrative agency

Actuarial Study

complete actuarial study prepared by qualified actuary presenting full and complete results of...requirements for self-insurers or self-insured groups. attached to actuarial summary