Workers Compensation Rates for

1

• Workers Compensation Rates for
• Agencies
• Presented to ASTRA
• November 29, 2000

2
Workers Compensation Rates for Agencies

• Background
• Historical Paid Losses and Flat Rates
• Shift to Experienced Based Rates
• Legislation and Budget Indices
• Cost Allocation Factors
• Transition 2002 and Beyond
• Limiting Exposure

3
Background

• K.S.A. 44-575 established State Self-Insurance
  Fund
• Secretary of Administration determines annually
  the assessment rate for all state agencies
• Rate expressed as a percentage same for all
  agencies

4
Historical Paid Losses and Flat Rates

5
Shift to Experienced Based Rates

• Recognize WC experience (risk) differs among
  agencies
• Enhance loss control, e.g., accident prevention,
  reporting and early RTW
• Agency rating most common approach among states
• Reliable data history and actuarial support
• Auditors recommended
• Management can impact

6
Legislation and Budget Indices

• SB 219
• Effective 7/1/2000
• Amends K.S.A. 44-576
• Provides for agency assessment rates
• Budget Cost Indices
• FY 2001 Flat rate (.925)
• FY 2002 Transition year (mixed rate)
• FY 2003 Full experience rates

7
Cost Allocation Factors

• Agency paid losses
• Agency payroll
• Relative loss and payroll ratios

8
Cost Allocation Adjustments

• Three year history smoothens claims
• Claims capped at 25,000/claim
• Relative weighting assigned
• Agencies grouped in 5-10 rates

9
Transition 2002 and Beyond

• FY 2002
• Transition year
• 50/50 mix rate (flat/experience)
• FY 2003
• Experienced based rates fully implemented
• On Going
• Actuarial studies annually
• Modifications as needed
• Develop incentives/credits, e.g., RTW

10
Limiting Exposure

• Team approach
• Accident prevention and safety
• Early accident/claim reporting
• Return to work options
• Transitional positions
• Modified duty
• Communications and training
• Avoid litigation

11
Workers Compensation Rates for Agencies

• Presented to ASTRA
• November 29, 2000
• http//da.state.ks.us/ps/benefits.htm