ABC's Workers' Compensation Program Update
A Q & A with Pat Morrill, SAIF Corporation

Pat Morrill provided us with an update on the Agri-Business Council group Workers’ Compensation program. Pat is the Agency and Groups Program Coordinator at SAIF Corporation, and our primary contact for the ABC / SAIF insurance program.

Q. Pat, what is happening with our discount?
A. Each year the group’s discount is re-calculated by NCCI (the National Council on Compensation Insurance) and a new discount goes into effect on July 1. Back in July of 2008, the ABC discount went from 8% up to 13%. However, effective July 1, 2009 the new discount percent is dropping to 6%.

Q. That’s a substantial drop in the discount percentage. What happened?
A. The discount calculation is complex and has many components, so there isn’t a simple answer to this. The Oregon Group Supplemental Experience Rating Plan (OGSERP) is a supplemental experience rating formula for a group of employers (in this case the Agri-Business Council’s members who qualify for the group) and it provides an additional discount to members when their actual collective loss experience is better than what the expected experience would be. The group discount is similar to your own individual experience mod, in that you “earn” the experience based on several years of data. This data changes over time. For example, there were some serious claims back in the 2006 year that have become more expensive than originally expected. This has had a negative impact on the overall group results.

Q. So, does this go into effect all at once, or is it phased in?
A. The new group discount goes into effect as each policy comes up for renewal during the July 2009 through June 2010 period. Policies that renewed in the group on July 1 have the new discount at that time. But, if a member is not up for renewal until later in the year, they will keep the old discount percentage until their normal renewal date.

Q. What can our members do under these conditions to maximize the potential for future discounts?
A. Prevention of workplace injuries is the best way to maintain an OGSERP. We would encourage you to work with your SAIF safety consultant, OR-OSHA, or any other safety resource to prevent injuries. If an injury does occur, it is important to collaborate with your SAIF adjuster and return-to-work consultant on effective claims management. Providing modified work can be challenging in these economic times, but continues to be one of the best ways for employers to keep their costs down if an injury does occur. There are various monetary incentives (Employer at Injury Program with wage subsidy and worksite modification) that we can use to assist the ABC members.

Q. Anything else you would like to share with us?
A. Well, we do understand that this lower discount is a disappointment to group members. It is fairly normal for the discount to go up and down over time, because of the many factors that go into the discount calculation. Also, it’s important to understand that this calculation is not subject to the discretion of SAIF Corporation. It is all regulated by the state through DCBS, the Department of Consumer and Business Services. And last, even at 6%, this is a substantial savings to Oregon agriculture. There is currently over $6,000,000 of annual premium running through the ABC group, so your members are reducing their insurance costs by approximately $360,000 over this next year through the discount program.