California’s broken workers’ comp system shows no signs of recovery.
Recent events haven’t helped, with the previous accident year seeing a 10.2% rise in claims. As always, employers and staffing agencies bear the brunt; the Workers’ Compensation Insurance Rating Bureau is proposing a 2.7% increase in premiums.
Yes, this means higher premiums; more lengthy, costly litigation; and a hole on the balance sheet that keeps getting bigger.
Perhaps not — for you, at least.
ADR in workers’ compensation is an innovative, remarkable solution. As California’s workers’ comp system punishes the bottom line further, your business remains unaffected.
The Samuel Hale Exchange (SHE) uses this new solution to create, essentially, a different workers’ comp system for your business. It frees you from this corrupt one and its unfair expenses that choke your profitability.
Understanding ADR for workers’ comp.
As you may know, ADR stands for alternative dispute resolution. Right now, when a worker files a claim, you go through the wringer with California’s comp system.
A RAND Corporation report recently highlighted its greatest structural failures, which are:
- Slow courts, resulting in indefinitely mounting legal fees
- Litigation continues to become more expensive
- Court procedures are inconsistent throughout the state.
The difference is this:
An ADR program uses a carve-out agreement approved by the California Dept. Of Workers Comp. Your company must be of sufficient size to participate, and workers must be organized as a labor union.
When a worker wishes to file a claim, they go through the procedures outlined in the agreement. Solving disputes this way is a departure from the adversarial system of conventional litigation, which involves the California court system or the ombudsman for disputes.
No fraudulent claims, lower xmod, reduced premiums, huge savings.
Resolving disputes through an alternative system frees you from the consequences of California’s dysfunctional version. The three benefits that will have the greatest effect on your bottom line are:
- Shorter resolution times: leading to vastly reduced claims expenses
- Lower xmod: resulting in premium reductions that average 30%
- No fraudulent claims: as mutually agreed terms clearly establish grounds for claims and reasonable limits.
Let us explain briefly how these benefits come to be:
The Samuel Hale Exchange’s approach, a new dimension to ADR.
- With an ADR program, you process the claim through your own structures. It doesn’t get delayed through slow court processes or unnecessary litigation. Reaching resolutions fast means paying less in legal fees.
- Over time, your xmod reflects your positive dispute resolution history. SHE’s implementation of ADR in workers’ compensation consistently lowers xmod to 0.7 or close, achieving a 30% discount in base workers’ comp premiums.
- As your ADR program outlines clear procedures for claims, you escape what we’ve called ‘Claimitis.’ Claims are no longer dragged out by early or unnecessary litigation. And where they have merit, they are also within reason. Opportunistic claims or those for which you bear no liability never see the light of day.
When these benefits combine, your company saves in three highly significant ways: Firstly, the immediate savings mentioned above reduce your cost per claim. Secondly, in the medium term, much fewer inflated or fraudulent claims result in further savings. Then, thirdly and farther ahead, a lower xmod drives your premiums down.
All told, your overall workers' comp expenses fall by 80%.
Break free from California’s broken system. Achieve higher profitability with ADR in workers’ compensation.
Can you spare 15 minutes to talk about how our innovative solutions can create these possibilities and perhaps more for your business?
You can learn about how much, in real dollars and cents, you can save with ADR. In addition to performing a complimentary workers comp analysis, we’ll answer your questions about ADR and SHE’s innovative solutions for employers and staffing agencies.
Reach out to us today for a more profitable company, free of a corrupt and unfair workers’ comp system.