By James Moore
Monday, March 15, 2021 | 37 | 0 | min read
A new blog and newsletter reader asked a question last week after reviewing the loss runs: After seven years, we have a very old employee transfer entitlement. Will that affect our mod experience? Why is it not closed?
James Moore
Let’s see why
Many employee comp carriers leave the claim open because it generates a large number of messages that allow the appraiser to track the claim. Sometimes when claims are closed the notifications are not generated and the claim can very easily fall from a diary system.
Each carrier’s claims department has its own way of handling a large or employee comp subrogation claim.
Some of the third party carriers and administrators that I have worked for or consulted use different methods of tracking the claim. A TPA even has a subro-open status that precludes the claim but generates internal messages and diaries to follow up on.
I wrote an article recommending that employers keep their own diaries for assignment requests. If you make a claim every six months, stay tuned. If the claim is due to a motor vehicle accident, always keep a copy of the original and final police report for your records.
Always send an e-mail to the adjuster, do not call. You will appreciate the email instead of a phone call. If you don’t know the name of the submitter, most carrier and TPA websites provide it.
However, this indicates a potential problem: in order to keep your reserves lower for all claims, you should maintain a working relationship with the employees of the Comp Comp Claims employees. This article will walk you through how to build a working relationship.
Workers’ Comp Subrogation Claim Units
In relation to the $ 350,000 claim, the file was forwarded to a specialized handover unit in Florida. You may be dealing with a department rather than an adjuster. That’s a good situation. If you see different adjusters responding to your email it is acceptable as more than one may be working on your file at this point.
With this high claim amount, the representation of the lawyer by all parties can result in the claim being open for years. The original adjuster you worked with may not know the current status.
Experience mod effect (or not)
The Experience Mod usually has no effect on an No Reserve Claim. The entitlement is the same as a closed entitlement: paid = total incurred.
The sum is the same. It is the number that the carriers report to the rating bureaus that calculated your mod.
The $ 350,000 mod influenced your experience mod for 2017-2019. You probably had to pay higher premiums for those years.
But wait! When the Subrogation Recovery Unit gets money back, the process is usually:
- Subro Claim Recovery.
- Credit is credited back to the file.
- Carrier data reporters report the recovery of funds to the rating bureau (NCCI, WCIRB, etc.).
- The evaluation bureau recalculates the mod and sends it back to the carrier.
- The carrier processes the employee premium refund.
The last point is why I strongly recommend that you set up a journal system to keep track of the handover recovery. Employee compensation doesn’t change that much.
Bottom line: don’t be concerned if a claim is still open that has no outstanding reserves when it is a comp subrogation claim. Create a journal and follow it. Use any calendar program.
This blog post is provided by James Moore, AIC, MBA, ChFC, ARM and republished with permission from J&L Risk Management Consultants. Visit the full website at www.cutcompcosts.com.
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