Reporting of Deductible Programs

Transcription

1 Reporting of SUMMARY OF REPORTING OF DEDUCTIBLE PROGRAMS These instructions and requirements for the Reporting of is a centralized resource that provides you with details on the following: Overview of deductible programs program requirements program characteristics Net and gross deductible program descriptions NCCI Small Guide (Small and Large) Exceptions chart Carrier independently filed deductible program requirements OVERVIEW OF DEDUCTIBLE PROGRAMS A deductible is an optional feature of an insurance policy that refers to when a policyholder has agreed to pay, or be responsible for, a portion of the loss up to the deductible amount. By selecting a deductible program, the insured typically receives a reduced premium, and the insurer is responsible for all losses that exceed the deductible amount. programs are available for medical and indemnity benefits in various amounts to meet the needs of insured employers. This allows employers to select a deductible program that assists them in managing their losses. In the event of an insurable loss, the standard deductible program practice is for the insurer to pay the entire loss, including the deductible amount. At a later date, the employer (insured) is responsible for reimbursing the insurance carrier (insurer) for the deductible amount. SMALL AND LARGE DEDUCTIBLE PROGRAM OVERVIEW There are two types of deductible programs: small deductible and large deductible programs. The basic distinction between small and large deductible programs is the size of the deductible amount. Small deductible programs are those in which the deductible amount is less than $100,000, while large deductible programs have deductibles of $100,000 and greater. Small deductible programs may be NCCI filed programs or carrier independently filed programs, while all large deductible programs are only carrier independently filed programs. The following is an overview of NCCI filed small deductible programs, carrier small deductible programs, and carrier large deductible programs. NCCI small deductible programs NCCI develops and files these small deductible programs with the appropriate departments of insurance, pursuant to the deductible program rules of each state. By definition, these programs provide deductibles that are less than $100,000 (amounts vary by state). For example, the small deductible programs currently available in Florida offer deductibles in the range of $500 to $21,000. Carrier small deductible programs In some states, data providers are allowed to file deviations from NCCI s small deductible programs. Alternatively, data providers file their own independently developed small deductible programs. These programs are intended to meet the underwriting and marketing needs of the data provider and their insured customers. Each data provider must file these programs with the appropriate state insurance departments and follow the deductible program rules of each state. By definition, these programs provide deductibles that are less than $100,000 (amounts vary by state). Carrier large deductible programs All large deductible programs are data provider-developed programs, meaning that there are no NCCI large deductible programs. Large deductible programs are intended to meet the special needs of larger insured employers that often prefer a large deductible amount for their policy. Each data provider must file these programs with the appropriate state insurance departments and follow the deductible program rules of each state. Generally, by definition these programs provide deductibles that are $100,000 and greater (amounts vary by state). December 20, 2004 Page 1 of 1

2 Reporting of DEDUCTIBLE PROGRAM CHARACTERISTICS All small and large deductible programs share common features, with each of them offering many options to select from. The following are the features that apply to both small and large deductible programs. The Type has two components: Type and the Plan Type. Type The Type has two components: Type of and the Type of Plan. Type of identifies the category of losses that are covered within the deductible program. Options include deductibles that apply to any of the following: Medical losses only Indemnity losses only Both medical and indemnity losses Type of Plan identifies the method of derivation and application of the deductible. programs may be applied differently. Examples of typical options are deductibles applied on a per claim, per accident, per policy, and percent of claim cost basis. For coding requirements for the Type of and Type of Plan, refer to NCCI s URE Workers Compensation Statistical Plan in the Header Data/Policy Information section under Type. Percent If applicable, the Percent is the percent of the deductible to be paid by the insured as defined by the deductible program. The Percent is reported as a whole number (e.g., 15% is reported as 15 ). Amount The Amount can vary from as low as $100 (small deductible program) to greater than $100,000 (large deductible programs). The deductible amount is a portion of the loss amount that the policyholder has agreed to pay or be responsible for. The deductible amount is reported in the Amount /Accident field or Amount Aggregate field. Amount /Accident If applicable, the Amount /Accident is the loss amount by claim/accident to be paid by the insured as defined by the deductible program. Amount Aggregate If applicable, the Amount Aggregate is the maximum loss amount for all claims to be paid by the insured, as defined by the deductible program. Premium Credit Applicability and Statistical Codes The premium credit developed for deductible programs is applied before or after the experience modification, depending upon the specific program and state rules. NCCI Statistical Codes 9663 and 9664 are used to report premium credits for deductible programs, as follows: Statistical Code 9663 is used to report premium credits that are not subject to further adjustment by the experience modification factor. The premium credit is applied to the premium after the experience modification. Statistical Code 9664 is used to report premium credits that are subject to further adjustment by the experience modification factor. The premium credit is applied to the premium before the experience modification. Refer to the NCCI Small Guide (page 4 of this document) for details on the correct application of the deductible premium credit. Refer also to NCCI s Basic Manual for Workers Compensation and Employers Liability Insurance, which provides a Premium Algorithm for each state. December 20, 2004 Page 2 of 2

3 Reporting of Reporting Examples For specific examples of deductible reporting scenarios, refer to the Unit Report Quality (URQ) User s Guide s Part 4 URE 1 st Unit Reports examples on how to report medical and indemnity deductible programs with the following characteristics: Type of Plan reported: per claim (example URE 4-4), per accident (example URE 4-5), per coinsurance (example URE 4-6), and per Benefit Coinsurance (example URE 4-7) Amount reported: per claim/accident (example URE 4-4) and per claim/accident and per aggregate (example URE 4-6) Premium Credit Program (example URE 4-3) NET AND GROSS DEDUCTIBLE PROGRAMS All deductible programs are categorized into either net or gross programs. insurance department rules and regulations determine if the deductible programs offered in the state can be net programs, gross programs, or both net and gross programs. Prior to describing the difference between net and gross deductible programs, it is important to understand loss reporting (indemnity and medical) and deductible reimbursement, as explained below. Loss reporting Indemnity and medical losses reported on unit reports must be reported at their full value (as if no deductible applies) as of the report valuation date. This is also referred to as reporting the losses on a gross basis. reimbursement Under deductible programs, the insurer pays the total cost of the claim. To recoup the deductible amount, the insurer later bills the insured for the policy s deductible amount. This receiving of the deductible amount from the insured is referred to as deductible reimbursement, which is subsequently reported for net reporting programs. Net Net deductible programs prescribe that losses net of the deductible reimbursement are used in the experience rating calculation. NCCI s system applies the reported (Amount) to the reported gross loss and produces the net incurred loss used to promulgate experience rating modifications. NOTE: Insurers should report the (Amount) on the unit report only when the policy is subject to a net program. Example: The following example explains the deductible reimbursement concept for a net deductible program with a loss amount of $125,000 and a Amount of $ (per claim). The insurer pays the entire $125,000 cost of the claim and later bills the insured for the $ deductible amount. The cost of the claim to the insurer is $115,000, and the insured employer is responsible for the $ to cover the deductible amount. Since the unit report must be reported at the full value, the full cost of the claim, $125,000, is reported in the Medical and/or Indemnity amount fields, and $ is reported in the (Amount) field. When (Amount) is received between unit report valuation dates (i.e., between the 1st and 2nd report levels), the general Statistical Plan rule is to apply at the next unit report valuation date. However, state-specific exceptions to this rule apply for Georgia, Idaho, Kansas, Missouri, and Oregon. (For details on deductible reimbursement, including state-specific rules, refer to NCCI s URE Workers Compensation Statistical Plan in the Loss Information section under the [Amount]). For information on the states that have net deductible programs and the state rules and exceptions, refer to the NCCI Small Guide and the (Small and Large) Exceptions chart (page 8 of this document). December 20, 2004 Page 3 of 3

4 Reporting of Gross Gross deductible programs prescribe that the reported gross Incurred Indemnity and Incurred Medical amounts are to be used in the experience rating calculation. The (Amount) is not utilized in the experience rating calculation the entire gross loss is used to promulgate the experience rating modification. Insurers should not report the (Amount) on the unit report when the policy is subject to a gross program. Report as zero (0) in the (Amount) field. For information on the states that have gross deductible programs and the state rules and exceptions, refer to the NCCI Small Guide and the (Small and Large) Exceptions chart (page 8 of this document). NCCI SMALL DEDUCTIBLE PROGRAMS STATE GUIDE The following NCCI Small Guide provides information on all NCCI filed small deductible programs, including the effective dates of the deductible programs and the specific data to report on the Header,, and Loss Records. Alabama Arizona Arkansas Colorado (05) Connecticut (06) Effective Date Type of 9/1/91 Indemnity 4/1/03 Indemnity 5/1/94 Indemnity 4/1/96 Medical 4/1/96 Indemnity 7/1/91 Indemnity NCCI Small Guide Header Record Type of Plan Amount Per Claim/Accident ( amounts are not specified in Arizona statute) $1,000, 1,500, 2,000,, 3,000, 3,500, 4,000, 4,500, 5,000, 5,000 Record Statistical Code 9663 Not subject to experience modification factor 9664 Subject to experience modification factor Experience Rating Net or Gross Reporting Program Loss Record Amount 9663 Gross Report 0 -specific rules apply. Refer to the (Small and Large) Exceptions chart (see page 9 of this document). 1/1/90 Indemnity $1,000, 5,000, December 20, 2004 Page 4 of 4

5 Reporting of Florida (09) Georgia (10) Hawaii (52) Idaho (11) Illinois (12) Effective Date Type of 7/1/90 Indemnity 7/1/95 Indemnity 7/1/90 Indemnity 7/1/90 Indemnity 1/1/94 Indemnity 7/1/90 Indemnity NCCI Small Guide Header Record Type of Plan Coinsurance (06) Benefit Coinsurance (07) Amount Per Claim/Accident $5,000,, 15,000, 20,000, 25,000, 50,000, 75,000 $5,000,, 15,000, 20,000, 21,000 (aggregate) Record Statistical Code 9663 Not subject to experience modification factor 9664 Subject to experience modification factor Experience Rating Net or Gross Reporting Program Loss Record Amount $ No Premium Credit Net Report Applicable -specific rules apply. Refer to the (Small and Large) Exceptions chart (see page 9 of this document). 6/25/95 Medical 7/1/99 Indemnity $100, 150, 200, 300, 400, 500,, 5,000, Up to $1,000 No Premium Credit Net (Refer to Idaho s compensation reimbursement option rules) is subject to Idaho s compensation reimbursement option rules, not to exceed $1,000 -specific rules apply. Refer to the (Small and Large) Exceptions chart (see page 10 of this document). 4/1/84 Medical $1,000 December 20, 2004 Page 5 of 5

6 Reporting of Indiana (13) Iowa (14) Kansas (15) Kentucky (16) Maine (18) Maryland (19) Effective Date Type of 1/1/92 Indemnity 1/1/92 Indemnity 1/1/92 Indemnity 4/1/97 Medical NCCI Small Guide Header Record Type of Plan Coinsurance (06) Benefit Coinsurance (07) Amount Per Claim/Accident, 3,000, 3,500, 4,000, 4,500, 5,000 Record Statistical Code 9663 Not subject to experience modification factor 9664 Subject to experience modification factor Experience Rating Net or Gross Reporting Program Loss Record Amount $21,000, 3,000, 3,500, 4,000, 4,500, 5,000 $100 $ in increments of $50 No Premium Credit Net Report Applicable -specific rules apply. Refer to the (Small and Large) Exceptions chart (see page 11 of this document). 11/1/91 Indemnity, 5,000, -specific rules apply. Refer to the (Small and Large) Exceptions chart (see page 11 of this document). 7/1/93 Indemnity 4/27/88 Indemnity 1/1/92 Medical 1,500,, 5,000, 7,500, $1,000, 5,000 $250, 500 -specific rules apply. Refer to the (Small and Large) Exceptions chart (see page 11 of this document). 1/31/92 Indemnity $500, 1,500, December 20, 2004 Page 6 of 6

7 Reporting of Missouri (24) Montana (25) Nebraska (26) Nevada (27) New Hampshire (28) New Mexico (30) North Carolina (32) Oklahoma (35) Oregon (36) Effective Date Type of 10/23/95 Indemnity 10/23/95 Indemnity 8/28/98* Medical* NCCI Small Guide Header Record Type of Plan * Amount Per Claim/Accident, 5,000,, 15,000, 20,000 Record Statistical Code 9663 Not subject to experience modification factor 9664 Subject to experience modification factor Experience Rating Net or Gross Reporting Program Loss Record Amount Up to $500* No Premium Credit* Net* Report Applicable * *-specific rules apply. Refer to the (Small and Large) Exceptions chart (see page 12 of this document). 7/1/91 Medical 7/1/94 Indemnity 7/10/90 Medical 7/1/00 Indemnity 7/1/01 Indemnity 3/9/92 Indemnity 3/9/92 Indemnity 1/1/91 Indemnity 10/1/93 Indemnity 11/1/96 Medical $1,000, 2,000,, 5,000, $100, 250, 500, 1,000, 1,500, 2,000,, 5,000 $, 15,000, 20,000, 5,000, 5,000, 5,000,, 5, Net Report Applicable -specific rules apply. Refer to the (Small and Large) Exceptions chart (see page 13 of this document). 1/1/88 Medical $500 No Premium Credit Net Report Applicable -specific rules apply. Refer to the (Small and Large) Exceptions chart (see page 13 of this document). December 20, 2004 Page 7 of 7

8 Reporting of Rhode Island (38) South Carolina (39) South Dakota (40) Tennessee (41) Utah (43) Virginia (45) Effective Date Type of 5/1/94 Indemnity 1/1/96 Indemnity 7/1/90 Indemnity 9/1/96 Medical 7/1/01 Indemnity 12/1/97 Indemnity 5/1/96 Indemnity NCCI Small Guide Header Record Type of Plan Amount Per Claim/Accident $250, 500, 1,000,, 5,000, 5,000 $100, 250, 500, 1,000,, 5,000, 7,500, Record Statistical Code 9663 Not subject to experience modification factor 9664 Subject to experience modification factor Experience Rating Net or Gross Reporting Program Loss Record Amount DEDUCTIBLE PROGRAMS (SMALL AND LARGE) STATE EXCEPTIONS The below (Small and Large) Exceptions chart provides the state-specific rules for the following: Small Applies to NCCI and independent carrier filings Large Applies to independent carrier filings only (Refer to page 13 of this document for information on independent carrier filings.) The chart lists the rule(s) for each state for which a deductible program exception applies, including (Amount) limits. The chart indicates if the state exception applies to small and/or large deductible programs, and dates are provided, if applicable. The following (Small and Large) Exceptions chart is to be used in conjunction with the NCCI Small Guide (see previous section of this document). December 20, 2004 Page 8 of 8

9 Reporting of For other details on state exceptions, refer also to NCCI s URE Workers Compensation Statistical Plan, in the Loss Information section and in the Subsequent Reports and Corrections section. Colorado (05) (Small and Large) Exceptions Exception All claims with a deductible program are subject to net experience rating with an upper limit (maximum) of $5,000 per claim. Report the applicable gross (full value) Incurred Medical and/or Indemnity amounts. Report the associated (Amount) with an upper limit of $5,000 per claim. (Amount) for experience rating modifications. Effective with all unit statistical reports received at NCCI on January 1, 2003 and after, the definition of was amended to remove the requirement that the insurer must receive the reimbursement from the insured before reporting the. Small Applies to NCCI and Independent Carrier Filings Large Applies to Independent Carrier Filings Georgia (10) All claims with a deductible program are subject to net experience rating with an upper limit (maximum) of $ per claim. Report the applicable gross (full value) Incurred Medical and/or Indemnity amounts. Report the (Amount) with an upper limit of $ per claim. (Applies to policies effective July 1, 1990 and after) (Applies to policies effective no later than July 1, 2001) (Amount) for experience rating modifications. Correction reports When the reimbursement is received after the original unit statistical reporting of the claim, a correction report must be submitted for all report levels with the (Amount) with an upper limit of $ per claim. December 20, 2004 Page 9 of 9

10 Reporting of Idaho (11) (Small and Large) Exceptions Exception There are two Idaho deductible program options: Compensation and the Contract, as explained below. Compensation Option A compensation reimbursement option is available that allows the insured to reimburse the insurer for claims up to (not to exceed) $1,000 of combined medical and/or indemnity amounts. (The term compensation reimbursement replaces deductible reimbursement, as referenced in the URE Workers Compensation Statistical Plan.) For losses in which the insured has utilized this compensation reimbursement option: Report gross (full value) of the Incurred Medical and/or Indemnity amounts. Report the total amount of the claim in the (Amount) field not to exceed $1,000. (Amount) for experience rating modifications. For losses in which the insured has initially utilized this compensation reimbursement option, but later exceeds the $1,000 criteria: As of the 1st unit report Report the applicable gross (full value) Incurred Medical and/or Indemnity amounts. Report the associated (Amount) as zero (0). Subsequent to the 1st unit report and between report valuations Correction report(s) are required to remove the compensation reimbursement from the incurred loss amounts for all report levels. For each of the previous report levels, report the Report the applicable gross Incurred Medical and/or Indemnity amounts. Report the associated (Amount) as zero (0). Continue this reporting for any additional report levels. Contract Option A deductible contract is another option for offering optional deductible benefits. A deductible contract is filed with and approved by the state. The compensation reimbursement option does not apply when another deductible contract is in force. Additional Information For details, refer to NCCI s Basic Manual for Workers Compensation and Employers Liability Insurance, Idaho Miscellaneous Rules Compensation Option. Small Applies to NCCI and Independent Carrier Filings (Effective July 1999) Large Applies to Independent Carrier Filings (Effective July 1999) December 20, 2004 Page 10 of 10

11 Reporting of Iowa (14) (Small and Large) Exceptions Exception All claims with a small deductible program are subject to net experience rating. Insureds have the following two options for handling small deductible medicalonly claims that are up to, but not exceeding, the state deductible limit: Option 1: Insureds may report these claims directly to the insurer. The insurer is responsible for the claim settlement, seeking deductible reimbursement from the insured, and must report these claims on a gross basis (including the insured s reimbursement) to NCCI. Report the applicable gross (full value) Incurred Medical and/or Indemnity amounts. Report the associated (Amount). Reported losses are reduced in NCCI s system by the reported (Amount) for experience rating modifications. Option 2: Insureds may provide coverage for these claims directly ( out of pocket ) and not report them to the insurer. Small Applies to NCCI and Independent Carrier Filings Large Applies to Independent Carrier Filings No Kansas (15) All claims with a deductible program are subject to net experience rating. Report the applicable gross (full value) Incurred Medical and/or Indemnity amounts and associated (Amount). Reported losses are reduced in NCCI s system by the reported (Amount) for experience rating modifications. Correction reports When reimbursement of the deductible is received after the original unit statistical reporting of the claim, a correction report must be submitted for all report levels with the (Amount). Maine (18) All claims with a small deductible program are subject to net experience rating with an upper limit of $5,000 per claim. No Report the applicable gross (full value) Incurred Medical and/or Indemnity amounts. Report the associated (Amount) with an upper limit of $5,000 per claim. (Amount) for experience rating modifications. December 20, 2004 Page 11 of 11

12 Reporting of Missouri (24) (Small and Large) Exceptions Exception Net and Gross Availability Both gross and net deductible programs are allowed for medical and indemnity programs. NCCI assumes that the net program is used unless the employer exercises the option to choose a gross plan. If an employer elects a gross plan, the insurers files should document this decision. For net programs, report the applicable gross (full value) Incurred Medical and/or Indemnity amounts. Report the associated (Amount). Reported losses are reduced in NCCI s system by the reported (Amount) for experience rating modifications. For gross programs, report the applicable gross Incurred Medical and/or Indemnity amounts. Report the (Amount) as zero (0). Option for Employer Paid Medical- Claims Up to $500 The employer has an option to pay medical costs up to (not to exceed) $500 when there is no lost time from work for the purpose of excluding these claims from experience ratings. The Missouri Employer Paid Medical Endorsement (WC B) is required for the policy in cases where this option is used. (Refer to NCCI s Forms Manual of Workers Compensation and Employers Liability Insurance for information on WC B.) If this policy endorsement is used, the losses are reported as follows: For losses reported that are subject to the $500 medical-only employer paid option: Report the gross (full value) Incurred Medical field and report that same amount in the (Amount) field. (Amount) for experience rating modifications For these losses that later exceed $500 and/or include indemnity amounts (after the first unit statistical reporting): As of the 1st unit report Report the applicable gross (full value) Incurred Medical and/or Indemnity amounts. Report the associated (Amount) as zero (0). Subsequent to the 1st unit report and between report valuations Correction report(s) are required to remove the compensation reimbursement from the incurred loss amounts for all report levels. For each of the previous report levels, report the applicable gross Incurred Medical and/or Indemnity amounts. Report the associated (Amount) as zero (0). Continue this reporting for any additional report levels. For details on Missouri Insurance, refer to NCCI s Basic Manual for Workers Compensation and Employers Liability Insurance, Missouri Miscellaneous Rules Insurance. Small Applies to NCCI and Independent Carrier Filings Large Applies to Independent Carrier Filings December 20, 2004 Page 12 of 12

13 Reporting of Oklahoma (35) (Small and Large) Exceptions Exception All medical claims with a small deductible, medical-only program are subject to net experience rating with an upper limit (maximum) of $500 per claim. For medical-only deductible programs, the reported (Amount) is subject to an upper limit of $500 per claim. Report the applicable gross (full value) Incurred Medical amount. Report the associated (Amount) with the upper limit of $500. (Amount) for experience rating modifications. Small Applies to NCCI and Independent Carrier Filings Large Applies to Independent Carrier Filings No Oregon (36) An optional $500 Program is available. If the insured elects to use this program, the insured reimburses the insurer up to $500 of medical costs on each nondisabling claim. No If the optional program is used, report the applicable gross (full value) Incurred Medical amount. Report the associated (Amount) with the upper limit of $500. (Amount) for experience rating modifications. Correction reports When reimbursement of the medical costs is received after the original unit statistical reporting of the claim (1st or subsequent unit report), a correction report must be submitted for all report levels. CARRIER INDEPENDENTLY FILED DEDUCTIBLE PROGRAM REQUIREMENTS Carriers may develop their own independent small and large deductible programs, which must be filed with each state department of insurance. These independent filings must comply with state insurance department rules and regulations, such as the following: Gross or net programs The deductible programs allowed by the state can be net programs, gross programs, or both net and gross programs. Refer to the NCCI Small Guide and the (Small and Large) Exceptions chart (both charts shown previously in this document), for information on the states that have gross and/or net programs, which may apply to independent carrier filings. reimbursement The deductible reimbursement rules for independently filed small and large deductible programs are pursuant to the requirements contained in NCCI s URE Workers Compensation Statistical Plan, Part 4: Losses, in the (Amount) section. For these independently filed small and large deductible programs, the data provider must apply each state s rules regarding gross states, net states, and deductible reimbursement rules in order for NCCI to properly promulgate experience rating modifications. December 20, 2004 Page 13 of 13