ACC Partnership Programme

Transcription

1 Working for business ACC Partnership Programme Information for employers March 2011

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3 Contents What is the ACC Partnership Programme? 3 What does the partnership mean? 3 Who can apply? 4 What is the difference between the two options? 9 Why would I apply to join the Programme? 4 What are the risks of being in the Programme? 6 What are the benefits of being in the Programme? 7 How does the Programme work? 8 Partnership Discount Plan 8 Full Self Cover Plan 8 Which Programme should an employer choose? 9 What services must the employer provide? 9 Liability protection options 9 Stop Loss Limit 9 High Cost Claim Cover 10 How do I mitigate the financial risks of being in the Programme? 11 How much will it cost? 12 Are there any discounts? 12 What are the discounts? 12 Are there any additional costs? 12 Claim Handback 14 What is the audit and what are the audit standards? 15 Critical elements 15 Levels of performance 15 Who pays for the audit? 16 Responsibilities and rights 17 What is the relationship between my company and ACC? 17 1

4 What about the employer/employee relationship? 17 Where do employee representatives fit in? 17 Does ACC require access to my company and its information? 18 Can we use a third party administrator to assist with workplace injury management? 18 What if one of our employees wants to review a decision? 18 Are there any ongoing monitoring and audit requirements? 18 Joining the ACC Partnership Programme 21 What are the criteria for joining the ACC Partnership Programme? 21 How do we join? 21 What supporting information is required? 21 What is my role in this process? 22 What is the role of my employees or employee representatives? 22 What is ACC s role in the application process? 23 What is the auditor s role? 23 What is the role of the third party administrator? 23 What does the accreditation agreement cover? 24 Appendix I What is the process for gaining entry to the ACC Partnership Programme? 25 2

5 What is the ACC Partnership Programme? The ACC Partnership Programme allows you to stand in the shoes of ACC, managing workplace injuries for your employees and providing entitlements under the Accident Compensation Act 2001 in relation to work-related personal injuries and illnesses. The ACC Partnership Programme encourages you to take responsibility for your own: workplace health and safety injury management, which includes rehabilitation claim management of employees work injuries. The Programme offers significant levy discounts to employers who take responsibility for their own workplace health and safety and the management of work-related injuries. What does the partnership mean? The partnership is a mutually supportive health and safety management relationship between you and your employees and their representatives. It involves: joint (but not equal) management and accountability for workplace safety and workplace injuries the establishment of good systems and practices together the sharing of information and expertise the integration of good health and safety practices into business as usual. This partnership is important as it provides a balanced and complete picture of workplace safety. It also requires a level of necessary accountability for injury management away from ACC s corporate and branch environment. An effective partnership provides: structure to give all employees a representative voice local, regional and national forums for multiple-site businesses evidence of senior management commitment and involvement feedback to management and to employees at all levels ongoing health and safety improvements. 3

6 Who can apply? The ACC Partnership Programme is an option open to any employer who can meet and maintain the entry requirements. However, in reality the savings potential makes it a worthwhile consideration for employers with annual standard ACC levies of $250,000 or more. The Programme is available to employers who meet specific criteria, including: appropriate experience in managing occupational health and safety issues a demonstrated commitment to injury prevention an understanding and awareness of the importance of rehabilitation the financial strength and soundness to meet all expected financial and other obligations arising under the Programme. The application process includes meeting eligibility criteria and undertaking an independent audit of workplace safety management and claim and case management systems. A number of factors will feature in the decision about whether to enter the Programme or not, such as: the number of work-related claims you ve had and their costs in the past three years the level of safety management practices in your workplace, and the experience and expertise of staff responsible for injury management. Grouping Employers can enter the programme as a group where each employer is a subsidiary of the same holding company. Why would I apply to join the Programme? Most employers enter the ACC Partnership Programme for the discounts available and because of the ability to have a more direct influence on the management of health and safety spending and rehabilitation outcomes. An additional reason for wanting to enter the ACC Partnership Programme is the desire to create a safer and more productive working environment. 4

7 What are the risks of being in the Programme? You need to be aware of all the implications of joining the ACC Partnership Programme. Taking over the responsibility for work injury claims also means taking on significant financial risks. If one of your employees suffers a fatal or permanent injury, you could end up providing financial support to the claimant or their surviving dependants for the life of the claim depending upon which liability option is chosen. You need to consider the total potential costs of workplace injuries and your ability to manage the risks. There is potential for increased costs without effective management. 5

8 What are the benefits of being in the Programme? In return for taking on the financial risks, your organisation could potentially have an ACC levy reduction of up to 90% of the standard * levy. The levy reduction does not apply to the residual portion of the Work Account levy. The Programme also has options available to allow you to manage the extent of the ongoing financial liability for your employees claims, which is in turn reflected in the level of levy reduction. The Programme offers real incentives to your employees to adopt effective injury prevention and rehabilitation initiatives. Effective injury prevention and management reduces work-related injury costs, including ACC levies, and promotes the early and safe return to work of employees after injury. This provides benefits for both you and your employees. 6 * Standard levy refers to the current portion of the Work Account levy

9 How does the Programme work? Under the Programme you effectively agree to act on behalf of ACC for work-related injuries. In deciding if the ACC Partnership Programme will suit your needs, there are two cover options to consider: the Partnership Discount Plan the Full Self Cover Plan. Both options have an identical application and assessment process. You enter a legal agreement for an agreed cover period. Cover period An initial cover period starts when you join the Programme and ends on the 31 March following (e.g. if you join on 1 August you will have an initial cover period of eight months). Subsequent cover periods begin on 1 April and end on 31 March the following year. A cover period equals a levy year. Partnership Discount Plan In selecting this option you will assume responsibility for the management and costs of your employees work-related injuries for a nominated claim management period of either 12 or 24 months after the end of the cover period in which the injury occurred. You can also choose to select a Stop Loss Limit to limit your claim liability costs. (For more information go to page 10) At the end of the selected claim management period, if an injured employee is still receiving entitlements, financial and management responsibility for the claim will be transferred to ACC. Some residual liability may exist in respect of gradual process claims. Depending on the combinations chosen, the indicative average premium discounts are * : 54.5% of the standard levy for a claim management period of 12 months 60.6% of the standard levy for a claim management period of 24 months. Full Self Cover Plan In selecting this option you will assume responsibility for claim management of your employees work-related injuries to the end of the claim management period, but financial liability remains for the life of the claims, limited to the Stop Loss Limit you choose. * ACC levy rates 2011/12 7

10 You can choose to manage claims for 24 months, 36 months or 48 months after the end of the cover period in which the injuries occurred. At the end of the selected claim management period, if an injured employee is still receiving entitlements, the delivery of entitlements and management responsibility for the claim will be transferred to ACC at a calculated price. The price is based on an actuarial valuation of the ongoing claim liability. Under Full Self Cover you have the option of choosing High Cost Claim Cover in addition to specifying the Stop Loss Limit. This is a loss limitation option that limits payments in respect of claims arising from a single event. (For more information go to page 11) Depending on the combinations chosen, the indicative average levy reduction is approximately 85% of the standard levy *. Event An event is a discrete and time-bound incident (excluding gradual process claims) that results in claim entitlement costs for one or more employees. Claim management period The claim management period is the period following the end of the cover period during which you continue to manage work-related injuries that occurred during the cover period. The longer the claim management period, the more likely you will be able to return the employee to work (maintain consistency with case management, medical and vocational rehabilitation). 8 * ACC levy rates 2011/12

11 What is the difference between the two options? Overview Claim management period Transfer of claims Levies Stop Loss Limit High Cost Claim Cover Partnership Discount Plan You assume responsibility for claim management only until the end of your nominated claim management period. Financial liability ceases at the end of the claim management period. Choice of 12 or 24 months. Ongoing claims are transferred to ACC at the end of the claim management period. Some residual liability may exist in respect of gradual process claims. You are entitled to a downward levy adjustment. You may choose a Stop Loss Limit from a range between 160% and 250% of the risk. Full Self Cover Plan You assume responsibility for claim management to the end of your claim management period but financial liability remains for the lives of the claims. Choice of 24, 36 or 48 months. Ongoing claims are transferred to ACC at a price calculated by ACC after taking account of all the likely future entitlements on the claims and including an allowance for case management expenses. The downward levy adjustment is much greater for the Full Self Cover Plan than it is for the Partnership Discount Plan. You must select a Stop Loss Limit from a range between 160% and 250% of the risk. Not available. Choice of $250,000, $500,000, $750,000, $1 million, $1.5 million, $2 million or $2.5 million. 9

12 Which Programme should an employer choose? There are a number of pricing combinations offered by the ACC Partnership Programme based on the financial risks you are prepared to take, depending on the product selected and the election of the various options available under each product. The Partnership Discount Plan has lower levy reduction levels available and less associated financial risk. The Full Self Cover Plan allows higher levy reduction levels but a correspondingly higher level of financial risk. What services must the employer provide? As an employer in the ACC Partnership Programme, you are responsible for: claim and case management, including rehabilitation for your employees workrelated injuries (non-work-related injuries are not included) providing all entitlements performing all obligations arising under ACC legislation and the Code of ACC Claimants Rights. Liability protection options While the ACC Partnership Programme offers real incentives for you, there are also financial risks. In regards to managing these risks, there are two options you can use to manage these risks and lessen your liability for unexpectedly high claim costs. The two options are: 1. Stop Loss Limit 2. High Cost Claim Cover. Stop Loss Limit A Stop Loss Limit offers you protection by limiting your liability costs, protecting you against any unexpectedly high total claim costs incurred for injuries arising during a cover period. you can select a Stop Loss Limit that best suits your business. This can be from a range between 160% and 250% of the risk risk is defined as the standard levy x loss ratio the Stop Loss Limit is mandatory under the Full Self Cover Plan and is optional under the Partnership Discount Plan 10

13 during the cover period and related claim management period, you make any claim payments required under the ACC Partnership Programme. However, you will be reimbursed by ACC for any payments you make that exceed your Stop Loss Limit. You still remain responsible for managing all claims (including those that exceed the Stop Loss Limit) until the end of your chosen claim management period. High Cost Claim Cover High Cost Claim Cover offers you protection against unexpectedly high claim costs for injuries due to any one event. this is a loss limitation option, only available to members of the Full Self Cover Plan you can select a High Cost Claim Cover excess that best suits your business. This can be a level of $250,000, $500,000, $750,000, $1 million, $1.5 million, $2 million or $2.5 million per event if the accumulated claim-related payments resulting from a single event reach the nominated excess, any further claim payments arising from the event will be reimbursed by ACC. Reimbursements will operate on a cost recovery basis you would continue to manage and pay all entitlements on these work-related claims for the cover period, and for the related claim management period. By choosing High Cost Claim Cover you can reduce your Stop Loss Limit cover (and the cost of this cover) yet gain a higher degree of protection against unexpectedly high claim costs. 11

14 How do I mitigate the financial risks of being in the Programme? While the ACC Partnership Programme offers you substantial financial incentives, there are also financial risks. In regard to managing these risks, there are a number of options available to you. The level of risk your company is prepared to carry will determine the type of plan you select, the claim management period, and the level of Stop Loss Limit and High Cost Claim Cover you choose. For example: Partnership Discount Plan: a 12-month claim management period and 160% Stop Loss Limit (which is optional) is the least risky option. Full Self Cover Plan: a 48-month claim management period, 250% Stop Loss Limit (maximum) and no High Cost Claim Cover attract the highest risk. In addition to the contract, you have the ability to mitigate your risk further by ensuring that your company has effective and sustainable safety and injury management systems that result in low claim numbers of short duration. 12

15 How much will it cost? ACC levy rates are determined annually and are calculated by risk group. The factors used in the calculation of the ACC Partnership Programme levies are subject to an independent annual review. Your levies: cover the period 1 April (or from acceptance into the ACC Partnership Programme) until 31 March each year are invoiced annually and in advance can be paid by various methods (refer to Are there any discounts? Yes, in return for taking full responsibility for costs and claim management you will pay a significantly reduced levy. What are the discounts? Partnership Discount Plan and Full Self Cover Plan downward levy adjustments are established annually and are dependent on your industry risk (levy classification unit) and your liable earnings. For example: Depending on the combinations chosen under the Partnership Discount Plan, the indicative average downward levy adjustments are * : 48.4% of the standard levy for a claim management period of 12 months 56.3% of the standard levy for a claim management period of 24 months. Depending on the combinations chosen under the Full Self Cover Plan, the indicative average downward levy adjustment is approximately 92.8% of the standard levy **. Go to acc.co.nz/calculators to see the online levy rate calculators. Are there any additional costs? There may be other costs involved in your participation in the ACC Partnership Programme, such as: claim costs during the claim management period (including reviews) * ACC levy rates 2011/12 ** ACC levy rates 2011/12 13

16 costs relating to the mandatory reporting and annual audit process your internal costs relating to management of the ACC Partnership Programme many of these costs will be related to maintaining good health and safety systems a payment to ACC for the cost of any outstanding liabilities for claims transferred at the end of the claim management period if you select Full Self Cover the cost of using a third party for claim and case management, if applicable possible future costs relating to gradual process claims. 14

17 Claim Handback Claim Handback occurs when: a claim is managed to the end of the nominated claim management period you don t manage the claim to the end of the claim management period for any reason (e.g. you exit the Programme before the claim management period ends) ACC has assumed the management of a particular claim (e.g. serious injury claim). Claim Handback applies to each Plan as follows: Full Self Cover Plan All open/active claims at the end of a claim management period. Partnership Discount Plan and Full Self Cover Plan Any claim that will not be managed to the end of the claim management period for any reason. All claims where the agreement is terminated before the end of a claim management period. Claim Handback must be completed on either 31 March, when your elected claim management period ends, or on a date agreed by ACC. Claims liability assessment occurs where there are future costs on a claim that is being handed back to ACC. When claims are being handed back at the end of a claim management period, the liability assessment will be in respect of open/active claims only and will include an allowance for claim handling expenses. Where the Handback is in relation to the early termination of an agreement, the assessment will take account of the following: open claims re-opened claims incurred but not reported claims (IBNR) future claim management expenses. ACC assesses the costs of medical, social and vocational rehabilitation as well as any weekly compensation that is expected to arise during the remaining life of the claim, together with case management expenses. You will receive an invoice from ACC for Handback or re-opened claims, and IBNR claims. 15

18 What is the audit and what are the audit standards? The audit standards for the ACC Partnership Programme are designed to: help employers to create safer workplaces establish: a minimum acceptable benchmark for health and safety and injury management in the workplace the expectation of continuous improvement in workplace health and safety systems towards the successful integration of best practice standards in all areas and activities. Implementation of the ACC Partnership Programme audit standards enables ACC to determine your ability to meet the entry level or the annual renewal requirements of the Programme. Following an audit, an ACC-approved auditor will make a recommendation to ACC on your level of conformance with the audit standards. However, the final decision regarding your level of conformance with the ACC Partnership Programme audit standards will be made by ACC following consideration of all information. Critical elements The audit standards are divided into three main parts: Critical elements one to nine cover safety management practices, including workplace observation Critical elements 10 to 17 cover injury management, including claim administration and rehabilitation Critical elements 18 and 19 include focus group interviews with management and employees and selected case studies to confirm safe systems in action. Levels of performance Within the audit standards there are three levels of performance: Primary level programme entry level. Secondary level consolidation of good practice. Tertiary level best practice or continuous improvement framework. to be considered for entry you must meet all of the primary-level requirements in each section of the audit standards 16

19 to achieve the secondary standard, you must meet all of the primary- and secondary-level requirements to achieve the tertiary standard, you must meet all of the primary, secondary and tertiary-level requirements of the audit standards. If one requirement is not met, the final standard achieved will default to the lowest level for which all requirements are met. Who pays for the audit? The approved auditor will invoice ACC for either of the following audit costs: 50% of the total cost of the audit; or up to $540 (+GST) per day of the audit and $540 (+GST) for report writing and 50% of the auditor s total disbursements; whichever is the least. The auditor will invoice you directly for the balance of the audit costs. 17

20 Responsibilities and rights What is the relationship between my company and ACC? You are agreeing to stand in the shoes of ACC in your workplace to: promote injury prevention and rehabilitation provide effective claim administration, including payment of entitlements provide rehabilitation for all work-related injuries and illnesses. Therefore, the relationship between ACC and you is crucial in ensuring that these objectives are achieved. Both ACC and you need to: agree to act in good faith consult one another when required on matters relating to the ACC Partnership Programme comply with the Privacy Act 1993 and the Health Information Privacy Code protect personal information relating to employees and claimants from unauthorised or unlawful access. You will: supply information to ACC when requested (e.g. claim information). ACC will: supply any information that may be relevant to you or the claims you manage provide support through a dedicated ACC Account Manager. What about the employer/employee relationship? The ACC Partnership Programme promotes the understanding that the involvement of employees and their representatives in developing health and safety procedures will increase co-operative commitment to safer workplaces in New Zealand. A strong working partnership between you and your employees is key to the ACC Partnership Programme philosophy. This health and safety partnership will provide benefits to both you and your employees. Where do employee representatives fit in? Employee representatives (and in particular unions where they are present) have an important role in the development of occupational health and safety procedures. 18

21 Therefore regular, ongoing forums that include management and employee representatives need to take place. Does ACC require access to my company and its information? If you are considering applying to join the ACC Partnership Programme, you will be required to provide full financial information, and designated ACC employees will require access to your premises for site visits, records and personnel. Generally all claim information, even when it is under your management, will be the property of ACC, and ACC will be entitled to access this information at any time. However, ACC will give you reasonable notice of its intention to access such information. ACC will not use information obtained from and belonging to you for any commercial purpose without your prior written consent. Can we use a third party administrator to assist with workplace injury management? You may elect to manage your own claim management services for injured employees. Alternatively you can use a third party to assist with workplace injury management, as long as you maintain a direct personal involvement in all claims, and remain ultimately responsible for these claims. If you choose to use a third party administrator, you will need to disclose to ACC all details of this relationship, on request. You cannot purchase any other insurance to cover your obligations or financial risks under the ACC Partnership Programme. What if one of our employees wants to review a decision? Your employees are entitled to question and seek an independent review of your claim management decisions. If this happens, ACC will provide an independent reviewer and you will be required to pay ACC the cost of the review. Full review details are available on request from your ACC Account Manager. Are there any ongoing monitoring and audit requirements? ACC is required to maintain active monitoring and audits of employers in the ACC Partnership Programme. This monitoring includes: providing monthly claim data to ACC, securely, via the internet an annual self-assessment using the ACC Partnership Programme audit standards to ensure that these standards are met throughout your business an annual independent verification audit of the ACC Partnership Programme standards an annual review of financial information. 19

22 Joining the ACC Partnership Programme What are the criteria for joining the ACC Partnership Programme? To be eligible to enter the ACC Partnership Programme, you will be required to demonstrate and provide supporting documentation to show that: you have experience in self-management of health and safety in the workplace you are committed to injury prevention and rehabilitation you have robust policies, procedures and resources for injury prevention, claim management and rehabilitation you have sufficient financial resources to be able to meet the reimbursement and entitlement costs without difficulty management, employees and employee representatives have roles and responsibilities for health and safety issues. Although the ACC Partnership Programme gives you responsibility for claim management, ultimately ACC remains liable for your performance. For this reason it is important that ACC receives assurances of your managerial and financial capabilities and commitment to the ACC Partnership Programme. In each instance, you will need to assure ACC that you have effective health and safety systems. How do we join? 1. You complete an application form providing supporting financial, business and health and safety information. 2. You undergo a health and safety audit (completed by an ACC-approved independent auditor). Refer to the application process in Appendix I What is the process for gaining entry to the ACC Partnership Programme? What supporting information is required? When completing your application form, please ensure the following documents are attached: 1. A list of all the companies and corresponding ACC numbers covered by this application, and confirmation that the companies included in the group application are subsidiary companies as defined under the Companies Act

23 2. A list of the total number of full-time equivalent employees (FTEs) in each company and details of work activities, locations and the number of employees for each worksite. 3. A credit assessment from an independent rating agency (excluding Government departments). 4. Copies of your annual reports (for a public company) or copies of financial statements (for a private company) for the last three years, together with a certificate attesting to the accuracy of these accounts prepared by a member of a recognised professional accounting body. 5. A full list of all Workplace Health and Safety prosecutions or improvement notices in the last two years together with details of any relevant corrective action undertaken. 6. A copy of the letter to all staff informing them of the application to join the ACC Partnership Programme. 7. Written confirmation that unions and other nominated employee representatives have been consulted regarding this application. This should include: a copy of the Employee Participation Agreement (or similar) and/or a written description of your employee participation system detailing how management, unions and other nominated employee representatives will engage in injury prevention and injury management in your workplace the names of the key union(s) active in your workplace, and contact details (name and phone number) for the on-site delegate(s) written evidence that unions and other nominated employee representatives have been given the opportunity to participate in the self-assessment details of how you propose to disseminate the results of the audit (and following renewal audits) to the unions and other nominated employee representatives. 8. Details of all employer staff who are responsible or have a role in the management and/or performance of the ACC Partnership Programme on behalf of the employer, including claims administration, rehabilitation and data reporting. 9. Details of the third party administrator if applicable, including details of the nature of the relationship. The full sub-contracting agreement is to be sighted by ACC on request. Please note: All information required for this application (including the completed health and safety audit report) must be received by the Partnership Programme team four weeks prior to the intended date of entry into the Programme. This booklet provides information on the ACC Partnership Programme. It will help you to: decide if the ACC Partnership Programme is right for you; and understand the application process. Information about the ACC Partnership Programme is also available on the ACC website at or from your ACC account manager. 21

24 What is my role in this process? Your role is to: complete the application form notify all staff in writing about your intention to join the ACC Partnership Programme consult employee representatives about your intention to join the ACC Partnership Programme co-ordinate the staff and documentation required for the audit, according to the ACC Partnership Programme standards. What is the role of my employees or employee representatives? Employees and/or their representatives must also be given adequate opportunities for input into the ACC Partnership Programme application process. Their role is to: provide feedback on and input into your application be involved in developing health and safety procedures advise, represent and support employees in cases of work-related injuries be involved in the annual health and safety self-assessment. What is ACC s role in the application process? ACC s role is to: conduct an initial review of your information in consultation with your ACC Account Manager assess your financial and health and safety information in detail discuss any further requirements with you confirm the number of site visits and focus group interviews to be undertaken by the auditor review your application in full (including audit report) and provide a recommendation to ACC s Chief Executive Officer provide training, advice or assistance on the ACC Partnership Programme requirements manage the terms and conditions of the agreement. What is the auditor s role? The auditor s role is to: view all relevant employer systems and process documents required by the audit standards 22

25 undertake on-site visits to view evidence of health and safety systems in practice, and local site records. Following an audit, the auditor will make a recommendation to ACC on your level of conformance with the audit standard. However, the final decision regarding your level of conformance with the ACC Partnership Programme audit standard will be made by ACC following consideration of all information. What is the role of the third party administrator? If you choose to sub-contract a third party administrator, they will have a role in managing your work-related claims. The performance of the administrator is your responsibility. Any sub-contracting arrangement with a third party does not directly involve ACC. However, the ACC Partnership Programme standards still apply, and the third party will need to be part of the independent audit to ensure that the standards are being met. Any such sub-contracts must be disclosed to ACC. Contracts may be viewed by ACC on request. What does the accreditation agreement cover? If you are accepted into the ACC Partnership Programme, you must enter a legal agreement with ACC. A copy of this agreement is available on request from ACC. The agreement: covers all terms of the contract between ACC and you must be for a minimum of one complete cover period may be extended by consent between you and ACC. This should be done three months before the agreement is due to end can be terminated under certain circumstances. If the agreement is terminated, the management of further injuries during a cover period may revert to ACC, therefore you may be financially responsible for new and existing claims occurring during any remaining part of the cover period, and the subsequent claim management period. 23

26 24 APPENDIX I: What is the process for gaining entry to the ACC Partnership Programme?

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