Among the many employee benefits packages, an employer must consider is Workers Compensation. Traditionally, employers pay for Workers Compensation insurance or contribute to state Workers Compensation funds, which then cover the costs when an employee gets sick or injured on the job. However, there is another option that is becoming increasingly viable for many companies: self-insured workers compensation plans.
The Benefits of Out-of-Pocket Insurance Plans
The experts at Caitlin Morgan suggest that companies meet certain criteria before opting for self-insured workers compensation, including having the cash flow to pay for claims as they occur. The benefits for those who do self-insure include:
- Increased control over claims management
- The potential for pooling resources with other companies who choose self-insurance
- A reduction in the fixed costs incurred from traditional Workers Compensation plans
- The ability to provide quality care for employees injured on the job
Self-insured workers compensation plans are not right for every company, and not every state allows them, but there are advantages to those companies who do meet the requirements for self-insurance. If your company has the financial resources to pay unpredictable claims costs, and you have the ability to dedicate human resources in managing a self-insured plan, a pooled or independent workers compensation plan might be the best option for your company.