A new kind of group - group-retrospective rating

Group-retrospective rating is a voluntary performance based incentive program. BWC-certified sponsors create groups of employers who practice effective workplace safety and claims management to achieve lower premiums than they could as individuals.

BWC-certified group-retrospective-rating sponsor list
This list provides employers with the names of BWC-certified sponsors for group retrospective rating. Only organizations appearing on the list are permitted to solicit and form the groups for retrospective rating.

Employers continue to pay their own individual premiums and have the opportunity to receive retrospective premium adjustments based upon the combined performance of the group. Depending on that performance, the participating employers can receive either a premium refund or assessment. Forty states have adopted some version of a retrospective rating plan. This plan provides incentives to the group retro members to control and reduce losses. So, those members who control losses have the potential to see lower premiums.

Why participate
Employers who believe their experience rate or base rate does not properly reflect their current level of safety could benefit from participating in this program. And employers who do not qualify for the traditional group-rating program may also benefit. Participants have the opportunity to directly link premium levels to performance.

Eligibility requirements

• Be a private, state-fund employer or a public employer taxing district
  Note: Self-insuring employers and state agency public employers are not eligible to participate
• Be current on any and all premiums, administrative costs, assessments, fines or monies owed to BWC
• Have active coverage by the application deadline
• Not have cumulative lapses in workers’ compensation coverage in excess of 40 days within the 12 months preceding the application deadline

Sponsoring organizations also may screen group-retro applicants with their own underwriting requirements. This is an important step in the process to ensure your fellow group members are committed to safety and claims cost containment.

How it works
Employers will pay experience- or base-rated premium under the same terms as if they were not in a retro group. The total premium for the entire group is the standard premium of the group. The standard premium serves as the benchmark that is adjusted up and down retroactively.

We will recalculate the group-retrospective premium 12 months after the end of the policy year, based on developed incurred claim losses, including reserves, for the whole group during the original policy year. We will compare the new premium to the standard premium. If the retrospective premium is lower than the standard premium, we will distribute a refund to the employers in the group. If the retrospective premium is higher, then we'll charge each employer in the group an assessment.

We'll recalculate premium again at 24 and 36 months and issue refunds or charge assessments accordingly. We'll do this based on the percentage of total group standard premium paid by an employer.
Example: If an employer’s standard premium accounts for 10 percent of the total group standard premium for that retro year, that employer would receive 10 percent of all refunds and assessments resulting from that retro year.

We'll also apply a maximum premium ratio (MPR) to all retro groups and take that ratio into account when billing. This ratio will cap the amount of additional premium a retro group could pay for a policy year. The group sponsor chooses the maximum premium ratio for the retro group. Groups who choose a higher MPR would be eligible for higher refunds. This higher potential return is offset by the possibility of a greater assessment.

Payment of refunds/billing of premium

• Premium refunds within four months of the valuation date
• Premium assessments due 28 days after the employer receives the invoice
  We'll charge penalties on any additional premium not paid when it is due.

Application and enrollment
Interested employers must apply through a BWC-certified sponsor. Certified sponsors will provide you with an application and make the final decision whether to include you in their group-retrospective program. Here are the enrollment deadlines and coverage periods.

• Private, state-fund employers
• Enrollment deadline – July 31 for the policy year starting July 1st 2009. For each year thereafter, the deadline is the last business day of April
• Coverage period - July 1 to June 30
• Public employer taxing districts
• Enrollment deadline - on or before the last Friday of September
• Coverage period - Jan. 1 – Dec. 31

Compatibility with other programs
Group-retrospective employers can participate in all other BWC programs during that policy year except for the following:

• Individual retrospective rating
• $15,000 Medical-Only Program
• Drug-Free Workplace Program
• Deductible Program
• One Claim Program
• Group-experience rating