ACC's workplace accident compensation scheme will be opened up to private competition from October next year, the Government said today.
The well-signalled change was among proposals detailed in a discussion document on ACC reforms released today.
ACC Minister Nick Smith said the proposals were about putting employers at the centre of workplace injury management.
"We are proposing giving employers who want it a choice of workplace accident cover for their workers from either ACC or a private insurer," he said.
"The Government is committed to retaining our unique 24/7 no-fault system and workers' entitlements but wants to improve the incentives for safer workplaces, better rehabilitation and greater cost effectiveness."
Among the proposals is an extension to more employers of the Accredited Employer Programme from April next year.
The programme allows accredited employers to self-manage and fund work injury claims arising in the workplace.
Dr Smith said the programme was delivering 12 per cent fewer claims and 15 per cent lower costs.
"These reforms are about getting business to view ACC not as a tax but as a manageable cost that can be reduced with improved safety," he said.
"The pressure of competition will make ACC more resilient and efficient. The corporation has gone through repeated cycles of cost blowouts over its 37-year history and needs the constant pressure of choice to keep it on its toes."
Dr Smith said the Government was advancing reforms in a careful and considered way.
The changes outlined in the discussion document would require at least existing minimum worker cover and entitlements.
Insurers would have to meet minimum prudential requirements, and in the event of an insurer failing, the cost would be met by a levy on all workplace insurers.
A market regulator would monitor and enforce employer and insurer compliance, and an easily-accessible independent dispute resolution service would be set up.
Minimum prices and conditions for health providers would be put in place, and a single claim lodging unit would minimise administration for the health sector.
The Department of Labour will accept submissions on the proposals until July 15.