ACC warnings to large firms on compo risk

By RICHARD BRADDELL

WELLINGTON - ACC will monitor self-insurance arrangements made by larger employers under its new accredited-employers scheme to ensure that there are no third-party insurers involved.

A roadshow begins next week explaining the new accredited- employers scheme that comes into effect when ACC's monopoly on workplace injury insurance is reinstated on July 1.

However, executives said yesterday that ACC would ensure the Government's plans to exclude private insurers from the market were not thwarted.

Corporation spokesman Darrin Goulding said the Government had gone to a lot of trouble to re-establish a public scheme and would not create a loophole to establish or maintain private compensation.

While the accredited-employers scheme would allow companies to contract out aspects of case management and rehabilitation, Mr Goulding said every third-party contract would be reviewed to ensure it contained no elements of risk transfer or stop-loss protection.

"The key to the success of the programme is that the employer takes financial ownership of the risk," he said.

If employers did not accept that risk then they did not have the incentive to manage it.

The accredited-employers programme has two options, the most comprehensive being full self-cover under which large employers with the financial capacity will be able to self-insure the risk and retain management of long-term injuries.

After stipulated periods of between two and five years they will be passed back to ACC.

Full self-cover employers will still pay a premium to ACC ranging between 8 per cent and 14 per cent of the levy that would have applied to cover the corporation's administration costs, arrangements it has made as a bulk-funder and clearing house to health providers, and for a re-insurance programme that caps losses.

A more modest partnership discount plan, in which employers can manage claims for one or two years, will allow for premium rebates of about 30 per cent.

But while there had been some expectation that groups of smaller employers might be able to band together to form a common accredited-employer pool, ACC said yesterday that separate legal entities would be allowed to group together only when there was a thread of common ownership.

ACC is already working with the top 500 employers to get the programme running and chief executive Garry Wilson was confident most employers would have their programmes in place by July 1.

To qualify, employers must demonstrate that they have appropriate injury prevention and rehabilitation capabilities and that they have the financial strength.

Trained auditors should be ready "to hit the streets" on May 1, while the ACC's Website will allow employers to work out whether they qualify or not.