Why are my Comp rates increasing when I have had a Safe 2012?

by | Dec 4, 2012 | Healthcare Insurance, Professional Employer Organization (PEO), Workers Comp, Workers' Compensation Insurance

Five reasons to partner with a PEO for work comp

This is a great question that I hear a lot from staffing companies lately. Here are a few reasons that this could be happening to you:

  1. Insurance carriers are dropping their staffing business clients, and other carriers that are still willing to write staffing companies are raising rates because there is less competition for your business.
  2. NCCI has changed the methodology that they calculate mod rates effective January 1, 2013. Insurance companies are anticipating this change. Staffing companies with mods above 1.0 will see increases as a result of this new NCCI mod calculation.
  3. Insurance companies do not see staffing companies as a good risk any more, especially if your premium is not at least 100K a year. Just as you may decide that certain types of clients are too risky from a service or payment perspective, many carriers have come to this realization about staffing companies with respect to risk profiles.
  4. You may also find that to continue with your current rates you need to pay the carrier a deposit or have a deductible in your policy; which you did not have to do have before. For the carrier this is a way to minimize risk and maintain profits.
  5. Over all medical costs have increased resulting from accidents in most industries affecting rates. Carriers are nervous about costs resulting from Obamacare/ ACA.

One of the options that more staffing companies are asking about in order to keep their work comp rates low is to partner with a Professional Employers Organization or PEO. A PEO has a portfolio of client companies – not just staffing (sort of like a captive.) So if you do not have a perfect NCCI mod or loss history, you can still find affordable work comp.

Below is a good article that explains how larger companies join captives to control rates increases, which is the same type of risk transfer you can achieve by partnering with a PEO.

http://www.propertycasualty360.com/2012/07/18/companies-turning-to-captives-to-ease-rising-worke?t=captives

Please give us a call at 202-302-1212 and we will be glad to provide a PEO quote for your workers compensation coverage.

All the best

David Schek
President
StaffingCompSolutions.com
American Staffing Association Member
California Staffing Association Member
Exclusive PEO Broker for the United States Staffing Association