Part of what we do is manage worker’s comp programs, and we are by definition what’s called a third party administrator or a TPA. As a bit of background information, in the state of New Hampshire, you can buy workers’ comp insurance through three different methods.
First, if you’re a large enough employer, and by large we mean if you have a premium that’s probably more than a half a million dollars, you can be self-insured, which basically means you write checks to pay the claims that your employees have. You have to have a bunch of other things in place to be able to do that, you have to have a license from the state, you have to provide bonding or surety to the state, you have to buy excess or reinsurance to cover catastrophic claims, and you have to hire a licensed TPA to actually manage that self insurance program that you have. Right now, there are only about 25 companies in the state of New Hampshire that are self-insured, and we actually manage the programs currently for six of those 25. So if you’re a very large employer with a very high premium right now, and you would like to think about being self-insured, that is something that we could help you structure.
The second type of insurance lets you just buy insurance from a carrier. You buy what’s called a guaranteed cost policy, so if your premium is fifty thousand dollars, you write them a check for $50,000 and they guarantee you that they will pay all the claims that you have that year. You have an experienced mod that’s based on the losses that you have compared to the rest of the industry, and you will pay them year after year based on what your mod and your payroll. That’s probably the most conventional way that most companies buy their workers comp insurance.
Then there’s the third alternative, which is self-insurance groups for workers’ comp insurance. There are eight self-insurance groups in the state of New Hampshire, but one is governmental in nature, so there are really seven commercial self-insurance groups in the state. It’s estimated that they make up about a third of the market for workers’ comp insurance in New Hampshire.
We manage two of those seven self-insurance groups. One is a lumber industry group, so if you work with wood of any type, if you’re a mechanized logger, a tree cutter, a lumberyard, a sawmill, or a company that makes products out of wood like doors, windows, millwork, kitchen cabinets, etc., you would fit into that group. That group currently has about a hundred members and we’ve been managing that since 2001.
The other group that we manage is a group of manufacturers. and it’s a very diverse group, including everything from food products to precast concrete and concrete blocks and everything in between. We have lots of metalworking companies, machine shops, electronics companies, etc. It’s pretty much all over the place in terms of the kinds of manufacturers that we have, and right now that group has almost 200 companies that we manage the workers’ comp for.
So for all practical purposes, as a third party administrator, we’re an in-house insurance company. We have nurses, case managers, claims adjusters, financial people, as well as safety and health or lost control people that go out and help people implement safety programs in the first place. We are managing right now about 16 or 18 million dollars worth of workers’ comp premium in the state of New Hampshire, which only has a total of about 250 million dollars in premium.