What is a self-insured group?
Self-insured groups (SIGs) are regulated alternatives to traditional insurance programs that are approved by the State of Michigan to provide workers compensation coverage to member employers. Under these plans, several employers that operate the same kinds of businesses and belong to the same trade organizations band together to obtain approval for self insurance as a group.
A SIG is made up of the following “parts”:
Industry-specific members who share a common Standard industry Code (SIC)
A Board of Directors
An Administrator
A Claims Administrator
Safety and Loss Control services
Accountants
Excess Insurance coverage providers.
The HSAWCF is reviewed, approved and monitored by the State of Michigan Workers Compensation Agency Self-Insured Programs Division. Just as the HSAWCF is reviewed and approved, each member of HSAWCF is similarly reviewed to ensure that each employer meets the requirements of membership. The HSAWCF is a shared-risk pool with joint and several liability among members.
What are the benefits of a self-insured group?
Because the Fund is self-insured, losses are not pre-paid to an insurance company. The member premiums are held in reserve to pay the claims, which means that interest is accruing immediately on behalf of the members. Members receive annual dividends based on funds available after expenses are paid and with the approval from the State of Michigan.
Members receive annual dividends based on dollars left after claims are paid, and on investment income, which comes from the Fund’s interest-bearing accounts.
On average, members of Human Service Association receive 25% to 50% in dividend
refunds annually.