Becoming self-insured

Self insured employer status is available to those employers who excel in occupational health, safety and welfare (OHSW) and in the management and rehabilitation of their injured workers claims. It provides employers with greater flexibility and an opportunity to minimise overall costs. However, a decision to apply for self insured employer status involves considerable thought.

Self insurers remain subject to the Workers Rehabilitation and Compensation Act and must provide full benefits to their employees in accordance with the Act.

Employers wishing to apply for self-insurance will need to complete the Application for registration as an employer form.

Before you apply

Before applying for self insurance you should note some key points, namely:

• An application fee is payable.
• On attaining self insurance an employer becomes directly responsible for all new claims from its workers, and must enter into a contract with WorkCover to manage any existing claims.
• WorkCover must consider whether the employer is large enough to be an effective self-insure employer. WorkCover considers that a significant level of employment is required for an employer to meet the self-insurance performance standards (including the carrying of overheads and expertise necessary in being a self-insured employer) on an economic basis over the medium to long term. In accordance with WorkCover policy, employment at the level at or above 200 full-time equivalent workers will be considered to be a significant level of employment for this purpose.
• The applicant must meet a set of financial criteria to establish its ability to meet claims liabilities. It would be unusual for an employer with net tangible assets of less than $50 million to be considered acceptable.
• The self insurer must provide, at its own cost, annual actuarial reports, financial guarantees, excess of loss insurance and transmit claims data to WorkCover.
• A self insurer must pay a levy as a contribution to the overheads of the WorkCover scheme and this includes a component to cover the liabilities of self insurers in the event of insolvency. This levy is a small percentage of what the employer would pay if it was not self insured.

To apply

The first step of an application is to contact WorkCover's, Self-insured Unit, to arrange a meeting.

Basic WorkCover policies on self insurance are set out in the Code of conduct for self-insured employers under the WorkCover Scheme.

If you have any questions about the information provided contact us on the feedback form.

WorkCover’s Natural Consequences Model (NCM) has been in place since 1 January 2006.

The NCM is a model which provides guidance on the terms of renewal or granting of a self-insurance registration in South Australia. It also describes the additional performance expectation necessary to achieving a maximum renewal outcome.

In simple terms the model is designed to encourage superior performance by applying in the form of an additional levy, increased oversight by WorkCover and reduced term of self-insurance where benchmarks are not reached.

WorkCover has recently revised its NCM which will come into effect from March 2012 and therefore impact all employers who are seeking to apply for self-insurance or seeking a renewal of their self-insurance registrations.

WorkCover is in the process of updating its Code of conduct for self-insured employers under the WorkCover Scheme (the Code) to reflect changes to the NCM.

For your immediate reference please refer to the Overview of the Natural Consequences Model and the Revised Superior Performance Indicators.

If you have any questions about the information provided contact us on the feedback form.

Self-insured employers manage and are liable for their own claims. Employers seeking registration as a self-insured employer, or seeking to renew self-insured employer registration, are expected to comply with all relevant parts of the Code of conduct for self-insured employers under the WorkCover Scheme. Crown agencies must comply with all relevant parts of the South Australian Public Sector Code of Practice for Crown Self-insured Employers.

The Codes offers a framework of policies and procedures for administering your legal requirements in respect of self-insured employer status.

WorkCover performance standards for self-insured employers provides a framework for employers and workers to get the best results from their (OHSW) and rehabilitation and injury and rehabilitation management.

The performance standards relate to the design, implementation and effectiveness of OHSW and injury and rehabilitation systems within a continuous improvement framework.

The WorkCover evaluator will undertake an evaluation of the applicant's conformance with the performance standards. During the evaluation the applicant must aid the WorkCover evaluator in providing access to system documentation, plus human and physical resources.

Evaluations can also be conducted at other times if we think this is warranted.

If you fail or refuse to correct non-conformances we may decide to:

• not grant or renew the self-insurer registration
• reduce the period of registration or
• take other action.

In 2005 a multi-jurisdictional working party of regulatory bodies under the Heads of Workers Compensation Authorities was formed to develop an occupational health and safety audit program and set of guidelines that were agreed at a national level. The National Self-Insurer OHS Audit Tool - User Guide and Workbook is an outcome of that process.

Private national self-insured employers may elect to have their OHSW system evaluated against the National Self-Insurer OHS Audit Tool - User Guide and Workbook, however WorkCover will still need to evaluate the self-insured employer's injury management system against the WorkCover performance standards and the Natural Consequences Model will still apply.

Self-insured employers who elect to be evaluated against the National Self-Insurer OHS Audit Tool - User Guide and Workbook are required to complete a self-audit using the Evaluation Practice Manual.

Further information relating to the Natural Consequences Model and Evaluation Practice Manual are outlined in the Code of conduct for self-insured employers under the WorkCover Scheme.

If you are a private national self-insurer and wish to obtain more information in relation to the National Self-Insurer OHS Audit Tool - User Guide and Workbook call WorkCover on 08 8233 2006.

National Self-Insurer OHS Audit Tool - User Guide and Workbook [1.57Mb]

WorkCover, under Schedule 1 to the Workers Rehabilitation & Compensation (Claims & Registration) Regulations, collects claims data from self-insured employers to enable the analysis, information exchange, performance evaluation and national comparisons of claims statistics.

Schedule 1 data

Since 1987 SafeWork Australia have collated annual claim statistics from all workers compensation jurisdictions throughout Australia.

As workers compensation benefits and entitlements vary between states and territories, the National Data Set for Compensation-based Statistics (NDS) was developed to allow uniformity and to allow for national comparison of this data.

Data Collection

Self-insured employers are required to transmit their Schedule 1 Data to WorkCover on a fortnightly basis via our secure site.

Explanation of the required format, in which self-insured employers are to provide this information to WorkCover electronically, is documented in the Self-Insurer EDI Technical Specification.

For a comprehensive list of data included in the NDS visit the SafeWork Australia website

Statistical coding

WorkCover classifies workers compensation injuries and/or diseases for the NDS from the information provided by the self-insured employer via Schedule 1 Reporting.

Once a claim has been created at WorkCover, it is then coded using the Type of Occurrence Classification System (version 3), and the Australian & New Zealand Standard of Occupations. Any claims containing insufficient information for coding purposes are sent back to the Self Insured Employer by the Statistical Coder on a monthly basis with a request for additional information.

For a comprehensive list of data included in the Type Of Occurrence Classification System (version 3) visit the SafeWork Australia website.

Further assistance

If you require any further assistance on claims data please contact the self-insured email address.

Lump sum

WorkCover records data on Section 42, 43 and 44 payments made. The information you provide is entered onto our database and is used:

• for statistical purposes
• as the basis for historical information (when requests are made for notification of previous lump sum amounts paid to a worker)
• to reconcile payment data reported on individual claims.

Use WorkCover's Notice of Lump Sum Determination Return (NEW) for determinations made after 1 April 2009 or use our Notice of Lump Sum Determination Return (OLD) for determinations made before 31 March 2009. You must ensure that all sections are completed on the Notice of Lump Sum Determination.

WorkCover operates a secure environment to allow the exchange of certain confidential information with self insurers.

The elements Self Insurers may access through this site are:

• Delivery of electronic WorkCover Medical Certificates (eWMCs) provided by doctors in respect of the employer's workers.
• Submission of data requirements by the self insurer to WorkCover under the schedule 1 requirements.

Secure access

To access this secure site, you will need to have an official WorkCover identification code and password. To obtain the identification and password you must submit the form properly authorised by the self insured employer.

Please note: the identification and password are unique to the user and must not to be shared. If you leave the employ of the self insured employer, you must notify WorkCover to allow the access codes to be cancelled.

If you have any questions about the information provided contact us on the feedback form.

SISA is an incorporated association which represents most of South Australia's largest self-insured employers from both private and public sectors. For more information visit the SISA website.