Section R20-5-1118. Guaranteed-Cost Plan; Formula; Eligibility; Necessary Information for Plan

A.      The Division shall calculate the net taxable premium under a guaranteed-cost plan as follows: [(payroll multiplied by the applicable worker’s compensation rate) multiplied by (the experience modification rate) minus the premium discount].

B.       A self-insurer may use the guaranteed-cost plan if:

1.        The   self-insurer  has  an   annual  net  taxable  premium exceeding $100,000; and

2.        Uses an experience modification rate calculated as fol- lows:

a.        In the first year of self-insurance, the experience modification rate is 1.0;

b.        In the second and third years of self-insurance, the Division calculates the experience modification rate based upon the loss data accumulated by the self- insurer during its term of self-insurance; and

c.        In the fourth year of self-insurance and all following years, the Division calculates the experience modifi- cation rate based upon the most recent three years of loss data provided on the Self-insured Injury Report, excluding the most recent year.

C.      A self-insurer shall provide the following information in sup- port of the guaranteed-cost plan:

1.        Self-insurer’s Payroll Report,

2.        Self-insurer’s Medical Report,

3.        Self-insurer’s Injury Report, and

4.        Self-insurer’s Quarterly Tax Payment form.

Historical Note

New Section made by final rulemaking at 11 A.A.R.

1008, effective April 4, 2005 (Supp. 05-1).