Large Deductible Plans

A Fully-Insured Rating Option

Deductible plans are a form of self-insurance. Accounts paying $500,000 or more for workers' compensation should consider Large Deductible plans as an option.

In this type of plan, AmeriHealth issues a workers' compensation policy. The policy issued complies with all legal and statutory requirements. These types of plans allow large insureds to self-insure their workers' compensation risks without having to satisfy burdensome filing requirements for self-insurance.

The insured is responsible for the first portion of any loss, with the carrier providing excess coverage over the deductible amount and possibly for all losses above a certain aggregate. For example, AmeriHealth could provide coverage for any one loss above $250,000 and for all losses above $1,000,000 in total. The insured funds an account (loss fund) to pay losses and the insured reimburses the fund as losses are paid. The insured must collateralize, usually by letter of credit, an amount approximately equal to the difference between paid and ultimate losses.

As with any loss sensitive plans, these Large Deductible plans are not advised for accounts with loss experience that is inconsistent or unpredictable.