Appendix 2 — Current State of AEP

Accreditation

Only an employer that ACC has accredited can participate in AEP. When an employer applies to be in AEP, ACC first checks that they meet the financial strength requirements for accreditation then depending on the outcome may have an impact on their product choice. These products include:

• Partnership Discount Plan (PDP) – an AE accepts claims management and financial responsibility for injuries that were suffered during the cover period until the end of their nominated claims management period. The current available CMP options are 1 or 2 years after the end of the cover period. Any continuing claims at the end of the claims management period are transferred back to ACC, and the AE has no further liability for those claims.
• Full Self Cover Plan (FSC) – an AE accepts claims management and financial responsibility for injuries that were suffered during the cover period until the end of their nominated claims management period. The current available CMP options are 2, 3 and 4 years after the end of the cover period. At the end of the CMP, claims are handed back to ACC, with the AE making a one-off payment to cover the continuing liability for active claims. The AE is also regularly invoiced for the costs of any claims that are reactivated or are identified after the end of the CMP.
• To limit the exposure of AEs to major workplace-related injury events, Stop-Loss Cover is available to limit their liability. Stop-Loss Cover is mandatory for FSC employers and optional for PDP employers.
• In addition to Stop Loss Cover, FSC employers have the option of purchasing High-Cost Claim Cover (HCCC). This cover provides financial protection against unexpectedly high claim costs for injuries resulting in one or more claims due to any one event. This cover is provided for claim costs in excess of $250,000, $500,000, $750,000, $1,000,000, $1,500,000, $2,000,000 or $2,500,000. This cover reduces an FSC employer’s financial exposure and thereby reduce barriers to an employer’s participation in AEP.

ACC also assesses the employer’s systems, processes, and capability against its Audit Standards for accreditation, as follows: 

• Safety management practices requirements – the adequacy of the employer’s health and safety management systems and processes, and 
• Injury management requirements – the adequacy of the employer’s injury management systems and processes to make decisions on and manage workplace injury claims.

ACC deems an AEP employer to have met, or not met, each of these 2 requirements at one of the following 3 levels: 

• Primary – programme entry level requirement. 
• Secondary – consolidation of good practice. 
• Tertiary – framework for continuous improvement of good practice. 

Employers must be deemed to be at least at Primary level, across both safety management practices requirements and claims and injury management requirements, to meet accreditation requirements to enter AEP. ACC can then enter into a one-year cover period agreement with them.

To maintain accreditation ACC: 

• audits each AE: 
  • every year at the Primary or Secondary Level and bi-annually if Tertiary level is maintained against the Audit Standards safety management practices, and injury management practices,
  • annually against the Audit Standards injury management practices requirements
• reviews several pre-selected employee claim files and conducts case study reviews (including 1:1 interviews with claimants) to check the timeliness of the AE’s cover decisions and injury management and rehabilitation services.
• conducts focus group interviews to validate safety management practices and subsequent injury management for claims with management and employees.

Additionally, an AE is responsible for complying with legislation, maintaining health and safety standard(s) relevant to their industry, and continually improving their health and safety systems and processes. 

Third-party administrators 

If an AE wants to use a third-party administrator (TPA) to provide some or all services to injured employees, ACC requires the employer to provide their draft TPA agreement to ACC in advance. To support this, ACC also audits the 3 TPA’s injury management systems and processes annually. Approximately 120 AEs use a TPA to manage their claim files.

Monitoring and reporting

Claim file monitoring

ACC undertakes monitoring of a selection of claim files for all AEs. This is undertaken every 2 to 3 years. Additional out-of-cycle monitoring can take place:

• always when an AE moves from a TPA to self-management.
• sometimes when an AE moves from self-management to a TPA, or changes TPA provider.
• as required, where there are concerns with the performance of an AE (for example, if an issue is raised in an audit or through claim file monitoring).

When monitoring claim files, ACC looks in detail at the employer’s claims management and administration, cover decisions, appropriateness of rehabilitation, and payment of entitlements. These are measured against the claims and injury management elements of the Audit Standards, and the relevant sections of the Accident Compensation Act 2001.

A report assessing the actions undertaken on each file is produced which might be concluded by providing a series of recommendations for the employer to consider and required actions which must be undertaken. Consequently, the employer must provide evidence to ACC that the required actions have been completed.

ACC also undertakes regular monitoring of an AEs understanding and capability of the fundamentals of weekly compensation. A report is produced outlining their level of capability and any concerns, plus an assessment of the accuracy of calculations. Recommendations on improvements are provided and followed up as necessary.

Performance reporting

Once in AEP, employers are required to submit monthly data about the claims under their management.

Employers receive an annual Employer Performance Report covering the last completed 7 years with information about the levies they paid, how they are performing in claims management (number of claims and entitlements paid), and some benchmarking against ACC and the risk group they belong to.

<Appendix 1 — Implementation | Appendix 3 — How consultation proposals reflect co-design processes and MBIE review findings >