How Does Self-Insurance Work?

In a group Self-Insurance program a group of employers pool the money they would otherwise pay as premiums. The fixed or administrative costs and the variable costs or paid claims are funded from this pool of money.

Fixed costs include: Program Administration, Claims Administration, Safety/Loss Prevention Services, Marketing and Sales, Actuarial and Accounting Services, and Specific and Aggregate Excess Insurance. Variable costs include: actual dollars paid on claims, Self-Insurers Security Fund and Special Compensation fund assessments.

Whatever is not paid in fixed costs or variable costs is surplus and is returned to the membership - this is the fundamental difference between traditional insurance programs and Self-Insurance programs.

Why Self-Insure?

Group Self Insurance is not a new concept in Minnesota, as it dates back to 1982. Since Self-Insurance was approved by the Minnesota Department of Commerce, the number of groups has grown to 28. Self Insured Workers’ Compensation represents about 25% of the total Workers’ Compensation dollar in Minnesota. What are the benefits of self insuring?

Overall, the businesses that have chosen to Self Insure their Minnesota Workers’ Compensation with an approved Group have found they have total costs that are, on average, up to 15% less than the “Standard Market”.

• Have more control of their claims costs and claims outcomes
• Traditional Company = Profit for the Company
• Self-Insurance = Dividend to YOU

Want to know more?

TRIFAC Workers’ Compensation Fund
PO Box 20025 Bloomington, MN 55434
Local: 800-211-6389
Toll free: 952-884-9833
Email: info@trifacworkcomp.com