Frequently Asked Questions

Insurers

All insurers licensed in the state of Minnesota are automatically members of the WCRA. Any insurer writing workers’ compensation insurance in the state without a valid Minnesota license is excluded from WCRA coverage.

Self-Insurers

The coverage provided by the WCRA defaults to all member entities in Minnesota not specifically excluded by federal coverage. If a member elects to fully insure and self-insure parts of their business, the member must complete a Self-Insured Location Listing form and return it with their WCRA Retention Selection form. Any member who does not submit a Self-Insured Location Listing form by December 1 each year will default to full coverage in the state of Minnesota, with the exclusion for federal coverage. If a member does not return a Self-Insured Location Listing form by the deadline, payroll for all entities covered in Minnesota will be collected and used to calculate premium, even if an insurance policy is in place.

The WCRA is a nonprofit organization and its rates contain no profit margin. The Board periodically examines the Association’s financial position relative to actual and expected costs. Excess funds may be distributed to policyholders or members, or the Board may make assessments if there is a shortfall. These actions are determined in accordance with Minnesota law, the Board’s policies, and the Association’s Plan of Operation.

Each member is required to annually report financial and loss data to be used in the calculation of a member’s premium.

Insurers

Reporting of accurate and complete prior-year financial call and related information is required annually. Insurer members failing to report data by the designated deadline will have their annual adjustment calculated using their standard earned premium at company rate level as reported to the Minnesota Workers’ Compensation Insurers Association (MWCIA). Once an annual adjustment has been made using the standard earned premium at company rate level, late submitted data will not be accepted. All insurers are required to report data electronically using the WCRA’s web-based reporting system.

Self-Insurers

Reporting of accurate and complete prior-year payroll data and related information is required annually. Self-insurer members failing to report this data to the WCRA by the specified deadline will be fined $100 per calendar day for each report past due. Late reporting will be reported to the Department of Commerce.

Self-Insurer Hybrids

Due to their unique structures, certain WCRA self-insurer members (trusts, groups, associations, and political subdivisions) with 50 or more policyholders or entities in their reporting group are unable to report to the WCRA using standard self-insurer reporting guidelines. These members have been designated by the WCRA as self-insurer “hybrids.” In recognition of the difficulty and expense that reporting as a standard self-insurer would impose on both the hybrid member and the WCRA, an alternative reporting method has been created for this segment of the Association’s membership.

The alternative reporting impacts hybrid members in three specific areas, described below. Except for these special provisions, hybrids are required to follow all other requirements established for self-insurers.

1. Annual Adjustment
   a. Report estimated calendar year payroll on an aggregate payroll basis for one year prior by class code and audited calendar year payroll by class code for the year two years prior. Significant payroll variances between the audited and estimated reporting years must be accompanied by an explanation.
   b. Provide a listing of all policyholders and their respective gross payroll in Minnesota for the audited calendar year being reported.
2. Experience Modification Factor
   a. Agree to have their experience modification factor calculated using estimated payroll data, due to the delayed reporting, and have the final modification factor trued-up during the annual adjustment process.
   b. Report self-insurer experience loss information annually to be used in the calculation of the hybrid’s experience rating modification factor consistent with all self-insurers.
3. Audits
   a. Agree to allow the WCRA to perform an annual sampling audit of policyholder data.
   b. Agree to allow the WCRA the right to audit hybrid policyholders, at the hybrid’s expense, if concerns regarding reporting practices are identified by the WCRA.

To apply for self-insurer hybrid authorization, members must submit a request in writing to Cyndi Smith at WCRA, 400 Robert Street North, Suite 1700, Saint Paul, MN 55101. The request must identify the number of policyholders or entities from whom data is annually collected (as of December 31 of the preceding calendar year) and a detailed explanation of the reasons why the member is unable to follow standard self-insurer reporting guidelines. After approval by the WCRA as a hybrid, a member may subsequently elect to return to standard reporting methods. However, the member then loses the option to switch back to hybrid reporting.

Third-Party Administrators (TPAs)

Some members prefer to outsource all or part of their WCRA reporting responsibilities. When a WCRA member contracts with a TPA to perform some or all of its business responsibilities with the WCRA, it is the member’s responsibility to assure that the TPA is reporting properly to the WCRA. Members contracting with TPAs to work with the WCRA are required to complete a WCRA Member Third-Party Administrator Authorization Agreement. The agreement notifies the WCRA that a TPA is authorized to receive information and correspond with the WCRA on behalf of a member. The authorization also provides indemnification for the WCRA by a member for any legal action that may arise out of or in connection with any violation of the Agreement by the TPA or its employees. To request a copy of the WCRA TPA form; email your request to member@wcra.biz.

As a general rule, per-occurrence coverage is provided. Where one incident results in injuries to one or more employees, one retention limit applies to the occurrence, which is treated as a single claim. Occupational disease claims are considered separate occurrences for each affected employee, and the limit applies to each employee separately. There is also an exception for affiliated insurer members of a group who sustain losses in a single occurrence. “Per-Occurrence Coverage” is discussed in the WCRA Claims Reference Guide.

A member that has selected the low retention level may purchase per-occurrence reinsurance from other organizations for losses below the low retention limit.   However, Minn. Stat. § 79.34, subd. 2, specifies that members who select the high, super, or jumbo retention levels may not purchase reinsurance from other reinsurance organizations for losses below their selected retention limit. Exceptions: The statute lists five exceptions under which this prohibition does not apply:

• A WCRA member may purchase reinsurance from another WCRA member which is controlled by or under common control with the member.
• Aggregate stop loss reinsurance may be purchased to cover the portion of claims payments below the selected retention limit for which the WCRA would not be responsible. Such purchases are permissible if the total of all claims paid or incurred by the member (i.e., claim costs on all workers’ compensation up to the selected retention limit) exceed a dollar amount or a percentage of the member’s premiums written or earned as stated in the reinsurance agreement.
• An insurer member may purchase reinsurance through a pooling arrangement with other insurers as long as the workers’ compensation reinsurance provided is incidental to participation in the pool and not a result of providing workers’ compensation insurance directly.
• An insurer member may purchase reinsurance from a captive reinsurer of a single one of the member’s insureds when the member’s insured is controlled by or under common control of the insured as long as that reinsurance is limited to all claims of the member’s insured. If the captive reinsurer subsequently makes a retrocession agreement (reinsurance purchased by a reinsurer), the retrocession must be consistent with the first three bulleted items above.
• A self-insurer member may purchase reinsurance from a reinsurer that is part of the same conglomerate or holding company as the self-insurer member. If the reinsurer subsequently makes a retrocession agreement, the retrocession must be consistent with the first three bulleted items above.

The WCRA maintains a variety of data that is available to members and public policymakers. Extensive information about serious claims, benefits, financial data, and other topics pertaining to the Minnesota workers’ compensation system is available on an aggregate basis that maintains the confidentiality of each member’s claims and activities. The membership mailing list is not available to members or nonmembers.

Minnesota law requires all insurers that are authorized to write workers’ compensation to be WCRA members. If a member does not write workers’ compensation coverage, it will not be billed for WCRA premiums.

No. Providing reinsurance protection for statutory Minnesota workers’ compensation benefits is the WCRA’s sole mission.

If a WCRA member elects to use a third-party administrator (TPA) to handle some or all of its business with the WCRA, the member must execute a WCRA Member TPA Authorization Agreement.

A self-insurer hybrid (hybrid) is a subset of the self-insurer members that have elected to report payroll and loss information in a different manner than other self-insurers due to their organizational structure. Hybrids may include trusts, groups, associations, and political subdivisions comprised of 50 or more policyholders. Members may apply to the WCRA to be designated as a hybrid. If approved by the WCRA, a member must execute and return to the WCRA a Hybrid Authorization Agreement prescribing special reporting terms and audit schedules for the hybrid. Except for special provisions for hybrids in the WCRA Premium Operating Rule, hybrids are required to follow all other requirements established for self-insurers.

All WCRA self-insurer members participate in the experience rating plan. The WCRA calculates a calendar year experience rating modification factor for each self-insurer member, which is used to adjust the self-insurer’s exposure base for that year. The same factor is applied to the self-insurer’s estimated and actual exposure base for the calendar year.

The self-insurer’s experience rating modification factor is based on the Revised Experience Rating Plan developed by the National Council on Compensation Insurance (NCCI) and utilized by the Minnesota Workers’ Compensation Insurance Association (MWCIA) for Minnesota workers’ compensation insurers.

Self-insurer members are required annually to report loss data on the WCRA Experience Rating Loss History reporting site.

Some self-insurer members may not have sufficient or correct payroll or loss data to allow calculation of an experience rating modification factor. In these cases, the WCRA will assign an experience rating modification factor of 1.05 or add .05 (whichever is greater) for the first year in which insufficient data is reported and increase it by .05 for each subsequent year. If after three consecutive premium years a private self-insurer member does not supply the required data, the WCRA will notify the Minnesota Department of Commerce and recommend that the member’s workers’ compensation self-insurance authority be reevaluated. If a public self-insurer member does not supply the required information after three years, the WCRA will notify the state auditor or legislative auditor, as appropriate, of the member’s failure to comply with these reporting requirements.

This information allows the WCRA to calculate and bill estimated premiums for the upcoming coverage period. If the estimated premium differs from the actual premium incurred, the difference is billed or credited the following August and appears on the member’s September statement.