Risk-Tex, Volume 3, Issue 1, June 2000 Page: 2
6 p. : ill.View a full description of this periodical.
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SORM considers ways to control costs
(Continued from page 1)
SORM's original enabling legisla-
tion required it to establish specific
cost allocations for a group of agen-
cies that generate the bulk of work-
ers' compensation claims. The pro-
vision would have required those
agencies to reimburse 100 percent of
the cost of claims that exceeded their
allocation. The enabling legislation
also required SORM to develop a
program to reward agencies that
improved safety and reduced claims
by allowing them to share in the
resulting savings. Unfortunately,
statutory conflicts and other techni-
cal problems made these provisions
unworkable, and the 76th Legisla-
ture repealed them in 1999.
The new "risk-reward" proposal
currently under study is modeled on
an arrangement used by the
University of Texas System, which
is not covered by SORM, to allocate
workers' compensation costs among
its component institutions. Each
year, the UT System uses a formula
that reflects payroll size, claims
costs, and injury frequency rates todetermine how much to charge each
component institution for workers'
compensation coverage and risk
management services. The UT
System also uses a portion of the
revenue in its workers' compelsa-
tion fund to award grants to compo-
nent institutions that do a good job of
reducing losses and controlling
costs. Grant funds are usually award-
ed for specific purposes, sucr as
safety training courses or the acqui-
sition of safety equipment.
SORM may be able to borrow
some of the features of the UT
model. For example, SORM may be
able to use a modified version of the
UT formula to allocate the cost of
workers' compensation coverage
among its client agencies. Under this
approach, SORM staff would work
with an actuary to determine an iual
"assessments" for each client
agency. Then, instead of appropriat-
ing a lump sum to SORM each lien-
nium to pay the estimated cost of
workers' compensation claims, the
Legislature could divide those funds
and re-appropriate them to individ-ual agencies to cover the cost of the
annual assessments.
At the end of every fiscal year,
SORM would recalculate each
agency's assessment based on its
claims experience. Annual assess-
ments for agencies with good
records could be reduced or remain
the same, while assessments for
agencies with poor records could
increase. Agencies with increased
assessments would have to transfer
funds from other parts of their budg-
ets to pay for the increase or seek an
additional appropriation from the
Legislature. In addition, depending
on how the new arrangement was
structured, agencies that received an
assessment that was lower than the
preceding year's may be able to
retain the savings and use it for other
purposes. The Legislature could also
authorize SORM to reward well-per-
forming agencies with grants for
safety training or equipment.
The new "risk-reward" proposal
potentially offers a number of signif-
icant advantages over the current
(Continued on page 4)Information ................................................ .......... ............... 512-475-1440 or 877-445-0006
Ron Josselet. Executive Director .............. Ron. JosseletWoag.state.tx.us..........1...................512-936-1515
Jonathan Bow, General Counsel............................................Jonathan.Bow@ ?ag.state.tx.us........................... 512-936-1502
Janine "Red- Balacki, Deputy General Counsel ..................Janine. Balackiii oag.state.tx.us....................5......512-936-1508
Stuart B. Cargile, Fund Accounting AMgr...............................BradCargilea>cag .state.Ix.us..........................512-936-1523
Bob Clarke, Interim Risk Assessment & Loss Prev. lgr...... Robert.Clarkea ag.state.tx.us........................512-936-1566
Robin Cline, Special Assistant to the Executive Dir .............Robin.Clinedoag.state.tx.us............................... 512-936-1535
Peggv Yasin, Information Resources Aigr .............................Peggs. Yiasin(oag.state.tx.us ...........................512-936-1571
Gail Mc Atee. Agency Administration Mgr ............................Gail.Ntc Atee(oag. state.tx.us..........................512-936-1501
101 McCandless, Agency Outreach & Training Mgr.............JVl.McCandless'lvoag.state.tx.us.....................512-936-1460
Gary Pay ne. Fiscal Management & Planning Igr ..............GaryPay nea oag.state.tx. us............................512-936-1500
Debbie Starks, Medical Management Mgr.............................Debbie. Starks@ aag.state.tx.us.......................512-936-1480
OFFICE HOURS: 8 A.M.-5 P.M. MONDAY THROUGH FRIDAY
MAILING ADDRESS: STATE OFFICE of RISK MANAGEMENT, P.O. 30X 13777. AUSTIN. TX 78711-3777
FAX NUMBERS: 512-472-0228 512-472-0234 512472-0237
VISIT OUR WEB SITE AT WWW.SORMI.STAT?.TX.lS2 RISK*T EX Volume III, Issue 1
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Texas. State Office of Risk Management. Risk-Tex, Volume 3, Issue 1, June 2000, periodical, June 2000; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth1589448/m1/2/?q=Lamar+University: accessed June 8, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.