Our recommendations to the Minister
What we asked
We asked you about our proposal for the 2019 to 2021 levy period to make pricing changes to the Accredited Employer Programme (AEP) for the 2019-2021 levy period.
What you told us
- More than half of submitters on this proposal told us proposed fee changes appear reasonable and that any decrease in fees is welcomed to help with the costs of running a business
- Submitters disagreeing with the proposal were generally responding to the design of the AEP, not the proposed fee changes. They're disappointed primarily with the programme’s eligibility, telling us it's unfair that AEP is only available to large employers, and not smaller businesses.
The ACC Board recommends:
- Implementing the following pricing changes to the AEP for the 2019-2021 levy period:
- decrease the administration fee from 2.6% to 2.5% of the Work levy
- increase the unallocated primary health care cost fee from 1.2% to 1.4%
- decrease the bulk-funded public health care cost fee from 3.9% to 3.8%
- increase the average discount in the Partnership Discount Plan one-year claim management option from 50.0% to 53.0%
- increase the average discount in the Partnership Discount Plan two-year claim management option from 57.1% to 60.6%.
We acknowledge the feedback received for this proposal. More than half of the submissions supported the proposed changes, while those opposed were generally providing feedback on the design of AEP, rather than the pricing changes.
Based on the balance of the support received we are recommending implementing the proposed AEP pricing changes. However, we'll undertake further consideration of all feedback and suggestions received over the next year and use it to inform our proposals for AEP in 2020.
AEP was designed and specifically targeted to larger employers due to the programme’s basic nature of ‘self-insurance’ where only larger employers have the capability to carry the associated risk.
For employers to effectively carry out the function of ‘standing in ACC’s shoes’, they need significant resources. Large employers are more likely to have these resources, and the level of risk transferred to the employer under the current scheme would place an unacceptable level of risk for smaller employers.
We'll have a decision from the Government on our recommendations in December.
Our original proposal
Accredited Employers are those who choose to self-manage their own claims, injury and rehabilitation services for their employees.
If you want more detail on this topic and the thinking behind what we proposed, see our full consultation document.