Changes we are proposing for Accredited Employers

Businesses in the Accredited Employers Programme (AEP) are authorised by ACC to manage and pay the claims and rehabilitation costs for their employees’ work-related injuries. 

The Accredited Employers Programme (AEP) is best suited to large employers who: 

• pay ACC levies of more than $250,000 per year.
• are able to manage claims and pay for the costs of treatment and rehabilitation for their employees’ work-related injuries (i.e. in place of ACC). 

They can choose to join one of the following two plans and manage claims for 1 to 4 years after the cover period: 

Proposed changes for FY25 to FY28

Each levy round ACC reviews the factors used to calculate the levy charged to accredited employers.  This ensures the levies charged consider changes in cost of treatment, the cost of running the ACC scheme and changes in injury frequency and severity.  The table below sets out the values of the factors proposed to be used by ACC in financial years 2025/26, 2026/27, 2027/28. 

The reasons for the change in the factors over the last three years are set out in the sections below. 

Administration costs 

An increase in staff associated with the Accredited Employer Programme and improved accuracy of the allocation of administrative costs to the programme have combined to increase the overall cost for the programme. 

The underlying levy has grown faster than administration costs, so we propose to decrease the administration fee from 2.3% to 2.0% from 1 April 2025. 

Bulk-funded public health care cost 

Accredited employers are expected to contribute the same proportion of bulk-funded health care (BHC) costs as other employers as they are not directly billed for ambulance services or for acute treatment provided by hospitals for accident-related injuries.   

We use the following formula to determine the factor used to fund these costs through the AEP levies:

From 1 April 2025, we propose to increase the BHC factor from 4.6% to 5.2% as set out in the table below. 

Unallocated primary health care cost contribution 

Some of the workplace injury costs we pay are short-term medical costs that can’t be attributed to individual employers. This is because some workers don’t or can’t provide employer-specific information when they seek treatment or other support for work-related injuries. 

While we do our best to allocate all claims to employers, there is a small proportion that it is not possible.  We spread the cost of these unallocated claims across all employers.  For accredited employers their share of these costs is contained in the unallocated primary health care costs factor. 

From 1 April 2025, we propose increasing the unallocated primary health care cost factor from 1.3% to 1.5%. This increase is required because there has been an increase in the proportion of unallocated claims over the past three years and we anticipate this continuing for the next three years.

Stop loss and high-cost claim cover 

Stop loss cover protects accredited employers against unexpectedly high total injury costs during a cover period (e.g. if there are a high number of work-related accidents within a very short timeframe).  High-cost claim cover can be purchased to limit the employers exposure to costs from any single event. 

Stop loss cover is compulsory for employers in the FSC and optional for those in the PDP.  

PDP employers who opt for stop loss cover, pay for claim-related costs during the cover period, and a selected claim management period of one to four additional years, up to their stop loss limit.  

ACC pays any costs incurred by the employer above the stop loss limit until the clams are handed back to ACC. 

The maximum stop loss limit is currently 250%, and the minimum 160%, of an employer’s expected claims costs. We calculate these expected costs using the employer’s standard Work levy before any discounts are applied. 

The table below shows the calculated maximum and minimum stop loss limits as percentages of the Work levy. 

The change in fees for stop loss and high-cost claims cover vary by the selected limits. However, the average impact for employers currently in FSC is a 15% increase in the stop loss and high cost claims cover fee. The average impact for employers currently in PDP is a 17% reduction in their stop loss fee.  

The following factors have increased the cost of the covers: 

• General inflation 
• Longer claim durations since last consultation 
• Better recognition of the cost of very large claims, based on recent experience 
• The inclusion of an allowance for claims handling expenses.  

Partnership Discount Plan (PDP) discount levels 

The total levies employers in the PDP pay depends on their relevant industry classification unit and the length of plan they choose (1 to 4 years).  As the severity of accidents varies by industry, PDP discounts depend on each employer’s levy risk group e.g. an industry with a high percentage of low-cost claims will receive a larger discount because it will have contributed a higher proportion of payments during its claims management period.