From 1 July 2000, the accident insurance reforms removed competition in the supply of workplace insurance and returned the scheme to a single public-funded model.

However, in many respects the regime created by the Accident Insurance Act 1998 remains in place. ACC offers compensation to employees under the Work Place Cover programme, whereby employees have their workplace injury claims managed by ACC. Employers pay a premium to ACC based on their industry risk profile.

The entitlements for workers' injuries covered by ACC remain as set out in Schedule 1 of the 1998 Act. The Schedule provides for compensation for the cost of treatment, weekly compensation for loss of earnings, rehabilitation, independence allowances, and entitlements and allowances arising from fatal injuries.

Employers who are covered by the Work Place Cover programme can obtain a discount on their premiums through a safety record assessment, although the compliance costs may be higher than the discount available.

For New Zealand's largest employers, the Partnership Programme (also known as the Accredited Employer Programme) is another option for the delivery of workplace accident cover through ACC. Under this programme employers are given substantial discounts on their ACC premiums, and they become responsible for payment of all minimum entitlements due to an injured employee. Certain criteria must be met before an employer is able to participate in this programme. The criteria are set out in the New Zealand Gazette.

Employers without claims management expertise will be able to contract with private companies for administrative services.

Within the Partnership Programme employers can opt for either the partnership discount plan, or the full self-cover plan. These options differ in their level of discount, and the length of time after the injury for which employers remain liable to pay workers compensation.

This is a general summary only and should not be taken as a substitute for specific advice.

Paul Smith is a partner with Fortune Manning.
Web site: Fortune Manning
Email: pms@fmlaw.co.nz
March 2001