The ER has an aggregate excess (stop loss) workers comp policy. Does the ER receive credit against the security deposit?

The ER has an aggregate excess (stop loss) workers comp policy. Does the ER receive credit against the security deposit?

• A. No
• B. Yes
• C. No, aggregate excess is not legal
• D. Yes, Aggregate excess is legal

Answer: (A)

Security deposits for self-insured workers’ comp are collateral to ensure the employer can pay future benefits, even if other funding sources falter. An aggregate excess (stop-loss) policy is there to reimburse the employer for losses that exceed a set retention; it does not provide cash to the state or directly reduce the employer’s required collateral. Because the deposit guarantees funds for ongoing claims independent of whether a stop-loss policy exists, no credit against the security deposit is allowed simply because of aggregate excess coverage.

Security deposits for self-insured workers’ comp are collateral to ensure the employer can pay future benefits, even if other funding sources falter. An aggregate excess (stop-loss) policy is there to reimburse the employer for losses that exceed a set retention; it does not provide cash to the state or directly reduce the employer’s required collateral. Because the deposit guarantees funds for ongoing claims independent of whether a stop-loss policy exists, no credit against the security deposit is allowed simply because of aggregate excess coverage.