The 3rd qtr press release says " Adjusted SG&A was 35.5% of net sales. The increase was primarily driven by 131 basis points of higher labor, medical and insurance claims." Can someone explain? It mentions higher claims not premiums, so is this implying w/comp or auto accident claims & settlements? Do "insurance claims" include unemployment claims due to layoffs and/or any severance paid to those people? I'm assuming it isn't employee regular medical claims since they are filed with private ins company elected during open enrollment and the company & employee prices for those premiums wouldn't fluctuate mid year. Just curious what this meant. Thanks.
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The health insurance is selfl-funded. Anthem only manages, but AAP pays the claims when the account is trued up.
I heard from someone in risk management that claims being paid out were off the charts. Makes a lot of sense when you hear what is going on behind the curtain.
From my perspective in H/R, much of this is being driven by large payouts from at fault vehicle accidents and the dollars being awarded in medical liability judgements. In addition, there are more to come as those currently being settled average 2-3 years old. This is also what is driving the elimination of our fleet and the associated liability risk.