- Fund members pay premiums into the Fund. Premium is calculated based on the payroll and loss experience of the member.
- The Fund invests the premium until it’s needed to pay claims.
- Approximately 25% of premiums goes toward operating expenses and the purchase of excess insurance.
- The remainder of collected premium dedicated to member claims.
- Premium not used to pay Fund expenses or claims is returned back to the members, along with any investment income earned.
Participants of the Fund must be a member of a Michigan ABC Chapter. Non-members may receive a proposal from the Fund. Upon joining the Fund, the business would then be required to join an ABC Chapter. To be eligible, a business must serve in the construction industry as a contractor, subcontractor, or a supplier and must meet underwriting review based on loss history.
The Fund covers a wide variety of classifications; however, certain exposures such as roofers, steel erectors, demolition contractors are not eligible.
History of the Fund
The Associated Builders and Contractors of Michigan Self-Insured Workers’ Compensation Fund (ABC Fund) was established May 1, 1995 as a way to control the long-term workers’ compensation costs of the Associated Builders and Contractors of Michigan members. It is endorsed by all three chapters of ABC Michigan.
Today, over 500 of the finest skilled contractors from every corner of Michigan rely on the ABC Fund for their workers’ compensation coverage.
How the Fund Works
The ABC Fund, administered by RPS Regency, is owned by its members and operates similar to an insurance company – providing the same employer protection and paying claims to employees injured on the job. The Fund saves members money by operating with reduced overhead, aggressively managing its claims and through industry-specific loss control efforts. The money that is not used to pay for claims, and any investment income, is returned back to the members over time.
As the Fund ages, members receive profit returns from a number of Fund years. Also, the ABC Fund is protected from large losses by the purchase of excess loss insurance, further enhancing stability and profitability. Over the Fund’s history, members have received profit returns equal to 46 percent of the premiums paid.