The ONET Business Model
The authors of Oregon's statutes that regulate ONET crafted a tried and true operating structure modeled after that of an insurance company. Tested over 150 years and adopted by every State in the Country, the insurance company model provides for both shareholder value and protection for covered participants. So, it is no surprise that ONET's operations are more like than unlike that of an insurance company. Here are just a few of the similarities:
- Receives its certificate of authority form the State
- Participates in all Oregon WC Programs: Ded Plan, ERTW, Preferred
Worker, etc.
- Governed by a Board of Directors
- Affiliated with the National Council on Compensation Insurance
(NCCI)
- Purchases reinsurance in the form of excess-of-loss insurance
- Uses actuarially-based methods to determine funding needs
- Maintains member-level coverage anniversary dates
- Secures annual actuarial statements
- Produces an annual audited financial statement
- Uses NCCI loss costs in determining classification rates
- Maintains each member's Experience Modification Factor
Notwithstanding these similarities, trusts are different in some ways. It is these differences that set trust participation apart from the purchase of insurance and make it such an attractive alternative for Oregon employers. Here are four major differences:
- ONET operates much like a nonprofit organization
- Members have real input on the merits of questionable claims
- Capital funding comes from member-employer contributions
- ONET is owned and governed by its members