In the Mahler exposure base problems, it is written that payroll is not an accurate reflection of the exposure to medical losses. However, I am having a hard time believing this because these same problems write that payroll reflects changes in manhours and since manhours worked reflects the exposure to medical losses, therefore, I would think payroll reflects the exposure to medical losses.
Logic:
An argument for using manhours worked as an exposure base is that it reflects the exposure to medical losses (as manhours worked goes up, expected medical payments go up).
Therefore, if payroll increases when manhours increases, and when manhours increases, expected medical payments increase, then when payroll increases, expected medical payments increase.
Isn't this just plain ol', good fashioned, vanilla, missionary-position-eque logic?
Logic:
An argument for using manhours worked as an exposure base is that it reflects the exposure to medical losses (as manhours worked goes up, expected medical payments go up).
Therefore, if payroll increases when manhours increases, and when manhours increases, expected medical payments increase, then when payroll increases, expected medical payments increase.
Isn't this just plain ol', good fashioned, vanilla, missionary-position-eque logic?
Workers Compensation Payroll vs Manhours worked
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