The Schweitzer administration is posing tough questions to the state workers' compensation fund, seeking more details on why state government's work-comp insurance rates have doubled this decade.
"The rise of the premiums is an issue that I've been mindful of for some time," said David Ewer, Gov. Brian Schweitzer's budget director. "I'm skeptical about our premiums, unless we can be convinced that we can agree on what the premium is based on."
Ewer sent a pair of strongly worded letters last month to Montana State Fund President Laurence Hubbard, asking for an extensive list of data on work-comp claims and pricing for the state's insurance.
Work-comp coverage insures against the cost of on-the-job injuries, and pays wage losses and medical expenses for injured workers.
Ewer asked for the information by the end of this week, and Hubbard said Tuesday the State Fund will provide it - as long as it doesn't violate the privacy of injured workers who are the subject of claims.
Hubbard said he thinks the State Fund has been up-front about why insurance rates for the state have doubled since 2000, but that the fund is happy to provide more information to state work-comp managers.
"Every customer deserves to know the basis of their work-comp costs," he said. "I'm totally committed to the success of state agencies taking control of their work-comp experience."
Work-comp insurance premiums for the state have gone from $6 million in 2000 to $18 million last year. The state is required by law to buy its work-comp coverage from the State Fund, a quasi-government agency that writes insurance for 27,000 businesses in Montana.
Hubbard said more than a third of the state's increase is because of higher state payrolls, which are the basis for premiums and wage-loss claims.
The actual rate for the state has doubled since 2000, from about $1.50 to $3 per $100 of payroll.
They hit a high of $3.44 per $100 of payroll in 2007, and have declined 12 percent since then.
Average rates for all other businesses served by the State Fund increased only 40 percent since 2000.
Hubbard said the state's rates increased substantially from 2000 to 2007 because they had been lower than the cost of the state's work-comp claims, and the State Fund needed to bring rates and losses into sync.
He also said the severity of injuries by state workers has increased in recent years.
Lance Zanto, chief of the state's Workers Compensation Management Bureau, said the state not only wants more information on pricing, but also information that could help find other work for those who are injured.
"What we really want to know is, from the medical standpoint, is what can this person do?" Zanto said. "We just want to know what the person can do, so we can get them back to work."
Hubbard said some of that information may be protected by privacy laws.
Ewer said the Schweitzer administration also wants to examine the information with an eye toward considering other options, such as changing state law so the state doesn't have to buy work-comp insurance from the State Fund.
The state university system, for example, is self-insured for work-comp. Its costs in fiscal 2009 were $1.38 per $100 of payroll, or less than half the rate for the state.
Hubbard said the State Fund would like to keep state government as a customer, and wants to show the state why the fund is a good deal - regardless of the law requiring the state to buy insurance from the fund.
Posted in State-and-regional on Thursday, October 29, 2009 12:00 am Updated: 11:01 pm. | Tags: Workers' Compensation
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