N.C. Industrial Commission to review workers' comp policies

N.C. commission to review policies to ensure protection

mlocke@newsobserver.comApril 3, 2012 

Pamela Thorpe Young, Chair of the North Carolina Industrial Commission

  • Workers’ compensation came about in the 1930s to ensure that businesses were responsible for workers hurt on the job. The states put limits on what could be paid to workers for injuries and absences.

    In North Carolina, businesses with three or more employees are required to buy insurance or certify with the Department of Insurance that they have enough assets to self-insure.

    When an employer doesn’t buy this insurance, the injured worker could sue the business owner. Most, however, go to the state Industrial Commission, which can order uninsured employers to pay what workers are due for their injuries.

    In fiscal year 2011, the commission dealt with 62,409 workers’ compensation claims. The majority, 75 percent, were settled through mediation.

The N.C. Industrial Commission said Monday it would launch a review of its policies and procedures to ensure workers who are injured on the job are protected from reckless employers.

Acknowledging problems in the state’s workers’ compensation system, commission Chairwoman Pam Young said her agency would work with the state Attorney General’s office “to examine overall strategies and enforcement.”

“We will continue to meet with stakeholders on this very important issue, and, as we always have, the commission will continuously review its operations to make certain they are as efficient and effective as possible,” she said in a statement.

The move comes in response to a News & Observer investigation Sunday that revealed that tens of thousands of North Carolina businesses don’t buy workers’ compensation insurance, putting their employees at risk and violating state law.

The state doesn’t track whether employers buy the insurance coverage – even though the Industrial Commission is notified when an employer lapses – and often only learns about noncompliant companies when a worker gets hurt and appeals for help. Likewise, the commission typically doesn’t enforce fines – up to $100 per day without coverage – and few of those referred for prosecution lead to an arrest or criminal charges.

Young, who former Democratic Gov. Mike Easley appointed to the commission in 2007, refused to comment directly about the problems identified in the investigation. Her statement also doesn’t give specifics about the commission’s review.

“The North Carolina workers’ compensation system faces many challenges, including ensuring that employers are providing the necessary and adequate coverage for their employees,” she said. “The best way for our system to be strong and vibrant is to be sure all participants meet their obligations.”

Democratic Gov. Bev Perdue, who has appointed members of the commission, declined to comment, deferring to Young’s statement.

House Speaker Thom Tillis and Senate leader Phil Berger, both Republicans, could not be reached for comment.

‘Start at the top’

Republican state Sen. Harry Brown put the problems raised on Perdue’s doorstep. “I think it’s got to start at the top,” he said. “I think the governor and commissioners themselves have that (enforcement) power and for whatever reason they’ve chosen not to do it.”

But Brown, an automobile dealer who pays for the insurance, said he sympathizes with small businesses who can’t afford the insurance.

Democratic state Sen. Doug Berger, a former deputy commissioner who handled noncompliant cases, wants the governor to make prompt reforms. “I’m going to ask the governor to put some reforms in the budget bill for this session,” he said.

In addition, he wants to see legislation requiring the commission’s investigators to do spot checks to see whether businesses are complying with the law.

An N&O analysis of a state database indicates that insurance carriers cover about 140,000 businesses even though the state counts roughly 170,000 companies in the state. Businesses with three or more employees are required to buy insurance or certify with the state that they can cover the cost of employees’ injuries. In fiscal year 2011, the commission dealt with 62,409 workers’ compensation claims.

Berger said one other possible solution is giving the state Department of Insurance the power to investigate workers’ compensation fraud. “Let’s put these investigations in the hands of people who do this and know how to manage it,” he said.

Last week, Insurance Commissioner Wayne Goodwin, a Democrat, said he would be willing to take over workers compensation fraud investigations if the legislature directed him to and gave him the resources.

‘A right to be protected’

Few other lawmakers and candidates offered concrete solutions. House Speaker Pro Tem Dale Folwell, a Winston-Salem Republican, said the investigation illuminates a need for more reform of the workers comp system and pledged to call together people stakeholders to talk about possible solutions.

Folwell, who is running for lieutenant governor, helped lead an effort in the state legislature last year to rewrite parts of the workers’ compensation law. But the changes curtailed the amount of payments businesses must make to injured workers and did not address employers who don’t buy insurance.

A number of the candidates for governor said protecting workers is vital, including a spokesman for Republican Pat McCrory who said “there certainly must be a safety net in place for workers who are injured.”

In a statement, Democrat Bob Etheridge said “the law must be enforced” because employees “have a right to be protected on the job.”

His challenger, state Rep. Bill Faison, echoed the sentiment, saying “when people are hurt on the job they need all the help they can get.”

Locke: 919-829-8927

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