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How to fix workers' comp?

by Nora Edinger

REGIONAL EDITOR

CHARLESTON -- There's one thing many area senators seem to agree on about workers' compensation: The ailing system can't be fixed without some biting reforms.

"If we set our (employer premium) rates by actuarial soundness and did nothing (about reform), it would double the rates," said Sen. Joe Minard, D-Harrison. "It would run people out of business."

The Senate is now considering a bill with reform measures that include reducing certain disability payments, making it harder to get disability and reducing the types of disability cases that are guaranteed access to the state Supreme Court of Appeals. All are cost-cutting measures aimed at helping a system that has a $2.5 billion deficit and will be bankrupt in two years.

"My feeling is when you get investigators out there, you're going to cut those claims immediately," Minard said of stepping up pursuit of fraudulent cases.

That sentiment was echoed by several other senators, including Sen. Mike Oliverio, D-Monongalia. He believes limiting court access is a particularly important provision. Business and industry have complained the elected high court frequently rules in favor of labor in disability cases.

Oliverio pointed out the justices have had plenty of opportunity to do so. Workers' compensation cases have increased from 116 in 1983 to more than 2,300 in 1999, according to Supreme Court figures. In 1999, they were 65 percent of the court's caseload.

Oliverio also favors a reform that raises the minimum impairment needed for permanent-disability consideration from 40 percent to 50 percent as a way to reduce claim costs.

"West Virginia leads the nation in terms of the percentage of former employees collecting permanent disability," Oliverio said.

"We felt that it was necessary to raise the threshold," Oliverio said.

Sen. Bill Sharpe, D-Lewis, said such measures are needed to keep any increases to employer premiums down around 15 percent. He said actuarial numbers show the premium increase would otherwise need to be as much as 40 percent.

OTHER VIEWS

Those kinds of limits on premium increases are likely to resonate with area employers, particularly the industrial and manufacturing sites that already pay higher premiums.

Patricia Minehardt, president of HK Casting of Lewis County, said a big premium increase wouldn't shut her iron foundry down but it would make things difficult.

"For employers to bear the sole tax is punishing. We're paying for the sins of the past."

Terri Oliverio, human resources manager for Alcan Aluminum Corp. of Fairmont, said that company will submit similar statements during a Monday public hearing on workers' compensation in Charleston. Alcan feels the Senate bill is too weak.

"Alcan ... is deeply concerned that the reform bill will unnecessarily escalate costs for businesses to operate in the state," Terri Oliverio said in a written statement.

In spite of what she said is a good safety record, the plant has paid more than $900,000 in premiums over the last three years.

Some of the Senate-led reforms are gathering resistance inside the Legislature, as well.

"It's a bad deal for workers," said Del. Mike Caputo, D-Marion.

He finds the proposed 31┌3 percent reduction of some current disability recipients' benefits particularly heinous.

"We're not doing anything, in my opinion, to address the fraud problem," he said of going after businesses that aren't paying their premiums. "But, we've spelled out everything that the workers will have to bear."

On the fraud note, he was specifically disappointed in the failure of a Senate amendment that would have barred entrepreneurs with 25 percent ownership in a company that is in premium default from opening another business.

Sen. Jon Blair Hunter, D-Monongalia, also spoke out on behalf of labor early last week in a failed attempt to restore one cut benefit. That 5 percent disability benefit is for workers who have been diagnosed with occupational pneumoconiosis (black┌white lung) but do not show impaired health.

Cutting the non-impaired benefit is a positive point for Alcan, however, Terri Oliverio said. She said this is the only state that associates aluminum dust with the illness or gives benefits to workers who do not show actual impairment.

She said Alcan pays out benefits of at least $9,500 per year for each non-impaired claim.

Regional editor Nora Edinger can be reached at 626-1447 or by e-mail at nedinger@exponent-telegram.com