Workers' Comp Changes Face Challenge in West Virginia

West Virginia tops the list of the states with the highest workers' compensation cost per employee, a fact not lost on the state's legislature, which pushed through workers' compensation reform measures this year. The new rules now face their first state supreme court challenge.

According to an annual report released by the National Foundation for Unemployment & Workers' Compensation, the average cost in West Virginia is $1,073, while across the nation the average is $350 per covered employee. The second highest state in the nation is California at $652, and surprisingly enough, the states surrounding West Virginia have averages significantly lower costs: Virginia, $207 per employee; Kentucky, $309 per employee; Maryland, $343 per employee; Ohio, $420 per employee; and Pennsylvania, $448 per employee. The states with the lowest benefit cost per employee were Arizona, with $179 per employee, and Indiana, with $187 per employee.

"We are not surprised that West Virginia is still the highest cost state in the nation for workers' compensation costs," said Mike Idleman, assistant vice president of GARMI Inc., a third-party administrator for workers' compensation.

He said legislative changes made to the state's workers' compensation law (S.B. 2013), which took effect July 1, will take several years to impact comp costs in the state.

In addition, the West Virginia Supreme Court will hear several challenges to the new law, and will play a major role in the ultimate impact the new law will have on West Virginia's workers' compensation costs, said Idleman.

As requested by the state Supreme Court of Appeals, the West Virginia Workers' Compensation Commission filed a response to a legal challenge that could have a billion-dollar impact on the state's workers' compensation fund.

"Although this case involves just one claimant, it directly impacts S.B. 2013 as a whole and all claims awarded after July 1," said Gregory A. Burton, executive director of the Workers' Compensation Commission. "Our actuaries estimate the potential impact of an adverse ruling in this case at more than $1 billion overall because of the precedent it would set for other, similar cases."

A petition was filed in September on behalf of Charles Thompson, a roof bolter for U.S. Steel Mining Co. The Workers' Compensation Division, at the time part of the state Bureau of Employment Programs, granted Thompson a permanent partial disability (PPD) award in an order dated July 24, at a rate based on the new legislation.

"The basic dispute in this case is what law applies to Mr. Thompson's claim: the law in effect at the time he was injured or the law in effect when he was given an award," Burton explained. "Mr. Thompson's award was made after July 1, so we applied the new law.

Burton said he believes the court will adhere to its earlier rulings that instructed the legislature about how to make reform measures effective immediately. According to Burton, the state legislature strictly followed the court's instruction.

Burton said the legislature's language in S.B. 2013 was clear and unambiguous."It specifically stated that the new maximum PPD benefit rate was to apply to all awards made on or after the effective date, which was July 1, 2003."

The National Foundation's annual state workers' compensation fiscal data report can be purchased by visiting their Web site at www.uwcstrategy.org/Bookshop/index.html.

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