June 15, 2010

Tewksbury (Finally) Opts In

There are five towns in Massachusetts that do not carry workers comp insurance for their employees. Four of them - Dana, Prescott, Enfield and Greenwich - are under 412 billion gallons of water: they were submerged during the 1930s in the making of the Quabbin Reservoir, which supplies drinking water to Boston and a number of suburban cities and towns. The fifth, Tewksbury, voted to join the workers comp system way back in 1914, but a clerical error recorded the positive vote as negative, resulting in nearly 100 years of a go-it-alone, pay-as-you-go, hope-for-the-best approach to comp among the residents of the town, now nearing 30,000 people.

To date, Tewksbury has been pretty lucky. The town has paid out between $100,000 and $189,000 per year for claims in recent years. That's not bad, considering that one failed back can run upwards of $500,000. But just because Tewksbury has been lucky does not mean they are going to stay lucky. The liability to the town's tax payers is precariously open-ended. In these challenging times of reduced budgets for all municipal services, the specter of an unanticipated claim could put Tewksbury on the verge of bankruptcy. Because the town did not participate in the comp system, injured workers had the option of suing for damages unavailable in the comp system.

As we read in Insurance News Net, last month the town meeting voted to adopt workers comp coverage. (Presumably, the vote was properly recorded this time.) It will take a few years to develop an experience rating, based upon actual losses and statutory benefits. Overall the cost of insurance will run a bit higher than an average loss year, but that's price you pay for transferring the risk to a third party.Comp will finally become a set cost in the town budget. A workers comp policy comes with a comfort factor that cannot be measured simply in premium dollars: any claims, large or small, any catastrophic losses involving multiple town employees, will now be covered by insurance. That should help town residents and officials sleep a little better at night.

As for the surviving citizens of Dana, Prescott, Enfield and Greenwich, displaced long ago by the state's appetite for water, comp is not a likely component in their dreams. I imagine they welcome a nocturnal glimpse of the communities where they once lived and waken with sense of sadness and of loss.

| 2 Comments

2 Comments

Alhough having absolutely nothing to do with WC, your weblog brought back vivid memories of a children's story about the Quabbin Reservoir and Boston's appetite for water: "Letting Swift River Go" by Jane Yolen. worth the read, again and again. mh

I just came back from the video conference that was held between Buffalo, Albany and Brooklyn Workers Compensation Board locations. All the companies that were in these “Trusts “ are basically screwed.
Due to poor oversight by Workers Compensation of these trusts, companies like CRM are getting away
scott free and leaving 3,000 plus New York companies with a half a “BILLION “dollar bill. All of the member
companies that was fooled into these trusts are receiving bills of hundreds of thousands of dollars.
In some cases a million plus in bills. I asked the “ Forensic Auditor” how did this happen? He told us that
they were fooled because the “Trustees” accountant cooked the numbers to look like they were solvent.
I also asked if there is a criminal investigation of this fraud and he couldn’t comment at this time. But
he did add that Workers Compensation have an agreement with CRM not to ask for any discoveries at
this time. This way they can recover as much money as possible from CRM without them going bankrupt or
dragging it out for years in court where all the lawyer’s fees will eat what money is left. But in the mean time,
they want all the companies that were fooled into these trusts to pay up or have judgments against us.
Most of us companies can’t afford a sudden bill of hundreds of thousands of dollars. We are already hurting
really bad for so many reasons it would take too long to describe. But you kind people already know it’s hard to have a manufacturing company in the US these days and truly hard to run one in New York.
I told these people that this bill will put me under, I can’t possibly pay such a large amount. I lost over 400
thousand in last year’s economic mess and had to lay off half of my workers. I am still fighting to get my crew back and work back in my building. It breaks my heart because I see how my workers are struggling with reduced hours.
The New York politicians want to keep this quiet. Especially in an election year. They should be trying to create jobs
in New York. When New Yorkers find out they are “Cannibalizing” their own manufacturing base and putting good
honest companies in New York out of business to cover their misdeeds. They won’t get there sorry asses re-elected. They are trying to keep this hush-hush , so please spread the word. I’ve contacted many news outlets
and no one wants to cover this story. Amazing

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This page contains a single entry by Jon Coppelman published on June 15, 2010 11:02 AM.

Healthcare Reform and Workers Compensation was the previous entry in this blog.

Cavalcade of Risk #197 is the next entry in this blog.

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