Montana Workers’ Compensation Montana State Fire Chiefs Conference October 2011 Great Falls, Montana Jeff Griffin Tammy Jeffries

A report on Firefighter Injuries and Current Coverage Issues

Four Goals 1.Evaluate the risk of injury to Firefighters 2.Montana Law 3.Current coverage practices 4.Challenges

Should Risk Leadership Be a High Priority in your Organization How big is the problem of accidents and injuries? Injuries and accidents to Fire Department employees is estimated to cost over 2.7 billion dollars a year nation wide Studies indicate that for every dollar an insurance company will spend in 2011 on the Public Entity claims, the Public Entity will spend an additional $4.00 in hidden costs Criminal Charges - The new challenge for Public Entities

If it is PREDICTABLE It is PREVENTABLE Regulations and standards are only the starting point of a quality Risk Leadership program. 7.5% of all injuries and suits are attributed to “things” Focusing on the Human Factor is the key to a successful Risk Leadership program. 92.5% of all injuries have one common thread!

Property Workers’ Compensation Liability Fundamentals of Exposures

NFPA FIREFIGHTER FATALITIES IN THE US

NFPA FIREFIGHTER INJURIES IN THE US

Understanding the Power of the Near Miss Near Miss Relationships 1 Serious 59 Minor 600 Near Misses

Understanding the Power of the Near Miss Near Miss Relationships 1 Serious 59 Minor 600 Near Misses Cultural Drift Flawed Behavior

RATES FOR CLASSCODE 7710 Alabama 3.55 Alaska4.54 Arkansas3.79 Colorado 3.66 Connecticut5.02 Georgia 3.63 Hawaii2.76 Idaho3.36 Illinois Indiana1.88 Iowa Kansas4.09 Kentucky2.99 Louisiana3.46 Maine5.18 Maryland4.62 Mississippi5.44 Missouri4.64 Nebraska9.25 Nevada 9.93 New Hampshire9.99 New Mexico4.00 North Carolina3.41 Oklahoma4.95 Oregon*2.45 *Composite 0.99 Rhode Island3.99 South Carolina4.56 South Dakota10.58 Tennessee10.37 Utah 1.31 Vermont 6.30 Virginia 2.77 West Virginia 4.24 Wisconsin 11.15

If it is PREDICTABLE It is PREVENTABLE Regulations and standards are only the starting point of a quality Risk Leadership program. 7.5% of all injuries and suits are attributed to “things” Focusing on the Human Factor is the key to a successful Risk Leadership program. 92.5% of all injuries have one common thread!

Workers’ Compensation Common-law principle – the employer was responsible for the injury or death of an employee resulting from a negligent act. Achieve two goals - Provide medical care and income to workers injured on the job & death benefits to families of workers killed on the job. Protect employers from costly and unpredictable lawsuits by workers.

Montana History State Accident Insurance and Total Permanent Disability Fund 1911 – Montana Supreme Court declares it unconstitutional 1915 – Montana Legislature enacts a comprehensive Workers’ Compensation Act

“Exclusive” or “Sole” Remedy MCA Employer is not subject to any liability whatever for the death or personal injury to an employee covered by the Workers’ Compensation Act or for any claims for contribution or indemnity asserted by a third person from who damages are sought on account of such injuries or death.

Quid Pro Quo Exchange of rights Employees by relieving them of the responsibility of proving employer negligence Employers by relieving them of liability from common-law suits involving negligence

Volunteer Firefighters Volunteers are not “employees” No remuneration –they don’t receive a salary Volunteer hours means – time spent in training, response time and on employer’s premise Not mandatory

Subsequent Injury Fund Concurrent Employment (7) (c) “Employment in which the employee was actually employed at the time of the injury and would have continued to be employed without a break in the term of employment if not for the injury.”

Exclusions to Benefits Owners: Sole proprietor Partners Non- subject Corporate Officers

Private Carriers Reluctant to insure Volunteers Pay benefits based upon wages where they don’t collect the premium Collect premium based upon an hourly rate Exposure – high risk

Wage/Benefit Calculations National Council on Compensation (NCCI) – Class Code 7704 Assumed wage - $300 per year Minimum wage - $7.35 per hour Assumed wage - $100 per year or $7.35/hr Varies from Insurers – Private, Risk Pools, State Fund

Independent Contractor Test (1): An “independent contractor” is one who renders service in the course of an occupation and: (a) has been and will continue to be free from control or direction over the performance of the services, both under contract and in fact; and (b) Is engaged in an independently established trade, occupation, profession, or business.

Current Coverage Practices Montana number of fire service agencies National 300 Projected 400

Montana number of firefighters covered by workers’ compensation Covered Number of firefighters Paid ≈ 700 ≈ 700 Volunteer  3600  5100

Purchasing Workers’ Compensation Purchasing Supplemental ≈

Purchasing Both Workers’ Compensation and Supplemental Bare

Challenges The Law vs. common practice What a court might do What your liability carrier would do

Challenges The cost of workers’ compensation

Challenges Coverage Issues

Challenges Identification of agencies with little or no coverage

Challenges A possible legislative fix

Challenges Can MFCA’s have an impact on cost

Montana Workers’ Compensation Montana State Fire Chiefs Conference October 2011 Great Falls, Montana Jeff Griffin Tammy Jeffries