VFDs get more state money for workers' comp premiums - WOWK 13 Charleston, Huntington WV News, Weather, Sports

VFDs get more state money for workers' comp premiums

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GEORGE HOHMANN / For The State Journal GEORGE HOHMANN / For The State Journal
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A state program that has spent $5 million to help volunteer fire departments throughout the state pay their workers' compensation insurance premiums has received an additional $4 million to provide more subsidies during the next two years.

In 2011, BrickStreet Mutual Insurance Co. said it was losing money insuring volunteer fire departments and announced it would drop them. No other insurers moved in to pick up the business.

State law requires all employers to provide workers' compensation insurance, but the VFDs were put in an insurance pool and most of their premiums went up.

Some examples include:

  • The Sissonville Volunteer Fire Department's annual premiums went up 81 percent, from $2,055 to $3,728.
  • The Wayne Volunteer Fire Department's premium went up 99 percent, or $24,000 a year.

    Most fire protection in West Virginia is provided by volunteers. When premiums went up, some VFDs threatened to quit taking calls for a day and there was talk of a strike.

    The West Virginia Legislature reacted by creating the Volunteer Fire Department Workers' Compensation Premium Subsidy Program. It is designed to pay the VFDs the difference between the premium BrickStreet charged in 2012 and the VFDs' new, higher premiums.

    The subsidy program began in 2011 with $5 million from the state's general revenue funds. Earlier this month the Legislature provided $4 million more. The new money came from fees collected by the State Fire Marshal for inspections, license exams and other services that office provides.

    Gov. Earl Ray Tomblin signed the bill to allot the new money Feb. 19, surrounded by lawmakers and volunteer firefighters from around the state.

    Brian Malcolm, president of the West Virginia State Firemen's Association, said without the state subsidy, higher premiums "would shut down many fire departments throughout the state."

    "There are companies right now that have to borrow money to pay their workers' comp premium up front, before they can get the (state) reimbursement," Malcolm said.

    The West Virginia State Firemen's Association represents 440 VFDs around the state. In addition to serving as the organization's president, Malcolm is deputy chief of the Springfield Valley VFD in Hampshire County.

    At the bill-signing ceremony, Tomblin thanked volunteer fire fighters "for the work you do each and every day to keep West Virginians safe."

    "You rush in when others rush out, and you answer the call for help, whether it's a family in need or a community recovering from disaster," he said. "It wasn't long ago that workers' compensation rates threatened some of our fire stations.

    "Through the years we've worked hard to keep you in our communities to keep us safe. I'm proud of our work with the Legislature to provide for $4 million to help offset any increases in your workers' compensation premiums. We understand West Virginians and your communities depend on you, including those of us in this room."

    Auditor Glen Gainer, who administers the subsidy, said the subsidy program "shows that government can be responsive and meet the needs." He said people don't realize how many hours volunteers spend training to maintain required certifications.

    "They're professionals," he said. "Unpaid professionals."

    Gainer said the new money is timely because the balance of the fund was down to $92,000. He said 150 applications for subsidies have already been paid this fiscal year and 50 are pending.

    Records provided by Gainer's office show:

    • The Town of Mabscott received the smallest subsidy, $246.61, in fiscal year 2013. The Bradley Prosperity VFD Inc. received the largest subsidy, $45,969.55.
    • The Hundred VFD received the smallest subsidy, $452.93, in fiscal year 2014, as of Feb. 20. The South Berkeley VFD received the largest subsidy, $23,521.

      A 2013 amendment to the subsidy program requires the state Fire Marshal to review the needs of each volunteer or part-volunteer fire department and submit a report to the Legislature by Dec. 31, 2015, that includes recommendations for meeting the needs of the VFDs and sustaining them.

      The report is to include an assessment of the cost of workers' comp coverage for the VFDs and recommendations "for any actions that may be undertaken by the volunteer fire companies and departments and others to reduce those costs."

      Insurers in competitive markets often help employers reduce their premiums by hiring safety experts and establishing workplace safety programs. But the three insurers who are providing workers' comp coverage to the VFDs in the risk pool don't provide them with safety programs.

      Some say that's because the insurers aren't competing and don't have an incentive to help the VFDs drive down costs. The insurers just service the accounts and receive fees for doing so.

      Malcolm raised other issues.

      "What hurts us is fundraisers," he said. "If we're out here doing a chicken dinner, we're paying the same as we do if we're out here saving a life in a burning house.

      "If you've got 10 firefighters out for an hour, you're paying 10 hours of workers' comp. And that's not from the time you go on scene. That's from the time you are dispatched to the time you clear your station."

      Malcolm said the firemen's association wants the Legislature to pass S.B. 255, which would increase the surcharge that is added to all fire and casualty insurance policies issued in the state from 0.55 percent to 1 percent. The surcharge is distributed to VFDs and already provides a major source of funding for many of them.

      The surcharge raised $12.5 million in fiscal year 2013, according to a fiscal note prepared by the state Offices of the Insurance Commissioner. It is estimated that the proposed increase would raise an additional $10.3 million, for a total of $22.8 million.

      Malcolm said the higher surcharge wouldn't solve all of the VFDs' funding issues but "will help us cut down on fundraisers and help us cut down on our workers' comp billable hours.

      "It's hard right now to find a funding mechanism and a source," he said. "That's been our problem since 2011. Right now we're just trying to get a funding mechanism in place. Then we can work toward getting a lower rate."

      And the clock is ticking. The subsidy program is scheduled to end on June 30, 2016.