Too Conservative On North Carolina Workers Comp Uninsureds
The articles which were written on North Carolina Workers Comp uninsureds were to me an overestimation. I had written various articles on my shock and dismay that over 30,000 companies in North Carolina had no workers compensation coverage.
Some of the articles are listed below:
- North Carolina Has 30,000 Uninsured Employers
- North Carolina Prosecutes 70 Employers, What About The Other 29,930?
- North Carolina Decides To Hide Worker Comp Uninsureds
A recent very astute television reporter for News 9 in Charlotte performed a great job at digging into the real numbers to see the true number of North Carolina Workers Comp uninsureds. I will cover the NC Auditors report next week as I want to analyze it fully.
Beyond surprisingly or astounding – the reporter discovered that 52,000 – yes over 52,000 businesses in North Carolina that should have coverage had none. The reporter referenced the State Auditor’s report for this figure.
I have just sent an email to him to make sure that this count involved businesses with more than three employees. As you may know, coverage is not required in North Carolina if a company has three or less employees.
What do 52,000 uncovered employers cause in the general marketplace in North Carolina?
- The first area would be that the insurance marketplace would be very skewed as far as insurance ratings or E-Mods. This may cause employer with WC insurance to pay more premiums
- Insurance agents may be shorted very heavily due to lack of premium that should be paid by these employers.
- Ghost policies that will produce a certificate of insurance but not cover the employees would be prevalent in the marketplace
- The health insurance marketplace or even North Carolina Medicaid may be absorbing the cost of treating these injuries
- The cost of paying for injured workers’ disability (Temporary Total, Permanent Partial, etc.) may be shifted to Unemployment or even welfare.
- Treatment facilities may be receiving less than they should to treat an injury or may possibly not be paid at all if they later find out there is no coverage.
- These uncovered employers would not strive for a safe workplace as there would be no retribution for having an unsafe workplace of their employees – very important
There are many other concerns and considerations with 52,000 employers not being on the Workers Compensation rolls.
One area that has not been explored is if the employer does not have coverage, then would the injured employee file a liability suit against the employer? This could get interesting – but then again, if they have no workers comp coverage, then there is likely no liability coverages either.
Other states have handled these types of situations such as West Virginia posting signs at workplaces that a certain employer (usually construction) is operating without WC coverage. I actually saw those signs when I was there consulting for clients. They were very noticeable as I had driven by a major construction site.
The new North Carolina Insurance Commissioner Mike Causey may have to act on what I would call a crisis point. One can understand if there are a few thousand, however, 52,000???
We have been in the business of aiding employers cut their work comp costs, however, we have never advocated with going bare as bankruptcy may be the alternative is there is a very large claim against any of the North Carolina Workers Comp uninsureds.
Article provided by James J Moore, AIC, MBA, ChFC, ARM. All articles are original content. Check out the full website at www.cutcompcosts.com