The 50th State May Create Hawaii Monopolistic State Fund
The idea of a Hawaii Monopolistic State Fund may not just be a subject tossed around by Workers Comp aficionados. A new piece of legislation referred to as House Bill 2715 may change the Hawaii WC landscape permanently. Please remember HB 2715 is quite a few steps from being enacted including surviving a veto by the Governor.
The shocker is that all the states that have decided to switch from a monopolistic state fund to more of a regular insurance market discovered paydirt for the employers. Nevada and West Virginia are among the successful transitions from monopolistic to the regular marketplace.
You can find the Hawaii Monopolistic State Fund bill here > HB 2715 . It is a .PDF file. It may be worth downloading to follow along with my analysis or to read on your own. The first part of the bill is original. The second part amends older legislation.
My curiosity overcame me and yes, I had to read this complete bill. Some of the more interesting passages from the bill are: (my comments are in italics)
Page 1 Line 12 – The workers’ compensation law includes certain statutory presumptions that place on the employer the burden of producing substantial evidence to the contrary to rebut a claim for a covered work injury. Despite this presumption, recommended medical treatment or vocational rehabilitation plans are delayed or arbitrarily and capriciously denied; approved services provided by medical or other healthcare professionals go unpaid; and there is a reluctance to accept workers’
compensation cases for fear of being denied reimbursements, all of which contribute to a dysfunctional health care system that cannot rehabilitate the injured worker.
A state fund is going to solve this concern or add to it?
Page 7 Line 15 – An employer with two or more lost-time claims greater than $10,000, and a loss ratio greater than 1.0, over the immediately preceding three years shall be placed in the high
That is not the definition of a high-risk employer.
Page 8 Line 16 The contingent liabilities of members provided in section 431:4-317 may be separated so that members assigned to the high risk division have a further contingent liability for deficits in the high risk division; provided that no contingent liability shall be in the aggregate for more than five times the annual premium rate of the member’s policy nor for a term of more than one year.
Does this mean a 500% addition to an employer’s premium? Ouch – if I am reading that passage correctly.
Interestingly enough, the bill has been voted on twice.
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