Procurement News Notice |
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| PNN | 2587 |
| Work Detail | A roughly $17,000 increase in insurance costs may lead to budget cuts in the Maple City. Meyersdale Borough Councilwoman Mardi Vincent said during a meeting Thursday that the workers' compensation component of a contract with Cover Insurance, of Meyersdale, the borough's insurance broker, will not be renewed when it expires Sept. 1. Vincent said EMC Insurance Group, which is headquartered in Des Moines and provided workers' compensation for the borough, decided to drop the municipality. An employee of Cover Insurance, she said, contacted 11 other providers about opening a contract with the municipality, but all 11 declined. She cited numerous claims over the last five years — including three annual claims that each resulted in $100,000 worth of bills — as making the borough unattractive to insurance providers. "We just have small numbers of workers that have a huge number of claims," she said. "So basically we are uninsurable." The borough has two part-time workers. Over the course of five years, the borough at times had two full-time workers and one part-time one. "The good news is the state, (the Pennsylvania State Workers' Insurance Fund), is required to insure us," Vincent said. "The state cannot cancel us, period." Borough solicitor Marc Valentine said that although he believes it is likely that the state will accept the municipality, officials can deny the borough if they determine the rate of injury is too high or any fraudulent claims were made to the insurer. "I feel they will provide coverage, but you have to always be aware that there is that possibility," he said. Through the fund, the borough's workers' compensation premium will rise from $14,838 paid in 2015 to $32,173. The council unanimously voted Thursday night to join the program and to make a payment of $16,000 toward the premium. Vincent, the financial committee chairwoman, said to find the additional money, the council is going to have to make cuts and look for other options in its 2017 budget. She said cuts could include putting a hold on or gradually upgrading police technology and equipment, including an outdated computer system. Officials could also wait to upgrade borough equipment and limit matching funds for grants for a streetscape project, she added. "As a last resort we will increase taxes," she said. She added that a 1-mill tax increase would result in an additional $16,000 for the borough. Council President Jeff Irwin said he doesn't believe the council could garner enough votes to raise taxes. "I think our council is committed to not raising taxes," Irwin said. "So we are just going to have to dig deep into the budget and see if we can somehow cut some other area to compensate for this unexpected, huge increases in workers' comp. "I just think it is important that the community realize what we are up against." The municipality operates on a budget of about $1.23 million. Valentine said EMC's move to drop Meyersdale is because the three annual $100,000 claims were made by one borough worker. "When you have that high of a percentage — because what they look at is the total number of employees to the total number of claims — that's when they get to the point when they don't cover you anymore," he said. "Part of the reason why they are denying coverage is because these claims always seem to happen to the same person around the same time of the year." He said that from his own observations and from talking to the insurer, he does not believe the borough has a problem with safety. The borough, he said, could go back to a private insurer in three to five years if no additional claims are made. "But because of the amount of claims and the size of claims, it wouldn't surprise me if it would be more than five years," he said. "Quite frankly, it's going to be a tough road to get it back to private insurance at all." |
| Country | United States , Northern America |
| Industry | Financial Services |
| Entry Date | 03 Sep 2016 |
| Source | http://www.dailyamerican.com/news/local/somerset/meyersdale-workers-comp-costs-skyrocket-officials-to-make-budget-cuts/article_064fc194-f527-5ffd-98d4-80b67c703db5.html |
