Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Workers Compensation Finance topic
No spam. Unsubscribe anytime.
Uninsured Employers Fund seeks higher assessment after revenue drop; insurers split on level
Summary
The Uninsured Employers Fund director told the committee that collections have fallen and asked for authority to raise the statutory assessment cap. Chesapeake Employers proposed a smaller increase and said accompanying governance reforms would resolve long-term solvency; defenders of existing structure urged caution and oversight changes first.
Michael Burns, director of Maryland's Uninsured Employers Fund (UEF), told the House Economic Matters Committee that the fund has seen a decline in assessment revenue and asked the legislature to authorize an increase in the statutory assessment cap to preserve solvency for injured workers.
Burns said the UEF receives no direct tax dollars and is funded primarily by assessments on workers'compensation orders; those receipts have fallen by roughly $2.4 million over the past two fiscal years, he said. He asked the committee to approve an increase in the assessment applied to most commission orders from the current 1% (plus an available second 1%) to permit the board to raise the assessment as needed. Burns said the board and agency would consider a smaller increase as a negotiated compromise.
Chesapeake Employers and the Injured Workers Insurance Fund testified they support the bill with an amendment to raise the assessment by 0.5% rather than 1%, and they urged complementary changes to UEF governance and reserve requirements (Senate Bill 695 was cited as a companion governance measure). Insurance-industry trade groups opposed the bill as written and warned that added assessments are ultimately passed to employers and consumers via premiums.
Opponents also urged enhanced oversight and an outside audit of reserve assumptions: Maryland Defense Counsel and the American Property Casualty Insurance Association said some fiscal and governance reforms should accompany any assessment change to protect ratepayers and ensure the fund's long-term stability.
The committee did not vote. Lawmakers asked that the sponsor and the administration continue work on a compromise that balances fund solvency with employer costs and governance reforms.
