Workers Comp and the Committee on Health and Safety...
Honest employers, partricularly those in the various blue-collar fields, might be over-paying rates for workers' compensation insurance due to the fact that their less than honest industry peers are cheating, a California advisory committee stated recently.
The report, which was in excess of forty pages long from the Committee on Health and Safety & Workers' Compensation stated that this lack of integrity means that honest firms in a broad range of risky blue-collar fields may be paying as much as a staggering 8 times more for workers' compensation insurance than they should be!
The 8 person advisory committee, which was commisioned by the governor and Legislature, sent the report to Insurance Commissioner Steve Poizner, who has quickly formed an anti-fraud force.
Under the existing law, firms have to purchase workers' compensation insurance for every single individual that works for them. The costs for this insurance is relative to the risk of the particular work being done. As a general example, a secretary would be at much lower risk than the employee who uses power tools.
For such a a blue collar worker, the hirer might be required to pay a dollar in workers' comp premium for every single dollar in payroll. Therefore, it obviously costs the honest firm around two times the amount to send such a worker up on the roof than the paycheck might suggest. In contrast, however, to get workers' comp coverage for a secretary in the same
firm, he or she might have to add only one cent in workers' comp costs for every dollar.
So the honest firms will eventually get hit with a further rate increase to make up for the less than honest ones, unfortunately.
A San Francisco based insurance agent who heads a confederation of home and small-business owners and is involved in the anti-fraud campaign mentioned earlier, stated that officials have come to percieve that this particular kind of fraud is running amok. Yet he also stated that he did not fully understand how rates could really be 8 times bigger,
although any increase was too much and cannot be tolerated.
Honest employers, partricularly those in the various blue-collar fields, might be over-paying rates for workers' compensation insurance due to the fact that their less than honest industry peers are cheating, a California advisory committee stated recently.
The report, which was in excess of forty pages long from the Committee on Health and Safety & Workers' Compensation stated that this lack of integrity means that honest firms in a broad range of risky blue-collar fields may be paying as much as a staggering 8 times more for workers' compensation insurance than they should be!
The 8 person advisory committee, which was commisioned by the governor and Legislature, sent the report to Insurance Commissioner Steve Poizner, who has quickly formed an anti-fraud force.
Under the existing law, firms have to purchase workers' compensation insurance for every single individual that works for them. The costs for this insurance is relative to the risk of the particular work being done. As a general example, a secretary would be at much lower risk than the employee who uses power tools.
For such a a blue collar worker, the hirer might be required to pay a dollar in workers' comp premium for every single dollar in payroll. Therefore, it obviously costs the honest firm around two times the amount to send such a worker up on the roof than the paycheck might suggest. In contrast, however, to get workers' comp coverage for a secretary in the same
firm, he or she might have to add only one cent in workers' comp costs for every dollar.
So the honest firms will eventually get hit with a further rate increase to make up for the less than honest ones, unfortunately.
A San Francisco based insurance agent who heads a confederation of home and small-business owners and is involved in the anti-fraud campaign mentioned earlier, stated that officials have come to percieve that this particular kind of fraud is running amok. Yet he also stated that he did not fully understand how rates could really be 8 times bigger,
although any increase was too much and cannot be tolerated.
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