The State Industrial Commission has finalized the imposition of a $500 annual fee to companies providing workmen's compensation payments through self insuring.
During the last legislative session, the commission was authorized to charge a fee to cover the $30,000 annual cost of administering the companies' self-insured program, but it would be effective only after the commission held a public meeting.The public meeting was held Wednesday, but response was underwhelming since the audience consisted of only one newspaper reporter.
According to a memorandum prepared for the commission by Susan Pixton, administrator of the Default Indemnity Fund, 60 Utah companies employing 100,000 people are affected by imposition of the fee.
She said the self-insured employers subject to the fees enjoy an unusual position because they are granted a privilege subject to regulation and don't pay any portion of the regulation expense. Insurance carriers, adjusters and agents are subject to regulation by the State Insurance Commission and must pay a fee for that regulation, she said.
Charging of the fees will give the State Industrial Commission the ability to more closely monitor the economic status of the self-insured employer without placing any additional burden on the employer, Pixton said. The monitoring will make the payment of worker's compensation claims more secure for the employees.
Other than the payment of the fee, there won't be any adverse effect on the self-insured companies, based on their financial size and strength, the memorandum said.
Commission Chairman Stephen M. Hadley said companies can either provide workmen's compensation (payments for injuries incurred on the job) for their workers through private insurance carriers, the State Insurance Fund or by self-insuring. "We want to make certain the company is financially sound so the employees will receive their benefits," Hadley said.
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