Before a large beam cracked him on the back of the neck and sent him to the hospital and surgery on Oct. 22, 1986, Paul L. Kuehnl had never given a second thought to the Workers Compensation Fund of Utah.
But more than two years after the accident, Kuehnl is glad there is such an organization because it has paid him wages and covers his medical expenses as he attempts to recover from the injuries that left him a quadriplegic.Kuehnl worked for Camco Construction Co. at the time and was at Solitude Ski Resort that day working on a large maintenance shed. He and fellow employees were knocking out a header when the beam struck him. A helicopter took him to a hospital where he had surgery for a pinched spinal cord.
He is paralyzed from the chest down but gets around in a wheelchair, drives a van with hand controls and lives alone in a mobile home with ramps - all paid by the fund. Kuehnl receives wages, and his medical expenses are paid totally from the fund because Camco was a policyholder.
The fund is the largest worker's compensation benefits carrier in Utah with 22,000 policyholders, who provide all of the operating resources for the fund, according to Blaine Palmer, president. More than 40,000 claims are processed annually.
Established in 1917 by the Legislature to provide benefits to injured workers, the fund was known until 1986 as the State Insurance Fund. At that time the name was changed to the Workers Compensation Fund of Utah to avoid confusion with the State Insurance Department.
On July 1, 1988, the fund became a non-profit, self-supporting quasi-public corporation to allow it to operate as an independent insurance entity governed by a board of directors, Palmer said.
The 1917 legislation mandated that every employer in the state have worker's compensation insurance to provide a portion of the wages lost by injured workers and also cover medical expenses.
The mission of the fund, said Palmer, is to provide workers compensation insurance at the lowest possible cost while maintaining its actuarial soundness with the best possible service.
There are three ways workers compensation benefits are provided to workers in Utah.
Palmer said the first is through self-insurance. About 80 of the largest Utah companies are self-insured, but each had to prove to the State Industrial Commission it was capable of covering the benefits, which sometimes are paid for many years in the case of serious accidents. Even if the company goes out of the business, the benefits will be paid.
An example of the latter occurred when self-insured IML Freight went bankrupt several years ago and the state became liable to pay benefits to several injured workers. All employers in Utah now pay part of their workers compensation premium tax to the Uninsured Employer's Fund to cover this type of case.
The second method of providing workers compensation benefits is through private insurance carriers, just like purchasing life or auto insurance. Palmer said his fund competes with 200 insurance companies in Utah writing workers compensation insurance.
Premium rates for 560 job classifications covered by the insurance are recommended by the National Council on Compensation Insurance after receiving data from the carriers. The rates are set by the state insurance commissioner, but state law allows the Worker's Compensation Fund of Utah rates to be 25 percent lower.
The fund is the third way workers compensation benefits are provided in Utah and it covers 85 percent of Utah workers.
Palmer said the fund doesn't use taxpayer money because all of the operating expenses are provided by the premiums paid by employers. Even though the fund is a quasi-public corporation, it still is considered a state agency because the Legislature reviews the budget and the 130 employees are paid at the same levels as regular state employees.
Often asked why a quasi-public corporation should compete with private insurance companies, Palmer said someone needs to take the poor risks that nobody wants to insure. He said the fund is required to carry the insurance of companies not able or willing to get it elsewhere.
He is proud of what the fund accomplishes and said it is an entirely Utah operation with every dollar paid in premiums staying in the state, not like some insurance companies which send their profits to the main office in other areas.
With $160 million in reserves, the fund takes in about $62 million annually in premiums and spends $64 million on wages and medical benefits to injured workers. Even though more money goes out than is taken in, Palmer said the fund is actuarily sound because it earns interest, and that more than makes up the $2 million difference between outgoing and incoming money.
To be actuarily sound, the fund must demonstrate that it has enough money to cover expenses incurred by injured workers for the life of the injury and unemployment time. "Even if we closed today we have enough money to cover the lifetime benefits of everyone now being paid," Palmer said.
Utah law mandating that each company be insured to provide workers compensation benefits operates under an exclusivity principle, Palmer said, meaning injured Utah workers are guaranteed medical and wage benefits regardless of who is at fault.
In exchange, employees can't sue their employers for liability. The exclusivity principle is why the premium rates paid by employers haven't "gone out of sight. We are proud of the rates, which are based on payrolls, and each job has a different rate based on the hazards connected with it," he said.
Each injured employee is eligible for two-thirds of his present salary up to a maximum of $323 per week. Palmer said the worker can draw the money until a doctor releases the employee to return to work.
If a medical panel rules the person has a permanent total disability the wage benefits will be paid for the rest of the worker's life. The fund could pay for a specially-equipped van, special nursing, special equipment, alterations to a house for wheelchairs and rehabilitation.
Through its efforts, Palmer said the fund's main emphasis is getting the injured worker back at the same job with the same employer. The next alternatives are the same employer with a modified job; the same company with a new job; a different company in the same industry; a different industry using transferable skills; obtaining new skills through on-the-job training for four to six months; and upgrading a person's skills with short-term schooling followed by a return to work.
Here is how the fund has helped Kuehnl:
Three times every week he drives to the Western Rehabilitation Institute for therapy. Various exercises and different machines are designed to strengthen his muscles, not used much because of his confinement to the wheelchair.
Have the thousands of dollars from the fund for the therapy done any good? Kuehnl, an independent person who says he wants to get well enough to do some work out of his house, is gradually getting back some movement in his fingers. When he was at the University Hospital he walked 175 feet with the aid of braces, but now walks 675 feet and brags about every foot.
He takes some classes in construction drafting by computer at Salt Lake Community College, paid by the fund, and gets about $400 worth of medical supplies monthly, also paid by the fund.
Kuehnl gives the fund high marks for being there in a time of need, but also notes that on occasion he has to push the employees into paying for some things because they don't think a quadriplegic is capable of accomplishing certain functions.
With a determination not found in many people in his condition, Kuehnl said he shares information about new therapy programs or exercise devices and programs and in return gets information from others. He said his goal is to one day stop receiving money from the fund.