A bill passed by the 1988 Legislature that was designed to maintain the solvency of the Employer's Reinsurance Fund (ormerly the Second Injury Fund) won't take effect until July 1, but already plans are afoot to refine the language.
The Worker's Compensation Task Force appointed by Gov. Norm Bangerter has held its first meeting, and it is apparent that labor and management want some changes made, even though the bill passed by the Legislature was supposed to be a compromise.Payment from the Employer's Reinsurance Fund starts immediately after the employer or its insurance carrier has satisfied liability under the law, and in recent years the reimbursements to the insurance carriers have slowly eroded the fund to a point where it would have become insolvent in a few months.
HB218, the bill finally passed by the Legislature, did increase the premium on workmen's compensation insurance to a maximum of 8 percent with the State Industrial Commission having the authority to set the percentage annually. HB218 also set at $5 million, the amount of cash reserve the fund should have annually.
This requirement is one of several items the task force will study at its July 28 meeting. Commission Chairman Stephen M. Hadley said the 8 percent maximum premium allowed on workmen's compensation insurance may not be feasible if the $5 million cash reserve portion of the bill is retained.
Erie Boorman, Employer's Reinsurance Fund administrator, said HB218 will show a positive cash flow shortly after July 1 when the new bill becomes effective and the $5 million in cash reserve requirement will be met shortly.
Even though Jinks Dabney, an attorney who represents clients before the commission, believes the only purpose of the task force was to monitor the solvency of the fund, other task force members have identified several areas of concern with the new bill and management and labor officials indicated they would identify others before the July 28 meeting.
Some task force members admitted that between the time a bill drafted by Sen. Kay S. Cornaby, R-Salt Lake, was turned down and HB218 became the substitute, some language was changed and some items excluded that either management or labor wanted included.
One of the areas scheduled for discussion centers on a provision in HB218 that compensation paid by the Employee's Reinsurance Fund will be reduced by 50 percent of the Social Security retirement benefits received by the employee during the same period.
Another oversight was removal of the $1,000 limit on rehabilitation money an employer must pay to an injured employee to aid in his recovery and left the amount up to the commission with the money coming from the Employer's Reinsurance Fund.
Ed Mayne, president of the Utah State AFL-CIO, said he was pleased with that provision of the law, but Larry Bunkall, president of the Utah Manufacturer's Association, said the issue needs more study.
Task force members also want to examine the new provision that employees must give written notice of an accident to their employer within 180 days or the employee is barred from collecting any benefits. And because the definition of an accident was omitted, task force members also will determine if one can be written.