The basic problem with workers’ compensation in NC comes down to its cost. This problem is caused by six fundalmental causes.
First, the government and elected officals don’t think before they act. The labor cost for a roofer in NC comes to $1.53 per $1.00 of payroll for a small employer. This cost does not include the overhead cost for equipment, building and operation. The breakdown is a follows:
– $100.00 paid to the employee,
– $ 6.20 paid to Fed G/F not Soc Sec,
– $ 1.45 paid to Medicare( Part A),
– $ 27.48 paid for Workers Compensation,
– $ 13.80 paid for Comm Gen Liability,
– $ 0.80 paid for Fed Unemployment Tax,
– $ 2.50 paid for NC Unemployment Tax,
– $ 1.00 cost to administration cost,
These cost have force the insured roofing contractor to be much more expensive than an uninsured contractor. The NCDOI has done nothing to inform the public, they don’t have coverage under the homeowners policy for employees injured while employed by uninsured contractors working on their premise.
Thus, the second cause, the contractor violates IRS standards claiming the employees are subcontractors. The contractor pays his employees and issues them 1099’s. Or the employee wants to be paid cash to hide from child support orders. In either case, the IRS and NC DSS have failed the honest employers. Many of these small employers are merely following the lead of large corporations. They call it “out sourcing”.
Thus, the third cause is the under reported payroll. Higher claim costs and under reported payrolls yields a higher lost ratio. A higher loss ratio means higher rates. To my knowledge, the NC Insurance Commissioner has NOT rejected any rate increases on Workers Compensation or Homeowner rates in the last 16 years. Unlike his re-election ploy of rejecting auto insurance rate increases (See previous responses).
The fourth cause is the failure of the NC Insurance Commissioner to enforce NC Insurance Law. While I’m not an attorney, the NC Workers Compensation policy does not provide blanket coverage to all employees as specified by the terms of the contract. The employer must comply with the terms of the contract for the policy to be enforceable. Example: Illegally employed persons whether a minor working without a worker permit or an illegal alien working without a “green card” are not covered by the terms of the contract…if the employer knew they were ineligible for employment. Mr. Long has NOT stopped the NC Industrial Commission from demanding payment from the insurers in these cases. It is NOT the insurer’s problem. The employer is liable party.
Nor has he seriously investigated WC fraud. Clear cut cases have been given to the NCDOI and it has NOT acted.
The fifth cause is simple…fraud is out of control. Was the employee hurt on the job or merely faked the injury at work for a injury which occured at home? The small employers have insurance. The insurers must decide are the legal costs more than simply paying the claim. In many cases, they just pay the claim. The employer’s experience modification factor increases due to the claim payment. This action causes the premium to double or triple.
And lastly, the NCDOI is responsible for overseeing large employer self insured funds. It allows abuse by these large self insured employers. And the NC Industrial Commission treats them softly due to political influence. In North Carolina the Industrial Committee member is appointed by the governor. Liberal governor leads to very liberal appointees with your money. An employee injured at a large retail giant often times can’t get treatment or the 2/3 wages as required by the NC Workers Compensation Act. Many doctors and facilities are refusing to treat these employees. The NC Workers Compensation Act clearly places the burden on the employer and demands timely payment. The small employer gets less unfairly treated by the NCDOI and the NC Industrial Commission.
In conclusion, the NC Legislators, the NC Industrial Commission, and the NCDOI need to think before they act. The solution is as simple as applying the NC Workers Compensation Act evenly and have a NC Commissioner of Insurance to enforce the insurance law and investigate fraud.
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The basic problem with workers’ compensation in NC comes down to its cost. This problem is caused by six fundalmental causes.
First, the government and elected officals don’t think before they act. The labor cost for a roofer in NC comes to $1.53 per $1.00 of payroll for a small employer. This cost does not include the overhead cost for equipment, building and operation. The breakdown is a follows:
– $100.00 paid to the employee,
– $ 6.20 paid to Fed G/F not Soc Sec,
– $ 1.45 paid to Medicare( Part A),
– $ 27.48 paid for Workers Compensation,
– $ 13.80 paid for Comm Gen Liability,
– $ 0.80 paid for Fed Unemployment Tax,
– $ 2.50 paid for NC Unemployment Tax,
– $ 1.00 cost to administration cost,
These cost have force the insured roofing contractor to be much more expensive than an uninsured contractor. The NCDOI has done nothing to inform the public, they don’t have coverage under the homeowners policy for employees injured while employed by uninsured contractors working on their premise.
Thus, the second cause, the contractor violates IRS standards claiming the employees are subcontractors. The contractor pays his employees and issues them 1099’s. Or the employee wants to be paid cash to hide from child support orders. In either case, the IRS and NC DSS have failed the honest employers. Many of these small employers are merely following the lead of large corporations. They call it “out sourcing”.
Thus, the third cause is the under reported payroll. Higher claim costs and under reported payrolls yields a higher lost ratio. A higher loss ratio means higher rates. To my knowledge, the NC Insurance Commissioner has NOT rejected any rate increases on Workers Compensation or Homeowner rates in the last 16 years. Unlike his re-election ploy of rejecting auto insurance rate increases (See previous responses).
The fourth cause is the failure of the NC Insurance Commissioner to enforce NC Insurance Law. While I’m not an attorney, the NC Workers Compensation policy does not provide blanket coverage to all employees as specified by the terms of the contract. The employer must comply with the terms of the contract for the policy to be enforceable. Example: Illegally employed persons whether a minor working without a worker permit or an illegal alien working without a “green card” are not covered by the terms of the contract…if the employer knew they were ineligible for employment. Mr. Long has NOT stopped the NC Industrial Commission from demanding payment from the insurers in these cases. It is NOT the insurer’s problem. The employer is liable party.
Nor has he seriously investigated WC fraud. Clear cut cases have been given to the NCDOI and it has NOT acted.
The fifth cause is simple…fraud is out of control. Was the employee hurt on the job or merely faked the injury at work for a injury which occured at home? The small employers have insurance. The insurers must decide are the legal costs more than simply paying the claim. In many cases, they just pay the claim. The employer’s experience modification factor increases due to the claim payment. This action causes the premium to double or triple.
And lastly, the NCDOI is responsible for overseeing large employer self insured funds. It allows abuse by these large self insured employers. And the NC Industrial Commission treats them softly due to political influence. In North Carolina the Industrial Committee member is appointed by the governor. Liberal governor leads to very liberal appointees with your money. An employee injured at a large retail giant often times can’t get treatment or the 2/3 wages as required by the NC Workers Compensation Act. Many doctors and facilities are refusing to treat these employees. The NC Workers Compensation Act clearly places the burden on the employer and demands timely payment. The small employer gets less unfairly treated by the NCDOI and the NC Industrial Commission.
In conclusion, the NC Legislators, the NC Industrial Commission, and the NCDOI need to think before they act. The solution is as simple as applying the NC Workers Compensation Act evenly and have a NC Commissioner of Insurance to enforce the insurance law and investigate fraud.