S.C. Workers’ Comp Reform Advances Through House Subcommittee

February 24, 2006

The first step in achieving much needed workers’ compensation
reform in South Carolina was taken this week as the House Business and Commerce subcommittee approved legislation (HB 4427) that addresses many of the major cost drivers that are pushing the system into a crisis.

The Property Casualty Insurers Association of America (PCI) is working with major business groups such as the South Carolina Chamber of Commerce, Gov. Mark Sanford and legislators to secure comprehensive reform before the crisis in the system worsens.

While HB 4427 advanced to the full committee, there were several amendments. As introduced, the legislation incorporated the recommendations of the Governor’s Task Force on Workers Compensation Reform. The bill would have repealed the Second
Injury Fund, put restrictions on repetitive trauma claims and reversed the Tiller v. National Healthcare case that allows non-expert testimony regarding a medical condition.

One of the key changes is an amendment that removed the immediate repeal of the Second Injury Fund. The panel inserted language that would sunset the fund in 2012. However, there is a provision that would trigger the sunset process if assessments do not reduce below $8 million by 2012.

“It is critical that the Legislature implement reforms that will address workers’ compensation costs in South Carolina,” said Robert Herlong, vice president and regional manager for PCI. “These dramatic increases are hurting the climate for business growth and are crippling small businesses. This is a positive first step, but we will continue to urge lawmakers to reinstitute an immediate repeal of the Second Injury Fund. The fund adds unnecessary costs to the workers’ compensation system and the fluctuating nature of the assessments adds a high degree of unpredictability that is detrimental to businesses and insurers.”

This year Second Injury Fund assessments nearly doubled, increasing from $128 million to $253 million. In 2003, the assessment amounted to 13 percent of the workers’ comp premiums paid and now it stands at 46 percent.

In addition to repeal of the Second Injury Fund other key reforms address recent court rulings that encourage litigation and have added a great deal of subjectivity to the system regarding repetitive motion injuries.

Other proposals would reduce subjectivity in Workers Compensation Commission awards by implementing objective standards such as
AMA guides.

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