W.Va.’s Reversal of Workers’ Comp Policy Could Increase Rates

April 17, 2006

The sole workers’ compensation insurer in West Virginia says it will seek a rate increase as a result of Gov. Joe Manchin’s reversal of a state policy that limited benefits to widows and widowers of people who died from work-related injuries and illnesses.

BrickStreet Mutual Insurance Co. said ongoing payments to 142 widows and widowers whose benefits will be restored by the governor’s decision will cost the company millions of dollars, requiring a rate increase. A BrickStreet spokesman said it is too early to say how much of an increase the company will seek.

The National Council on Compensation Insurance has a contract with the state to set new rates for West Virginia by July 1.

Manchin has directed Insurance Commissioner Jane Cline to restore benefits that were cut off because of the policy. “The state of West Virginia will keep its commitment,” Manchin said in a statement issued Friday. “It is without a doubt the right and honorable thing to do.”

The Workers’ Compensation Commission adopted the policy in 2004 that allowed it to refuse to pay benefits to survivors after their deceased spouses would have reached 70. If benefits were awarded before 2003, those benefits could be cut off after the deceased spouses would have reached 65.

The policy was never approved either by the Performance Council, which then oversaw Workers’ Compensation, or by the Legislature. The Workers’ Compensation Commission has since become BrickStreet, which is a private company.

Manchin said his administration’s review of state law found that widows and widowers whose spouses died from work-related injuries or illnesses must receive workers’ compensation benefits until they remarry or die.

“Although some have asserted an ambiguity in the code on this issue, the legal professionals I have consulted with have ultimately concluded that the code requires the payment of such benefits,” Manchin’s statement said.

BrickStreet said paying people who would have been cut off will cost the company $30,000 per person for each year after their deceased spouses would have turned 70.

Manchin also said the Insurance Commission and BrickStreet will continue to make sure all claims for such benefits meet the criteria.
“We must protect our workers and their families,” Manchin said. “At the same time, we must also act responsibly in order to keep the system viable and intact.”

Several widows had appealed the loss of benefits to the state Supreme Court, which scheduled arguments for May 10. The Workers’ Compensation Board of Review had also scheduled hearings on appeals beginning May 24.

Manchin’s decision likely will make those hearings moot.

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