West Virginia’s BrickStreet Won’t Insure Firefighters, State Agencies

Article

The company created by West Virginia to provide workers’ compensation insurance no longer wants to cover state agencies, prompting lawmakers to consider alternative policy options.

The Senate Finance Committee learned this week of the possible change by BrickStreet Mutual Insurance Co. The Legislature set up BrickStreet in 2005 to replace what had been a state-run system. It spun off as a private company the following year, and competing insurers entered that market in 2010.

Committee members quizzed BrickStreet chief executive Greg Burton before endorsing a bill Tuesday that would allow the state insurance commissioner to help agencies obtain coverage from other private insurers.

Burton said BrickStreet has lost $30 million over the past three years from claims by state agencies and volunteer fire departments. For every dollar it collected from them in premiums during that time, Burton said BrickStreet paid out $1.36. Last year, these policyholders cost $1.57 for every dollar in premiums.

“We cannot handle that kind of program any longer,” Burton told committee members.

But Burton said the bill could prompt BrickStreet to reconsider, citing provisions meant to improve workplace practices.

“A number of the agencies don’t drive home safety and loss prevention-type techniques and return to work programs,” Burton said. “You have some agencies that are doing that, and we saw it was working well for them and their claims have gone way down. You have some agencies that just would not do that.”

Burton said the state Senate was among the worst, costing BrickStreet $1,479 for each premium dollar. He did not have details for the claims behind those losses.

Privatized under a plan by then-Gov. Joe Manchin, the state-run workers’ compensation system was plagued by costly claims, fly-by-night employers who skipped out on premiums and other problems. Sen. Walt Helmick sought assurances from Insurance Commissioner Jane Cline that West Virginia would not resume providing that coverage.

“I don’t want to be part of anything that might have any indication that it’s going to be back in the state’s hands,” the Pocahontas County Democrat said during this week’s meeting.

“We do not, either,” Cline said. “We will be involved no more than we are today… State agencies will be covered by private market insurers.”

Sen. Truman Chafin, D-Mingo, balked at what he called a power grab by Cline’s office in the bill. He and other committee members questioned provisions allowing Cline to set fees and waive state purchasing rules while bidding out coverage contracts.

Cline said the bill aims to provide flexibility as her office considers whether to pursue individual policies or comprehensive coverage for multiple agencies, based on the varying levels of risk.