NCCI files for 1.9% increase
A Texas-based organization supported by Walmart, Best Buy, Lowe's, and other multistate employers, is exploring pushing for legislation in South Carolina to allow employers to opt out of the workers' compensation system.
The National Council on Compensation Insurance has filed for a 1.9% loss costs increase in South Carolina, effective September 1, 2015.
The requested increase for South Carolina is the highest among 12 southeastern states. NCCI has filed for loss cost decreases everywhere in the region, except for Virginia, where it filed for a 0.9% increase. The group filed for loss costs decreases of 3.4% in North Carolina, a decrease of 3.3% in Georgia, and a decrease of 8.2% in Tennessee.
Loss costs have fluctuated in South Carolina in recent years, decreasing 7.4% in 2014, and preceded by increases of 1.1% in 2013 and 3% in 2012. NCCI reports combined ratios for insurers in South Carolina improved to 100% in 2013, compared to 104% in 2012 and 114% in 2011.
According to separate measures employed by the Oregon department of Consumer and Business Services, South Carolina seems to have stabilized its position against other states in the nation after rapid deterioration between 2002 and 2006. Still, as of January 2014, Louisiana and South Carolina have the highest premium rates in the southeast at $2.23 and $2.00 per $100 of payroll.
Nationwide, the workers' compensation market has been improving steadily. NCCI reports the calendar year combined ratio for private carriers was 98% in 2014, a four-point improvement from 2013 and a 17-point improvement since 2011. "The most recent results show that 2014 was a good year for the industry-and that follows solid results in 2013," reports NCCI President and CEO Steve Klingel.
In other workers' compensation developments, a coalition of large employers headed by Walmart, Lowe's, and Best Buy, among others, is pushing legislation that would allow employers to opt out of the workers' compensation system to create a benefits system more to their liking. The employers are members of the Texas-based Association for Responsible Alternatives to Workers' Compensation (ARAWC), which has said it sees several southeastern states as fertile territory receptive to its opt-out alternative.
To-date, only Texas and Oklahoma allow employers the option of not carrying state-mandated workers' compensation coverage. Opt-out bills were introduced this year in Tennessee and South Carolina, but the proposed legislation did not get very far in Tennessee and was introduced very late in the legislative session in South Carolina. Media reports indicate ARAWC has hired a lobbyist in North Carolina as well, but the group's website only highlights its efforts in Tennessee and South Carolina.
The group says its goal is not to do away with workers' compensation protections but to give employers an alternative to state-mandated coverage, thereby introducing competition which would bring down costs. Indeed, recent opt-out legislation introduced in Tennessee and South Carolina emphasizes that injured workers would receive benefits comparable to what they currently receive under state-mandated coverage.
But as critics have pointed out, such assurances barely cover the tremendous implications of a system expressly set up by employers according to their preferences. Mother Jones, the liberal but well-regarded publication, pointed out that although employers are still required to provide some semblance of workers' compensation, they can write their own rules governing when, for how long, and for which reasons an injured employee can receive medical benefits and wages.