By Phil Kabler
The Charleston Gazette
CHARLESTON, W.Va. — With volunteer fire departments around the state dealing with up to 700 percent increases in workers’ compensation premiums, the state fire marshal said Wednesday he’s concerned that a $5 million state fund set up to help offset those costs will be exhausted before the year is over.
“We’re afraid we’re going to run out of money,” Fire Marshal Sterling Lewis told a legislative interim committee studying the retention of volunteer firefighters.
When workers’ compensation was a state-run program, and during BrickStreet Mutual’s transition to become a private insurance carrier, rates for coverage for volunteer fire departments were calculated based on the minimum wage.
However, claims for lost work-time injuries were paid based on the firefighters’ “day” job wages, resulting in claims losses in excess of $4 million a year for Brickstreet, which stopped underwriting VFDs effective July 1. Policies for individual VFDs will expire at different times throughout the year.
“We admit we had a ride for years on workers’ comp premiums, but now it’s caught up with us,” Lewis told legislators.
Now, premiums for VFDs are calculated based on the average salary for professional firefighters in the state, currently just over $15 an hour.
During the 2011 regular session, the Legislature and Tomblin administration set up a $5 million pool to help VFDs pay the higher premiums, but Lewis said he is concerned that even with the state funding, some departments may be unable to come up with their share of the premiums, which must be paid in an up-front lump sum for the full coverage year.
That was almost the case last month for the Bradley-Prosperity Volunteer Fire Department in Raleigh County, which avoided a shutdown only after an anonymous benefactor donated the $33,000 it needed for its lump-sum payment for workers’ comp.
Had that department closed, Lewis said, three adjoining VFDs would have had to cover the area, which would have had a serious impact on the insurance rate classification for homes and businesses.
Without adequate fire coverage, Lewis said a typical homeowners’ insurance policy for the Bradley-Prosperity area would have jumped from about $400 a year to nearly $1,500.
Sen. Corey Palumbo, D-Kanawha, said the Fire Marshal’s office should publicize that issue, particularly since a long-term solution to the workers’ comp problem will likely require a permanent infusion of taxpayer dollars.
“There’s going to be no way to solve this without government money involved,” Palumbo said.
Lewis agreed, noting, “There’s got to be a continual funding stream that’s dedicated to this.”
The $5 million pool is a one-time only appropriation.
Another funding source could be fire service fees for VFDs, similar to those in cities with paid fire departments, but Lewis said many county commissions are reluctant to impose such fees.
“The county commissions in the counties that don’t do it don’t have the guts to put it on the ballot,” he said.
Copyright 2011 Charleston Newspapers