First Responders and Firefighters Worry About Implications of North Carolina Workers’ Compensation Defunding

May 31, 2011, by Michael A. DeMayo

As lawmakers mull over how and whether to reform the North Carolina workers’ compensation system, first responders, firefighters, and other volunteers are fretting about what might happen to the Volunteer Safety Workers’ Compensation Fund. This is a fund paid in part by the state and by premiums from 1,300 members, such as firefighters and first responders, to offset North Carolina workers’ compensation coverage costs. It was established in the 1990s, and its current custodians estimate that the fund needs $2 million from North Carolina to survive.

Problem is, the current House budget has allotted just half of that – $1 million – for the fund, and the state may not even make that allocation permanent. In other words, the fund might get $1 million this year, but $0 million the next year. When the fund was established, the original plan was that North Carolina would provide $4.5 million over a period of seven years, until the fund could become self-sustaining. But that amount has been chipped away for various political and financial reasons.

The Executive Director of the North Carolina State Firemen’s Association, Paul Miller, recently voiced concerns about what might happen if the fund fails to be viable. Essentially, the assigned risk pool would have to inflate rates, and this would ultimately lead to the loss of savings that Miller argues are “used to buy equipment, uniforms, and pay for trainings so that North Carolinians can rest assured that they have the very best fire and safety services available.” State Insurance Commissioner, Wayne Goodwin, weighed in on the side of the volunteer workers: “I implore our legislators to fund the Volunteer Safety Workers’ Compensation Fund in a way that allows it to continue to meet its obligation to its members.”

Until the House resolves the debate over potential changes to the law, even a stellar North Carolina workers’ compensation law firm might have a difficult time suggesting an appropriate strategy for firefighters, volunteers, and sick and injured workers. The fact is that, as long as the state’s workers’ comp system remains in a state of limbo, it will be difficult for people, institutions, and funds like this to get a grip on what’s the most appropriate strategy.

More Web Resources:

Volunteer Safety Workers’ Compensation Fund

North Carolina State Firemen’s Association