Long ago Oklahoma's legislators made the decision to provide workers compensation for Oklahoma's volunteer firefighters. There is no need for me to explain the buckets of money saved by cities, counties and the State of Oklahoma due to the daily efforts of volunteer firefighters. Volunteers risk their lives and livelihood of their families to serve their communities. So when it came time to pass the Volunteer Firefighter Workers Compensation (VFWC) bill for volunteer firefighters, it was an easy decision for our lawmakers to make. The main purpose of this article is to illustrate the current environment that the VFWC program is in from my perspective.
Originally by Oklahoma statute, CompSource (a state agency), was tasked with administering and processing claims of the VFWC program. Meaning CompSource would receive and process paperwork for signing up departments and then handle the payments of claims when they occur. The State of Oklahoma pays CompSource around $500,000 annually to buy this policy for all uncompensated volunteer firefighters. Even at nearly a half of a million dollars CompSource is willing to walk away from it. Why is this? Its not a stretch to assume the reason CompSource would walk away from this program is due to the losses that they have experienced over the last decade. In 2011, the last published documentation that we have been able to find shows a 5 year loss ratio of 257% or $3,928,000. These losses were calculated from 2005 to 2009. So for every $1.00 CompSource took in, it paid out $2.57. From 2009 to 2016 medical care in Oklahoma has increased every year between 3% and 7%. But the State’s payment of $500,000 has stayed relatively the same, as the losses continue to rise. To add insult to injury, in 2014 legislators passed HB 2201 creating CompSource Mutual. Beginning January 1, 2015, CompSource Mutual was no longer a state agency but now a private company. But there was one string still tying the State to CompSource. You guessed it, the VFWC program. But why should a private company be tied to the State of Oklahoma by statute? This question has been floating around for sometime between the state and CompSource Mutual. How and when to break the tie has been hard to nail down. Why is that?
Our state is once again in revenue failure. Anything that could cost the state more money is out of the question. At $500,000 no other company would take on this program for such a low amount. So what should the state do? You could try and do what Senator Shaw has proposed this year in SB159. He is proposing that the state bid out the insurance program and double the premium to nearly $900,000. This sounds like a great idea but even at the loss ratio's from the 2005-2009 study a million dollars would still not be enough to cover the losses. To an insurance company this program is like holding a live grenade that will blow up every year. If this program ends up year after year bouncing between different insurance companies, there could be a good chance that year after year the premium payment will increase depending on losses.
I know we have painted a bleak picture here, so what should we be thinking going forward to try to fix this. First things first, the State of Oklahoma didn't decide to pay a set amount for workers compensation for volunteer firefighters. What they did decide was that coverage for workers compensation should be provided. The volunteer fire service cannot go forward and take for granted its free workers compensation. We must look at it like we look at our own personal insurance. If you abuse your insurance with tons of claims, we all know your rates will go up. When claims go up; then rates go up. The VFWC program is like a delicate baby bird. We have to take care of it and communicate to others how to handle it. To put that same bird into todays situation would be like throwing it up against a wall repeatedly. Guess what? It’s going to die.
Injury prevention and safe operating practices should be a daily topic. Through personal experience as a safety coordinator with a large corporation, injury prevention awareness can have a profound effect on lowering the rate of injuries. A formal injury prevention awareness program could help our volunteers chances to sustain free workers compensation in Oklahoma. I think we are on the edge of a significant increase in claims due to the increased call volumes and exposures that EMRA’s are about to be faced with. Drivers training programs are not enough. Your service should include courses like Patient Handling if you’re running first responder. Even raising awareness for slip, trip and fall accidents would beneficial. Oklahoma had a fair share of significate injuries from slip, trip and fall claims in 2016.
I will leave you with this. Most volunteer fire departments in the US pay for workers compensation out of their departments budget. I can count only a few that have state ran programs like Oklahoma . Most of these states have vastly diminished coverage and still have to buy a supplement to make up the difference in coverage. Senate Bill 159 passed the appropriations committee on February 22nd. Breaking the tie with CompSource Mutual is inevitable and it will be up to the fire service to get into the right mind frame to sustain it.
Jerrad Van Coots
Jerrad Van Coots is VFIS of Oklahoma's lead specialist. Spending 100% of his time working with Oklahoma's emergency services.