A bill protecting people with workers’ compensation claims against insolvent insurance companies is making its way through the state Capitol.
House Bill 1364 allows employers whose workers’ compensation insurance providers have been declared insolvent to buy into the state’s insurance insolvency pool by October.
The bill is sponsored by Gainesville Rep. Carl Rogers. Rogers said he wrote the bill after Atlanta-based Southeastern U.S. Insurance Inc. was declared insolvent Oct. 27.
The action left nearly 90 employers holding the bill for their employees’ medical costs from injuries on the job.
Since Southeastern U.S. had become a traditional insurance company — which pays into the state’s insolvency pool — on June 23, 2008, anyone who had filed a claim with it after that date was covered by the state when Southeastern was declared insolvent.
But those who had outstanding claims for injuries that occurred before June 23, 2008, were not.
Those left without help to pay their medical bills included Gillsville resident Kenny Whitey, who suffered a catastrophic head injury on June 20, 2008, while on the job and now requires around-the-clock care.
Since his injury occurred three days before Southeastern became a traditional — instead of captive — insurance company, his medical bills cannot be paid by the state’s insolvency fund.
“It’s a very difficult and tragic ending to a lot of employers and employees that could be taken down because of this,” Rogers said.
“Most employers, the only remedy they have to remove themselves from the liability is to file Chapter 11. Of course, that leaves the injured employee with no help, no way to take care of their medical needs or indemnity. It’s a very, very difficult situation.”
Rogers’ bill would change that.
The bill would allow those employers like Whitey’s to pay into the state’s insolvency pool to have their employees’ outstanding claims paid by the fund.
Employers with less than $25 million in assets would have to pay $5,000 by Oct. 1 to buy into the pool; employers who had more than $25 million in net assets — like the various school systems and county governments who had claims with Southeastern — are required to pay $20,000.
Rogers said the costs may change before the bill makes it to the House floor, but it already has the support of the state’s insurance commissioner, said spokesman Glenn Allen.
The bill passed the House Industrial Relations Committee on Thursday and now awaits the approval of the Rules Committee before it has the chance of a full House vote. It must pass both chambers and be signed by the governor before the bill is enacted.
“It’s got a ways to go,” Rogers said.