Proposal for Higher Workers' Compensation Rates Sparking Concern, Controversy

A proposed hike in workers' compensation insurance rates is generating fear among small business owners.

Workers' compensation insurance is intended to safeguard employees that suffer an injury or illness resulting from their job-related duties.  Coverage includes medical and rehabilitation costs and lost wages for employees injured on-the-job.  Businesses in Delaware must buy the insurance.

The Delaware Compensation Rating Bureau (DCRB) filed papers with the Delaware Department of Insurance in August requesting a rate hike for workers' compensation coverage.  If approved in its current form, rates would increase by about 40-percent for nearly all businesses starting December 1st.

On Tuesday, Insurance Commissioner Karen Weldin Stewart issued a terse press release indicating her agency will hold a public hearing on the request the Friday before the general election in which she is seeking a second term.

At a press conference the following day, Stewart's opponent, Republican Insurance Commissioner candidate Ben Mobley, had sharp words of criticism for his rival.  "I am disappointed in our current Insurance Commissioner's apparent lack of commitment to taking control of the situation and helping to resolve this issue for the sake of our small businesses," he said.  "It wasn't until after I notified the press on Monday about today's media briefing that we heard anything from the Insurance Commissioner's office on this issue.  Her one-page press release setting the date for a November 2nd public hearing on the proposed rate hike falls terribly short."

Workers' compensation insurance rates vary by occupation, with higher rates charged for those workers deemed to be performing tasks that place them at higher risk of injury.  For instance, rates paid by an employer for a clerical staffer would be less than those paid for an electrician or a maintenance worker.

For many small business owners, the proposed rate increase represents a troubling threat to their viability.  "This wave of unexpected costs 60 days from now will cost jobs," said Carrie Leishman, executive director of the Delaware Restaurant Association.  "A business now paying ... $70,000 will be paying over $100,000.  Companies, including the hundreds of restaurants I represent in Delaware, will either have to make the hard decision to ... not fill positions or, worse yet, lay off employees."

Mr. Mobley said he wants the Insurance Commissioner to delay the rate filing until more facts can be gathered on the impact the increase could have on Delaware's state and local economies.          

The Department of Insurance hearing on the filing is currently set for November 2nd at 10:00 a.m. at the Department of Justice, 820 North French Street, 6th Floor in Wilmington.