Rough riding for workers’ comp on the racetrack

By | August 21, 2006

The problem of providing workers’ compensation insurance for jockeys and backstretch workers, such as grooms and exercise riders, in the horse racing industry is a complicated one. Only four states — California, Maryland, New Jersey and New York — mandate workers’ compensation coverage for jockeys and exercise riders.

The Kentucky Legislature in Spring 2006 considered setting up the Jockey Injury Corp. and the Kentucky Jockey Injury Fund to provide workers’ comp insurance coverage for thoroughbred jockeys but the state Senate nixed the idea, passing a workers’ comp bill without it.

While grooms and exercise riders are often employees of the racing stable for which they work, jockeys are considered independent contractors. On a race day it’s conceivable that they could ride as many as 10 horses a day, all owned by different stables. The Maryland Jockey Injury Compensation Fund, however, considers jockeys who are licensed with the Maryland Racing Commission to be employees who are entitled to workers’ compensation.

The premiums are paid by an assessment on Maryland-licensed thoroughbred owners and trainers. According to Mike Hopkins, executive director of the Maryland Racing Commission, which manages the injury fund, the assessment usually runs between $70 and $200 per year. The coverage, secured through the Maryland Workers Insurance Fund, a quasi-state government entity, applies only to Maryland-licensed jockeys.

Trainers in Maryland are required to carry a separate workers’ comp policy for their backstretch workers. In the early years of the fund, which was established in 1986, the group found that 30 percent of claims were coming from injuries sustained by backstretch workers in morning training hours, which the fund was not specifically designed to cover. Since the separate policy for those employees has been required, claims have fallen 30 percent. Hopkins said that although there have been claims resulting from serious injuries, the fund has not taken a huge hit, “nothing catastrophic.”

Is federal oversight necessary?
States are not alone in addressing the issue of coverage for jockeys. The U.S. House of Representatives Energy and Commerce Subcommittee on Oversight and Investigations has held a series of hearings in the past year on the health and welfare of jockeys and other industry workers. The panel also has considered adding federal oversight of the racing industry — the regulation of which is currently handled by each state.

Much of the testimony in the most recent hearing, held May 9, centered on the management and financial status of the Jockey Guild, a national association of licensed professional jockeys, and the failure of its on-track catastrophic injury insurance fund.

The Guild’s previous president and several associates were found to have mismanaged the association’s finances for their own gain over a period of four years, and to have allowed the Guild’s catastrophic insurance policy to lapse without the knowledge of its members. Jockey Guild Interim National Manager Darrell Haire told federal lawmakers that the previous management had left the association nearly bankrupt and facing close to $500,000 in unpaid medical bills.

The association’s problems were highlighted when jockey Gary Birzer, a member of the Guild, was paralyzed in a July 2004 accident at Mountaineer Race Track in West Virginia. While the track at the time carried $100,000 in on-track catastrophic coverage, the insurance Birzer thought he had through the Jockey Guild turned out to be nonexistent. In early August, Birzer settled a $10 million suit filed against the Guild and its former management. The financial terms of the settlement were not disclosed but The Associated Press reported that it “includes five years of health insurance coverage for Birzer and his family, as well as a public role with the guild, advocating for other disabled jockeys.”

Insurance coverage fell apart “as a result of the mismanagement of the Jockeys’ Guild’s affairs, and I think what we will see is the re-establishment of a credible body to represent jockeys within the industry,” D.G. Van Clief Jr., CEO of the National Thoroughbred Racing Association, told The AP after a hearing last fall at which Birzer testified. “Once that job is complete, I think we will be able to re-establish a safety net of insurance at all of our venues and protect those riders.”

Subcommittee member U.S. Rep. Ed Whitfield, R-Kentucky, has expressed concern about safety and insurance gaps for jockeys. According to Dennis Oelschlager, executive secretary of the Nebraska State Racing Commission, the rules of the Association of Racing Commissioners International are “silent on workers’ compensation,” largely because “workers’ comp is governed by state statutes, which vary considerably state by state.” However, Oelschlager said, most tracks carry on-track accident insurance, which has increased in the past few years from limits of $100,000 to between $500,000 and $1 million.

“Horse racing is a multi-million dollar industry, and there is more than enough money to go around to ensure that jockeys, trainers, and backside workers have access to adequate health insurance as well as on-track catastrophic injury coverage,” Whitfield said. “It has been my hope that all industry participants — including the tracks, horsemen’s groups, owners, jockeys, and workers — could have come together to resolve these basic issues of health and safety. However, because industry regulations vary from state to state, I believe that federal legislation is necessary, and I plan on introducing a bill soon,” he said in a statement.

According to John Unick, vice president and national sales manager of San Francisco-based MOC Insurance Services, tracks typically carry between $500,000 and $1 million worth of accident medical insurance, but in states such as Texas, where workers’ comp coverage is not mandatory, the weekly disability benefit would only be about $200 per week for two years.

Topics Legislation Workers' Compensation Maryland Kentucky

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Insurance Journal Magazine August 21, 2006
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