North Dakota House Backs Limiting Governor on Workers’ Comp Rates

North Dakota’s House has endorsed limiting the governor’s power to set workers’ compensation rates, with supporters saying the change will counteract business pressure for unjustified reductions.

“It is important from a policy standpoint … that we do everything to protect and ensure a solvent fund for the injured workers,” said Rep. George Keiser, R-Bismarck. “That is what we are trying to do here.”

The Workforce Safety and Insurance agency’s rates are set annually, after an independent actuary examines its assets, potential liabilities and the impact of any benefit changes approved by the North Dakota Legislature.

An appointed board of directors that supervises WSI’s director has had the final say on the agency’s rate-setting decisions for the last decade. However, North Dakota voters endorsed a ballot measure last November that gave the governor authority to hire and fire the agency’s top manager.

This week, the North Dakota House voted 62-32 to approve a bill that limits WSI’s ability to change the actuary’s recommended insurance rates. The legislation says the average rate, as recommended by the actuary each year, may not increase or decrease by more than 5 percentage points.

The measure now goes to the North Dakota Senate for its review. It is one of several workers’ compensation bills set for debate in the 2009 Legislature.

Rep. Jasper Schneider, D-Fargo, opposed the measure, saying it would hamstring the governor’s authority over Workforce Safety only a few months after voters decided to increase his power to oversee its operations.

“The people of North Dakota did vote overwhelmingly to restore some political accountability to WSI,” Schneider said. “This will hinder the governor and the governor’s appointed CEO … to do what he or she may think is right to adjust rates as necessary.”

Keiser and Rep. Rick Berg, R-Fargo, said previous governors from both parties have risked the solvency of the agency’s insurance fund by cutting rates — or implementing smaller-than-needed increases- when its benefit expenses were rising.

Putting limits on the governor’s power to raise or lower rates would help prevent that, argued Keiser, who said he would have preferred a smaller discretionary range.

“We had Republican governors, we had Democratic governors that
played politics with the rate,” Keiser said. “That’s not a good
thing, and it’s really not good for the people that this fund
serves, which are the injured workers … If we have an insolvent
fund, what happens to the indemnity, what happens to the health
care, what happens to the vocational retraining? We’re going to cut
them.”
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The bill is HB1036.