Firefighters Insurance Is Taxing Municipalities in Pennsylvania

By Karen Shuey and (Lancaster) Sunday News | April 15, 2013

Firefighters have a dangerous job.

They run into burning buildings in the midst of panic and chaos, wade through thick smoke in search of life and keep precious mementos from turning to ash.

That’s why most people expect that when firefighters are sick, the public will answer their call for help.

But it’s not that simple.

Local municipal leaders in Pennsylvania are asking state lawmakers for help as they struggle to pay higher insurance costs without passing the burden onto taxpayers in the process — an unintended consequence of a law enacted to aid firefighters diagnosed with cancer.

The law, known as the Firefighter Cancer Presumption Act, provides compensation for firefighters who develop cancer and can establish it was caused by exposure to carcinogens at a fire or hazardous-material accident.

While the law received nearly unanimous support in the Pennsylvania legislature, it is now being reviewed as municipalities across the Commonwealth of Pennsylvania and in Lancaster County struggle to find affordable workers’ compensation coverage.

Ed Arnold, president of the Lancaster County Boroughs’ Association and manager of Millersville Borough, Lancaster County, said the trouble started when some insurance companies began dropping coverage for volunteer firefighters.

Forced to find new carriers, local officials found that premium costs had doubled or even tripled in some cases.

“Finding new coverage isn’t really the problem, but paying for it is,” Arnold said. “Legislators passed the bill with good intentions, but it could lead to multimillion dollar claims that mean higher premiums for us.”

The law, which got unanimous support from legislators representing Lancaster County, was passed in July 2011. Since then, 90 firefighters have filed petitions seeking workers’ compensation under the provision, according to Sara J. Goulet of the state Department of Labor and Industry.

Under the legislation, a firefighter would have to participate in continuous firefighting duty for four or more years and have successfully passed a physical exam prior to service to be eligible. The burden is placed on the municipality to prove that hazards experienced on the job were not a major contributor to a cancer diagnosis.

State Rep. Gordon Denlinger said that while claims have been filed, he believes insurance companies are leaving the market before the full effect of the law is seen.

“It’s troubling, and a bit puzzling, that insurers are dropping coverage before a single case has been decided at this point,” the Narvon Republican said.

Unable to find cheaper, private insurance coverage, municipal leaders are opting into the State Workers’ Insurance Fund or other organizations that work solely with municipalities to form a shared risk pool. But those plans are costly.

Robert Anspach, director of insurance services for PennPrime, said he and other insurers were told that few workers’ compensation claims would be made under the law, but that’s not the case.

“There could potentially be a very large number of people who bring suits and we need to be prepared,” he said. “The only way to build up funds is to increase rates, which trickles down to the taxpayer.”

And in the case of cities with professional companies, residents could be on the hook for even higher costs.

Unlike communities with volunteer forces that can opt into risk-sharing programs, Lancaster city is self-insured and must build its fund alone.

“Just one claim has the potential to wipe us out,” said Lancaster city Mayor Rick Gray.

Gray and Anspach said the law is too broad and, therefore, impossible to plan for financially.

But a few changes, Anspach said, could help bring premium costs under control. He suggests limiting the cancers eligible for claims, giving municipalities more control over volunteer companies and reducing the time a claim is allowed to be filed from 600 weeks to 300 weeks after service.

Art Martynuska, president of the Pennsylvania Professional Fire Fighters Association, is not a fan of those proposals.

“We don’t have that many cases, so I don’t know why the insurance companies are behaving this way,” he said, adding that 30 states have adopted similar measures.

Martynuska said the details of the bill had been vetted thoroughly by all the stakeholders before being enacted.

“We had been working on getting this passed for the last 25 years and the insurers were part of the discussion, that’s why this has blindsided us,” he said.

State Fire Commissioner Ed Mann said he understands local officials may be forced to raise taxes to pay the higher premiums, but that the law is needed to protect those that protect others.

“It’s unfortunate, but there is a cost to everything we do and that includes the hazards we face on the job,” he said.

State Rep. Mike Sturla agreed.

“We expect firefighters to run into burning buildings without question, not knowing what they might find or what they could be breathing,” the city Democrat said.

State Sen. Lloyd Smucker said support for the bill is still high among members of the Legislature, but many have started to discuss ways to ease the burden on municipalities.

“We were told the number of cases that would apply under the bill was small. But we have dozens of cases, so it may have a broader scope than we thought,” the West Lampeter Township Republican said.

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