North Carolina Gov. Perdue Signs Workers’ Comp Scofflaw Bill

By | July 2, 2012

North Carolina Gov. Bev Perdue has signed a bill designed to crack down on employers without workers’ compensation coverage despite opposition from media groups that objected to the fact the employer information will not be a public record.

State lawmakers last week approved HB 237, sponsored by Nelson Dollar, R-Wake, in response to public criticism over the state’s lax efforts to enforce the workers’ compensation law so that so that injured workers receive proper medical care and loss wages.

Under the new law, information submitted by insurers on employers’ coverage status collected by the privately run non-profit North Carolina Rate Bureau must be shared with the state-run Industrial Commission, which is charged with ensuring employers have coverage and adjudicates workers’ compensation claims.

Media groups, however, objected to a provision that calls for the information sent by the Rate Bureau to the commission to remain private due to proprietary concerns.

John Bussian, an attorney who specializes in First Amendment cases and represents the North Carolina Press Association, said the media groups had met with Kevin McLaughlin, the governor’s deputy chief of staff, to express their concerns.

“The fact is neither the media nor the government can gauge whether employers are complying with the workers’ compensation law without that database,” said Bussian.

Ironically, it took newspaper reporters to uncover the state’s lax enforcement efforts, which created the impetus for the bill. The Raleigh-based News & Observer ran a series of articles in May documenting how thousands of employers skipped coverage leaving injured workers to feign for themselves. The investigation found that although employers are required to inform the Industrial Commission when they purchase, renew or cancel a policy, the commission rarely accesses the information from the Rate Bureau until a claim is filed.

And in many cases where the employer was found to not have coverage, the investigation found that the Industrial Commission rarely penalized the employer.

By requiring the commission to capture all the information from the Rate Bureau, lawmakers sought to improve the flow of employer data so the commission could enforce the law before a worker files a claim.

But by allowing the Rate Bureau to claim that the employer data is proprietary, the media groups claim it would end the transparency needed to inform the public about the workings of the workers’ compensation system.

“If the data from the N.C. Rate Bureau is made private we would have not been able to publish this story,” said News & Observer Executive Editor John Drescher.

In addition to the News & Observer, other organizations that called for the veto include the North Carolina Press Association and the North Carolina Association of Broadcasters. The editorial boards of the state’s major papers also called on Perdue to veto the bill.

Bussian said that under the broad language of the provision, the Rate Bureau could essentially make any employer information private, which would also affect injured workers’ ability to find out whether their employer is providing them coverage.

Currently, workers can go to the Industrial Commission’s website and check on their employer’s insurance status.

“The Rate Bureau could claim that every piece of information is a trade secret and proprietary, when it may be no more than one page out of 50,” said Bussian.

State lawmakers were not unaware of the problems the provision could create when they approved earlier this month.

Rep. Deborah Ross, D-Wake, said the provision could be problematic since it would in effect create a third database by merging the Rate Bureau’s private data with the Industrial Commission’s public data. She said that could add to the time it takes to adjust claims if the Industrial Commission and Rate Bureau are continually at odds over what is public and what is private information.

But other lawmakers defended the provision, saying it is necessary to protect employer information such as their experience modification and rates.

Bussian, however, said that argument is based on the theory that other insurers may use the information to market to employers. He noted that there already is a process in place whereby judges can rule whether any information is a trade secret or not.

“There is always an argument that this type of information can be monetized,” said Bussian. “But the reality is this is just part of the process of doing business in the state.”

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