Montana May Have to Pay Pre-1990 Work Claims

May 3, 2004

The state could be liable for $584,000 in workers’ compensation claims because the 2003 Legislature stripped $18 million out of the insurance fund that covers workers injured on the job before 1990, officials say.

The $18 million was taken from the workers’ compensation insurance fund to balance the 2004-2005 state budget, under legislation sponsored by House Majority Leader Roy Brown (R-Billings).

In return for the cash infusion, the state agreed to cover any unfunded liability the so-called “Old Fund” incurs. Officials from the Montana State Fund announced Friday that the Old Fund is now projected to run over $500,000 in the red by June 30.

The Montana State Fund underwrites workers’ compensation insurance for 28,000 Montana businesses. The insurance, required by law, covers the medical bills and lost wages of workers injured on the job.

“We’re seeing a trend up on Old Fund payments,” Mark Barry, Montana State Fund vice president, told the fund’s board of directors. “We’re projecting that’s going to come in half a million dollars over budget.”

Brown defended the Legislature’s actions and said the state will come up with the money if it must.

The Old Fund is what became of Montana’s old workers’ comp insurance agency that, in the late 1980s, owed $500 million more in potential insurance claims than it could pay.

In mid-1990, lawmakers closed the Old Fund to new claims and started the New Fund, which operates more like a private business and handles claims from July 1, 1990 onward.

Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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