The Statesville City Council has authorized the transfer of $135,000 from its health insurance fund to cover a temporary shortfall in the city’s workers compensation fund. The transfer was approved at the Jan. 12 meeting and necessitated in large part by two serious accidents last year involving the police department.
“Workers’ compensation claims’ costs continue to grow this year, due in large part to a few incidents resulting in long-term claims with high medical and indemnity costs,” said Assistant City Manager Lynn Smyth. “The claims associated with car wrecks resulted from accidents in which the city driver was not at fault and we would expect to recover the majority of what has been paid to date, which is $84,772.”
The first of the two major accidents happened April 30 when a police vehicle was conducting a stop, with two officers inside and another standing next to the car that had been pulled over. Another motorist struck the rear of the police car, injuring the two officers inside and causing the vehicle to move forward and strike the stopped vehicle. In turn, the officer standing at the stopped vehicle was knocked down and injured as well.
Also, on July 21, a motorist struck the rear of a city police vehicle, seriously injuring the officer inside it. Two of the four officers injured are back at work; the other two are still out.
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Smyth noted that when workers’ compensation claims spike, as they did in the past year, it raises the question of whether self-insurance is the city’s best funding alternative for the program. “Based on the numbers and quotes we have been provided by our brokers, self-insuring does save the city considerable money over time although during these peak claim years, we feel the pinch some.”
The only other municipality in the Lake Norman area that self-insures its workers compensation costs is Mooresville. “We carry a $500,000 stop-loss policy,” said the town’s risk and safety manager, Christopher Russell. “There has been no recent conversations regarding changing this.”
Davidson, Huntersville and Troutman are members of a pool and purchase coverage through the North Carolina League of Municipalities. “We’re just not big enough to be self-insured,” said Davidson spokeswoman Cristina Shaul. Cornelius bids its workers comp program annually and is currently using Key Risk Insurance with an annual premium of $104,982. “We routinely consider self-funding,” said the town’s finance director, Jackie Huffman, “but based on our appreciably lower headcount than Statesville, the self-funding option is not cost beneficial for us.”