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Premium increases delayed for VFDs
Billy Summers/The Herald-Dispatch Firefighters from the Barboursville and Green Valley volunteer fire departments work a house fire at 4777 Logan St., Huntington, in this Dec. 13, 2009 file photo. BrickStreet Insurance agreed to hold off on increases in workers’ compensation premiums for volunteer fire departments for one year to allow the state time to develop a long-term solution.
Purchase this photoHUNTINGTON -- A Wednesday afternoon announcement brought a collective sigh of relief to volunteer fire departments across the state.
After meeting with Gov. Joe Manchin and West Virginia Insurance Commissioner Jane Cline, BrickStreet Insurance agreed to hold off on increases in workers' compensation premiums for one year to allow the state time to develop a long-term solution.
The rate hike was scheduled to take effect July 1, after BrickStreet officials had claimed they were paying out more insurance payments than they were receiving in premium payments -- spending roughly $7 for every $1 received. BrickStreet Insurance has been the sole provider since the state privatized workers' compensation in 2006.
Projected rate hikes had threatened to cripple departments across the state. The increases varied by department, but fire officials agree that higher bills could affect equipment purchased, training received and services rendered. In turn, that could mean slower response times and higher insurance premiums for homeowners.
Wayne faced a nearly 99 percent jump, which would have about doubled the department's $24,000 workers' comp bill. The increases were smaller for Ona (70 percent) and Barboursville (43 percent).
"It's going to put a heck of a whammy on the fire departments," said Bruce Chapman, firefighter and president of Ona's board of directors. "It's going to hurt them all."
Despite the financial effect on the fire departments, BrickStreet and state officials said the scheduled increase would not have been enough to cover insurer's losses.
"Unless a comprehensive approach to solving this problem is found now, we will continue to have this same annual challenge for years to come," said Virgil Helton, cabinet secretary for the Department of Revenue. "I have instructed the insurance commissioner to provide a report to me identifying the severity of the problem and suggest remedies to determine the best course of action."
Prior to the late-day announcement, House Speaker Richard Thompson, D-Wayne, had called on the commissioner to stay the increase for 60 days to give lawmakers a chance to meet and craft a solution. The West Virginia State Fireman's Association and the West Virginia State Fire Chief's Association both had called upon Manchin to call a special session to address the issue.
Julie Maynard, one of Thompson's constituents, serves as assistant chief for the Wayne Volunteer Fire Department. She believes her agency's paid ambulance service contributes to the proposed doubling of its bill from $24,000 to near $48,000.
"Basically it could (have) shut us down," she said. "A lot of times we are in the red rather than having $24,000 extra to do something with."
Chapman, unsure of specific numbers, said Ona would have gotten money to pay the increase, "from wherever we can beg, borrow and scrape." That could have meant taking money from training and equipment budgets, according to Ona Volunteer Chief Tim McCallister and Barboursville counterpart Paul Hockenberry.
Volunteer fire departments also are concerned about BrickStreet's decision to eliminate Broadform coverage. It provides coverage for officers and directors who send their employees, in this case volunteer firefighters, into hazardous conditions.
Bob Miller, deputy chief and treasurer for the Ohio River Road Department, and others worry that will open officers and board members to potential lawsuits. That could lead to some volunteers leaving their departments, thus again putting residents at risk of losing fire service.
"A person would be crazy to take that risk on his own," Miller said.
There are more than 400 volunteer fire departments in the state, with less than 30 paid departments.
The Kanawha County Commission on Tuesday voted to set aside $30,000 to help its volunteer fire departments cover the increased costs, the Charleston Daily Mail reported Wednesday. Thompson hopes the state can find a solution, but he said other county commissions ought to consider a similar move.
Stephen Zoeller, manager of the Cabell County Commission, said his commissioners are examining the problem, one for which he said has no obvious solution. He said money would have to be taken from other projects to create a fund similar to that in Kanawha County.
"Somebody has to come up with money to pay the premium, and that is where the conundrum comes in," he said. "County commissions are pretty well strapped ... I don't know the answer, but people involved are going to have to sit down and roll up their sleeves and start looking at this problem."
Thompson worries the problem could reach beyond this year's premiums alone. That's because starting next year BrickStreet has the ability to choose who it insures. He worries that could leave fire departments without any workers' compensation at all.
BrickStreet's move now gives lawmakers and other stakeholders time to analyze the problem. According to a release from the governor's office, legislators and several members of Manchin's administration will be working together to develop a "lasting solution for (volunteer fire departments and their workers' compensation insurance carriers."
"This situation affects hundreds of West Virginians," Manchin said. "The VFDs provide a life-saving service to their communities and in doing so, homeowner's insurance rates in those communities remain affordable. We will work to find the permanent solution over the next year to keep (volunteer fire departments) in service."
