The Markell administration has asked for a delay in the early November hearing regarding a hefty increase in workers compensation insurance premiums.
The increase, if approved, could again put Delaware in jeopardy of losing jobs and companies to adjacent states where premiums are lower. The hearing was scheduled earlier by the state insurance commissioner.
The News Journal reported on Tuesday that the state Insurance Department had agreed to delay the hearing until after the November election. However, no notice of the change had been posted as of Tuesday afternoon.
In a letter signed by Labor Secretary John McMahon and Delaware Economic Development Office head Alan Levin,wrote the increases would amount to between 46.8 and 52 percent over current tariffs, which had already risen 11 percent last year under an Insurance Department Ruling.
“The increasing cost of workers’ compensation insurance will directly hit the bottom line of Delaware businesses, particularly those businesses that have already been hard hit by the economy, such as the construction industry, the manufacturing sector, and small businesses like restaurants,” the lettter noted. “Although Delaware’s economy is faring somewhat better than the national average, it will undoubtedly cause substantial challenges if Delaware employers face increases of 40-52 percent in the cost of workers’ compensation insurance. This could cost the average Delaware business thousands of dollars, and limit its capacity to grow and put Delawareans back to work. Worse yet, such exorbitant premium increases could force layoffs of existing employees.”
Legislation aimed at reforming the workers comp system had passed the General Assembly in 2007, a move that backers said would save employers tens of millions of dollars a year through steps that included caps on medical payments and a focus on rooting out fraud.
However, premiums will need to rise sharply, due to high claims, according to the bureau that oversees the program and recommends rate increases. It has set a Dec. 1 deadline for implementing an increase.
