FISCAL NOTE
Date Requested: January 12, 2024
Time Requested: 05:24 PM |
| Agency: |
Workers' Compensation |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2540 |
Introduced |
HB4687 |
|
|---|
| CBD Subject: |
|
|---|
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FUND(S):
7163 Uninsured Employers Fund
Sources of Revenue:
Special Fund
Legislation creates:
Creates New Expense, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
House Bill 4687, if enacted, would repeal the law which makes prime contractors liable for the failure of subcontractors to make proper payments for workers' compensation coverage.
HB4687, if enacted, would have a significant impact on the Uninsured Employers Fund (UEF).
Please see memorandum section of the fiscal note for additional information.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2024
Increase/Decrease
(use"-") |
2025
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
Memorandum
House Bill 4687, if enacted, would repeal the entirety of W.Va. Code 23-2-1d entitled Prime Contractors and Subcontractors Liability presumably with the intention of eliminating the responsibility of prime contractors being responsible to ensure that any subcontractor with which it directly contracts is either self-insured or maintains a policy of workers' compensation insurance coverage. Present law provides that if a subcontractor is neither self-insured, not covered by a workers' compensation insurance policy, then the prime contractor rather than the state's Uninsured Employers' Fund (UEF) is responsible for payment of statutory benefits: provided, that receipt of the prime contractor of a certificate of coverage from a subcontractor shall be deemed to relieve the prime contractor of responsibility regarding the subcontractor's workers' compensation coverage.
The WVOIC does not presently have data on how many claims would go into the state Uninsured Employers' Fund, in lieu of being covered by a prime contractor's workers' compensation insurance policy, if House Bill 4687 were to pass. However, it is likely that the passage of this bill would impact the state's Uninsured Employers' Fund (UEF), which is administered by the WVOIC, by causing more claims for injured employees of uninsured subcontractors to become the responsibility of the state, instead of being the responsibility of the prime contractor through its policy of workers' compensation insurance. It may also cause increased expenses in the WVOIC's legal division and employer coverage division, in regard to uninsured employer compliance and subrogation efforts on behalf of the Uninsured Employers' Fund (UEF).
The WVOIC has not had to issue an assessment in order to raise funds for the Uninsured Employer's Fund (UEF) since its creation in 2006. However, in the event that additional funding is needed, the WVOIC has the statutory authority to issue an assessment to private insurance carriers, which may be passed on to employers through a policy surcharge, as well as to self-insured employers to raise the necessary funding for the Uninsured Employers' Fund (UEF).
Person submitting Fiscal Note: Rhonda Hartwell
Email Address: rhonda.c.hartwell@wv.gov