MTPR

Montana Lawmakers Consider Dissolving, Privatizing Workers Compensation System

Feb 8, 2018

State lawmakers are considering dissolving the state workers compensation system, or turning it into a private entity.

A public workers compensation insurance fund is written into Montana’s constitution.

The Montana State Fund insures about 25,000 employers and holds about $1.4 billion in assets. In 2016, about 61 percent of all workers comp premiums in the state — public and private — were paid into the Montana State fund.

This year, state lawmakers in the Economic Affairs Interim Committee are considering separating the state insurance system from the workers compensation insurance market.

Some calling for change point to a study from the state of Oregon that ranks Montana’s workers comp premiums as the 11th most expensive in the county.

Jon Metropoulos, a Helena lobbyist representing a private insurance company urged lawmakers Thursday to turn the state system over the private sector.

“It would be better for employers and employees, and yes, private enterprise in Montana for it to be privatized on a real basis, on a fair basis,” Metropoulos said.

Matthew Rosendale, Montana's Commissioner of Securities and Insurance
Credit Eric Whitney

Montana’s Republican Insurance Commissioner Matt Rosendale, also told lawmakers he would like to see the state fund work more like a private entity, although one that still guarantees insurance, like the current state fund.

However members of the state labor department and the Montana State Fund say data showing Montana’s premiums as some of highest in the nation doesn’t give the whole picture.

Laurence Hubbard is the CEO of the Montana State Fund. Hubbard says that the structure that lawmakers are thinking about changing has nothing to do with premium rates.

“Our board of directors opposes elimination of the Montana State Fund recognizing that we serve in a very noble and important public purpose,” he said.

Hubbard encouraged lawmakers to gather much more information before making a decision about changing the nature of the state’s workers compensation marketplace.

During the 2017 regular legislative session, several bills sought to change the nature of workers compensation insurance in Montana, but a majority of lawmakers agreed that without researching the issue first there could repercussions on the small businesses that rely on the Montana State Fund as a guaranteed insurer for workers compensation.

At the next Economic Affairs Interim Committee meeting in April, lawmakers are expected to indicate their intentions to draft legislation that could change the private or public nature of workers compensation insurance in the state.