The City of Warren could face a six-figure increase in the cost of workers' compensation insurance.
City Manager Nancy Freenock explained on Monday that the original quoted increase was $188,000 but explained that because the city was able to receive a state rate, that increase currently stands at $100,000.
Freenock told council that there are several outstanding bids that could potentially reduce the increase further. She said that city is "waiting to see if beating the state rate is possible."
She said that there was a "large increase in fire" but noted that insurance "went up in all periods (because of) several serious claims over the past several years...The insurance companies are going to charge what the market will bear."
One of the primary factors that has driven up workmens' compensation costs for municipalities across the state is a relatively new provision that allows firefighters to file a claim if they are diagnosed with cancer and can link their diagnoses to chemicals they faced fighting fires.
"The problem from the insurance companies perspective, in Pennsylvania the employer is given the burden of proof," Freenock explained. "The city in this case does have the burden of proof," meaning that it is the city's responsibility to dis-prove the claim.
"We had three actions filed," she said. "One was dropped but there were litigation fees with it."
It was discussed that some insurance providers want to get out of the workmens' compensation field and are making their rates unreasonable to do just that.
Andy Moore, president of the International Association of Firefighters, Local 1835, which represent the City of Warren fire department, noted that "what they (insurance rates) have gone up, if they're not criminal...there are formulas out there for them to push proper increases upon us."
He explained that the city has two retired firefighters who have had cancer, one living and another deceased, that have filed claims.
Coverage under workmens' compensation "is a 29 year fight," Moore explained. "At the end of the day, the insurance carriers are just throwing up their hands. There were 25 states that have cancer presumption."
"Having two claims over the years, all things considered, is not great but is not too bad that we should have to increase our rates by 286 percent," Moore added. "My suggestion to council, think about possibly looking into a buying program" like the Council of Governments, who can make shared purchases to share costs. "Look into getting workmen's compensation that way," he said.
Moore defended the cancer presumption. "Firefighters don't want to have to use it but it is good to have if needed. Why should our health care premiums skyrocket when it should be covered by workmens' comp."
He explained that those who have filed claims under the presumption aren't getting settlements as of yet.
Moore also pointed out that all cancers are different. "Just because somebody says its lung, prostrate...the cancer can be different. Everyone is treated differently."
Speaking to council, "I just want you folks to know, this isn't stuff that just showed up one day and should have been a surprise."