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Presumption law changes bring cost uncertainty


Uncertainties over emerging workers compensation presumption laws in states aiming to cut red tape for first responders to qualify for benefits for cancer or post-traumatic stress disorder have at least two payers making changes to pricing and availability.

Starting in July, Phoenix-based CopperPoint Insurance Cos. will no longer provide workers compensation coverage for fire districts and municipalities in Arizona, where a 2017 law classified several types of cancers as occupational diseases, thus allowing firefighters access to comp coverage. Earlier this year Arizona lawmakers proposed adding more cancers to the list and simplifying the process for firefighters to receive benefits.

One year into the enactment of a Minnesota law that provides PTSD coverage for first responders, the League of Minnesota Cities’ Insurance Fund, a self-insurance pool, raised its premiums by 9% for 2020 after years of 1-2% increases.

Both Copperpoint and the self-insured cooperative say the uncertainties surrounding how much presumption laws will ultimately cost in claims are the cause. Other insurers did not return requests for comment.

The Boca Raton-based National Council on Compensation Insurance, which helps 36 states establish workers compensation premiums based on market activity and claims, has been anticipating increases, according to its reports going back to 2018.

“This is probably one of the most watched legislative topics for us because the PTSD bills have been the most common bills that we have seen to expand benefits,” said Jeff Eddinger, a senior division executive for NCCI.

NCCI has been among several organizations tracking presumption laws for both cancer and PTSD — more than a dozen states have either or both. Several are in the process of considering legislation to either expand the offerings or allow such claims. Costs are a major concern, according to experts. 

At issue is the lack of data from claim activity, Mr. Eddinger said, adding that despite uncertainty, “at this time NCCI doesn’t have plans to explicitly adjust pricing for this due to the difficulty in estimating the impact.”

In Minnesota, one year after the passage of a law that permitted first responders workers comp if they are diagnosed with PTSD, the data is limited, said Dan Greensweig, St. Paul-based League of Minnesota Cities’ Insurance Fund, which covers comp mostly for small cities and towns totaling 4,250 police officers and more than 16,000 firefighters.

Lena Gould, the insurer’s risk analyst, said she expects 18% of claims costs this year will stem from the first responder law enacted in 2019. In its first year, PTSD claims represented less than 2% of the claims among first responders in the state, she said, adding that “uncertainty” in funds available for future claims has the state being “conservative.”

In Arizona, a spokesman for Copperpoint said cancer legislation has created uncertainty, with increases in claims estimated to skyrocket as high as 300%, according to estimates. 

“The presumption law is making the market increasingly volatile and difficult to price appropriately,” the spokesman said. “The new legislation” that would further simplify claims would “worsen the problem.”