Berg wants to look at privatizing WSI

BISMARCK — A Fargo legislative leader says lawmakers will begin exploring whether to make the state’s workers’ compensation agency a mutual insurance company that competes with other insurance companies for the business of covering workers.

Rep. Rick Berg, House majority leader, told the Workforce Safety and Insurance board Thursday that an interim committee he heads will hear next month from two states that recently converted their state-run workers’ compensation funds from state agencies to mutual companies.

Under the mutual company model, which is a form of privatization, its customers—that is, employers—own the company. Berg said a conversion of WSI to a mutual company necessarily puts it into the commercial, competitive marketplace.

Employers can then purchase workers’ compensation coverage from WSI or any other company that wants to enter the North Dakota market, judging each by its rates and quality of service.

He said, however, that the Legislature would continue to “set 100 percent of the benefits, as they do now.”

Berg is arranging for Nevada and West Virginia officials, which recently made the change, to testify at his interim Industry Business and Labor Committee during a meeting July 9-10 in Bismarck.

Berg said that, in Nevada, labor unions favored the change and are happy with it.

That contrasts with labor leaders here. In North Dakota, critics of WSI have for more than 10 years suspected that the Republican majority has had its eye on total privatization—and, they fear, total lack of accountability—of the agency.

North Dakota AFL-CIO President Dave Kemnitz has often noted since the 1997 Legislature made the agency nearly independent (removed from the governor’s control and run by an autonomous board) that state law and agency officials refer to it as “the organization,” in order to deny it is a state agency.

Rep. Jasper Schneider, D-Fargo, a critic of WSI and an attorney who represents injured workers, said Thursday that workers’ advocates have good cause to worry about privatization. “Like any company, they’re not providing service out of the goodness of their heart,” he said.

But he’s open to “all options on the table, given the questionable situation at WSI.”

Berg also told the board he wants to hear about mutualization from NCCI, the National Council on Compensation Insurance Inc., based in Boca Raton, Fla., which manages the nation’s largest database of workers compensation insurance information.

This alarmed a labor representative on the WSI board, Ed Grossbauer of Grand Forks, who said he attended an NCCI meeting and noted that only one speaker talked about injured workers. “All the rest was about the bottom line.”

Grossbauer said other states that have converted funds to mutual companies “because they’re in poor financial condition,” unlike North Dakota, where the fund has a reserve so robust that its board worries about the surplus being illegally large.

Janell Cole works for Forum Communications Co, which owns The Dickinson Press.

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