Peterson, lawmakers spar on WSI surplus

BISMARCK — A Fargo legislator told the state auditor Wednesday that debates about the workers’ compensation agency’s illegally large reserve fund is a “detail.”

Nevertheless, the Legislature’s interim Industry, Business and Labor Committee will consider a bill for 2009 to change the law to allow what Workforce Safety and Insurance is doing, whether currently legal or not.

State Auditor Bob Peterson told the committee he just wants WSI to follow a 2005 law that set minimum and maximum WSI reserve levels between 120 percent and 140 percent of what it would need to pay all claims at once.

WSI admits it has been in violation of the law since it went into effect, Peterson said.

The agency and its board did nothing to address the overly large surplus until last month, when the board OK’d employer dividends that will return $77 million.

The agency’s insistence that it doesn’t have to count millions of dollars in assets is wrong, Peterson said.

Under generally acceptable accounting practices, “their balance sheet is incorrect.”

But Rep. Jim Kasper, R-Fargo, asked Peterson how he could dictate what is counted and what is not.

“This is detail,” Kasper said.

“I’m right because I’m the state auditor,” Peterson retorted. “There is no law that allows this.”

A private accounting firm that did WSI’s last financial audit reached the same conclusion last year.

Peterson said that if the Legislature changes the law to allow what WSI is doing, “I have no problem with that.”

Kasper endorsed a law change “to solve the detail concern… so the auditor doesn’t have to request an attorney general’s opinion on details and instead we can focus on the injured worker.”

But Kasper and other legislators—both Republicans and Democrats—also criticized WSI officials about how claims are handled in some cases. The committee is conducting a detailed study of WSI and related laws before the 2009 session.

The agency is only following the law, WSI officials said.

Rep. Elwood “Woody” Thorpe said it’s unfair workers must wait seven or eight months for administrative hearing results.

“Seven or eight months—(by then) they going to be declaring bankruptcy,” he said.

Kasper and committee Chairman Rep. Rick Berg, R-Fargo, were unhappy with answers from WSI’s chief of employer services, Barry Schumacher, about results of safety grants to employers for programs designed to prevent injuries and claims.

Schumacher said the information is confidential.

If that’s the case, Berg said disapprovingly, legislators should “take another look at” such programs or the laws governing them.

“I don’t know how we can run a safety program without it being transparent and accountable,” he said.

Furness said the agency also agrees that more information would be appropriate.

Kasper grilled WSI’s general counsel, Jodi Bjornson, about reimbursements to injured workers for attorney fees.

Why, he asked, don’t injured workers who win their cases in Supreme Court appeals get all attorney fees reimbursed back through all hearings and court decisions that led to the Supreme Court appeal.

If they have won the ultimate decision from the high court, “shouldn’t we be reimbursing all the legal fees?” Kasper asked.

Bjornson said the agency follows the law that sets caps and other restrictions on paying claimants’ lawyer fees.

“That’s certainly something for you to look at (changing the law on),” she said.

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

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