The Georgia workers’ compensation program that covers about 122,000 state workers and University System employees has run a deficit in seven of the past 10 years, a new audit says.
Reserves of $31 million in 2008 were depleted, and now the program will have to ask the General Assembly to come up with extra money during the 2018 legislative session to cover the deficit.
The program pays medical and disability costs for workers when they are hurt on the job. It is largely funded by premiums paid by state agencies.
The Georgia Senate Appropriations Committee asked state auditors to look at the program in part because lawmakers said it didn’t have the money to settle claims.
Settling some of the thousands of workers’ compensation claims from state and university employees by making one-time payments could save the state money, the audit said. Instead, the state is paying medical or disability claims in some cases for years, adding to its long-term liability.
That liability — estimated payments for accidents that have already occurred — grew from $301 million in 2008 to $866 million last year, the audit said.
The top agencies for claims from 2014 to 2017 were the University System, the Department of Corrections, the Department of Behavioral Health and the Department of Juvenile Justice. The University System is the biggest employer among state agencies.
Auditors said the number of accident claims has declined, but the cost per claim has increased. The state often hasn’t allocated enough money to settle claims up front, so many of those hurt years ago continue to receive benefits.
Settling a claim is the equivalent of paying for something in cash, rather than over 20 or 30 years with interest. The one-time cost may be high, but it’s cheaper than making monthly payments.
Because of the deficit this year, the Department of Administrative Services — which bills agencies for workers’ compensation premiums — will ask lawmakers to include an extra $6 million in the midyear budget they will consider during the 2018 session, the audit said.
The midyear budget covers the final few months of the fiscal year, which ends June 30.
Senate Appropriations Chairman Jack Hill, R-Reidsville, said Thursday that he hadn’t read the audit yet, but that his committee knew going into the session it would have to work to fix the system.
“I would assume there will be some attention paid to the workers’ compensation issue,” Hill said. “The long-range plan is it would be cheaper to settle (cases). I would assume we will develop a plan to settle them.”
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