Meadville Tribune

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March 21, 2014

Cancer insurance law creates financial issues for fire departments

MEADVILLE — Editor’s note: Knowing the hard, unpaid work that area volunteer fire departments put in day after day, The Meadville Tribune has published a four-day series to depict just what it takes to be a volunteer firefighter. We’ve also published this series as a public call to action to help the volunteer departments, which are always in need of funding and more firefighters. Today’s story, which concludes the series, focuses on a state law change that has seen some area municipalities’ worker’s compensation package for their fire departments rise exponentially.

A state law enacted almost three years ago to protect firefighters financially from the impact of cancer has had unintended financial consequences for municipalities by increasing worker’s compensation insurance costs, according to local officials.

“It’s a big problem for us,” Mayor Randy Gorske of Cambridge Springs said of the law change. “A lot of insurance carriers don’t want to add firemen to worker’s compensation insurance packages.”

Enacted in July 2011, Pennsylvania’s Firefighter Cancer Prevention Act recognizes every form of cancer found in a firefighter as a work-related illness for both paid and volunteer firefighters.

Benefits may be paid if a firefighter can establish that he or she was exposed to certain carcinogens at fires or incidents involving hazardous materials. Unlike health insurance, worker’s compensation covers lost wages, rehabilitation costs and death benefits.

A firefighter who serves at least four years has as many as 600 weeks, or 11 1/2 years, after leaving service to file a claim. Before the law, a claim could be filed going back 300, weeks or about 5 3/4 years.

Because of the change in the law, Cambridge Springs has seen its worker’s compensation cost for the fire department more than double in 2014 and had to be a separate package from borough employees.

Cambridge Springs paid $13,100 for worker’s compensation for the borough’s volunteer fire department for 2014. In 2013, when the volunteer fire department was part of the borough’s total worker’s compensation package, the fire department’s portion was $6,000.

For Summit Township, its worker’s compensation packages for township employees and officials was even higher. The worker’s compensation insurance package for the township was $14,039 while its cost for the worker’s compensation package for Summit Township Volunteer Fire Department came in at $15,304.

West Mead Township, which must provide state-mandated worker’s compensation insurance to two volunteers, was able to get its worker’s compensation costs to around $9,000 for 2014 because it has a larger population than Cambridge Springs or Summit Township.

A municipality’s population is a factor in determining worker’s compensation insurance rates, said William Rosenberger, chairman of West Mead Township supervisors and a retired insurance agent.

“We budgeted a lot more (for worker’s compensation for firemen), but it came in less than what we anticipated,” Rosenberger said.

“It’s the municipality’s obligation to pay worker’s compensation insurance,” said Roger Janes, an insurance agent with First National Insurance Agency. “A lot of carriers have dropped out of providing the coverage because of the law change. The number of insurers has dried up by and large.”

Dan Petruso, an insurance agent with BJ Petruso Insurance Agency, agrees.

“Companies have moved out of worker’s compensation for fire companies,” he said. “They want to separate fire companies because they can.”

What subsequently has happened is a lot of municipalities have no choice but to sign up for coverage through the State Workers’ Insurance Fund for the state-mandated coverage. But, it’s meant a significant increase from premiums the past couple of years because of the lack of private-insurer alternatives.

It’s causing already tight budgets in small municipalities to be stretched even more.

“The good thing is we had carryover money (from the 2013 budget) in our general fund,” Gorske said. “We use it for emergencies.”

Gorske understands the idea behind the law to help protect the firefighters.

“The Legislature didn’t look at the ramifications and this is a good example of it,” Gorske said. “We’re stuck with the payments.”

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