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STATE BOOSTS EFFORTS TO ENSURE ALL FIRMS ARE PROPERLY INSURED

SHARE STATE BOOSTS EFFORTS TO ENSURE ALL FIRMS ARE PROPERLY INSURED

Dozens of Utah company officials believe they are saving money by not acquiring workers' compensation insurance to cover their employees in the event of injury.

The law, with few exceptions, requires all companies with one or more employees to have workers' compensation insurance. Aside from the legal aspect, State Industrial Commission officials believe it is in a company's best financial interest to have insurance.A company cannot make money while the doors are closed, and the commission has the power to close companies until they get the required insurance, whether it be through self-insurance, a private insurance carrier or the Workman's Compensation Fund of Utah.

Commission Chairman Stephen M. Hadley said a company without workers' compensation insurance is liable for payment of benefits and medical care. If a company refuses to comply, the Uninsured Employer's Fund will pay the benefits and then seek reimbursement from the employer, even to the extent of forcing the employer to sell assets.

Joyce Sewell, director of the commission's Industrial Accidents Division, estimates 10 percent of Utah businesses don't have workers' compensation insurance. In the past few months, her four-person compliance section, with the help of commission attorney Benjamin Sims, has been concentrating on identifying the uninsured companies and forcing them to comply.

Sewell said workers' compensation premiums are paid on the basis of job classification ranging from 29 cents per $100 in payroll for clerical workers to $26 per $100 in payroll for roofers. It all depends on the amount of risk to which the workers are subjected, she said.

Sims said that in the program to see that all Utah companies have workers' compensation, his first job is to identify those without insurance. Sims said many companies are new and the owners are unaware of the insurance requirement.

The uninsured companies are sent two letters and given 30 days to comply. If the employers claim they didn't receive the letters they are sent a certified letter and given 15 days to respond. If they don't respond, Sims has the option of having the Occupational Safety and Health Administration cite the employer for maintaining a hazardous workplace.

When contacted, many tell the investigators the people who work for them are independent contractors responsible for their own insurance and hope they can get away without having insurance.

Sims said that in September his office started investigations on 270 employers and that 132 of those obtained insurance, providing coverage to 1,011 more employees.

Between April and September, Sims was involved in 151 cases of employers without workers' compensation insurance. He filed papers in district court against 40 of these and obtained temporary restraining orders closing them down for 10 days.

Following that, hearings are held to determine if the restraining order should be made permanent. Of the 40 cases taken to court, 39 employers obtained insurance and the remaining one went out of business when he lost his lease.

"Many people would consider this procedure to be harsh, but it is more expensive to pay benefits to an injured worker than it is to buy insurance," Sims said.

Sims said he also is exploring a program to deal with repeat offenders who continually ignore the law requiring workers' compensation insurance. He said they can be assessed 150 percent of the premium they would have paid if they'd bought the insurance originally and also can be charged with a Class B misdemeanor, which carries a $1,000 fine and/or six months in jail.