CHARLESTON, W.Va. — West Virginia is “on a glide path” to paying off its old workers’ compensation debt, according to state Revenue Secretary Dave Hardy.
“This workers’ comp debt originally was supposed to take 30 years to pay off and we’re on target to have it done within the next two years — tops,” Hardy reported on Friday’s MetroNews “Talkline.”
On Jan. 1, 2006 when the privatization of workers’ compensation insurance in West Virginia first launched, Hardy said the unfunded liability, the old liability, totaled more than $3 billion.
As of June 30 of this year, Hardy said that total debt had been reduced to $29 million.
“That’s a monumental achievement as far as I’m concerned,” he told Hoppy Kercheval.
Money to pay down the debt has come from several sources including $1.1 billion in extra severance payments, $881 million from diverted personal income tax collections and $122 million out of greyhound purse funds.
A surcharge of nine percent on workers’ comp premiums, which is still in place, has also been key, Hardy said.
He noted that, even with the surcharge, overall workers’ compensation premium costs have decreased by 70 percent since 2006.
In 2010, Hardy said, more than 10,000 workers’ comp protests were filed. This year, that number is at 2,700.
“The workers’ comp system, by all accounts, operates very efficiently now,” Hardy said.
“It’s a great success story and sometimes we don’t talk about our successes here in our state government and this is one everybody’s happy about.”
Currently, there are more than 200 carriers writing workers’ compensation policies in West Virginia, according to information from the West Virginia Offices of the Insurance Commissioner.