A recent article in the Bangor Daily News touted Maine Employers’ Mutual Insurance Company (MEMIC) announcement that it was paying policy holders a “record” dividend of 18 million dollars. This is based on the company’s performance in 2011 and is on top of a 16 million dollar dividend paid last year.
MEMIC is Maine’s largest workers’ compensation insurer.
The article attributed the cost savings to a high emphasis of safety.
No one is against safe work practices and there are no doubts that more focus on safety has helped reduce workers’ compensation insurance costs over the years. It is just unfortunate that it took rising insurance premiums to motivate employers to focus on worker safety.
But what the article fails to mention is that the State’s workers’ compensation insurers have also realized a substantial cost savings by cutting much needed benefits to injured workers. In 2011, while MEMIC’s performance was realizing a record 18 million dollar dividend to its policyholders, Governor LePage was pushing through a workers’ compensation “reform” that cut benefits even further.
The Workers’ Compensation Act is designed to protect those who are unfortunate enough to sustain injuries on the job. Many people in this state earn a living through physical labor. Too often these injuries take away a person’s ability to earn a decent living.
However, the Workers’ Compensation Act also protects employers. The Workers’ Compensation Act prevents employees from suing their own employers for their injuries. No matter how negligent the employer may be, an employee cannot sue their employer for their injuries. Instead, they can claim workers’ compensation benefits. Those benefits are much more limited than benefits that might be available in a lawsuit.
This is a trade-off that might have been reasonable when workers’ compensation benefits were first conceived 100+ years ago. But as workers’ compensation benefits have been reduced over the years this trade-off is looking less and less like a good deal. Perhaps instead of continuing to reward policyholders with record dividends, we should look again at supporting the workers in Maine who need some help.
About the author: Kevin Noonan is an attorney and partner at the workers’ rights law firm, McTeague Higbee. He can be reached at 725-5581 or email@example.com.