University wants to borrow to help workers comp program

Wednesday, Oct. 23, 1996 | 11:59 a.m.

The money would be repaid next August, when the university system expects $1.5 million in refunds from the State Industrial Insurance System.

Tom Anderes, the university system's vice chancellor for finance, is asking college presidents and university regents to take a serious look at the program's long-term problem of declining revenues. Adding fiscal stability now will offset future shortfalls and deficits, Anderes said.

Reserves have been depleted, Anderes said, because of increased claims and settlements, reduced refunds from the State Industrial Insurance System and the use of worker's compensation funds for radiation safety programs, an expensive requirement for university science labs.

"There is a problem when your reserves hit zero, and you're forced to borrow from the institutions," Anderes said of this year's $1.3 million shortfall. "But the issue is not one of permanence. If the institutions were not getting the money back and were facing a permanent loss, then we would have a significant problem."

Anderes said borrowing from individual schools is necessary this year because university system administrators are in the middle of restructuring their self-funded industrial insurance program in a way that emphasizes premium payments to cover claims throughout the year. In the past, claims have been paid as they came in.

In the coming years, Anderes said, the schools likely will be asked to pay higher worker's compensation rates to build up the system's reserves. One revenue source the university system is targeting is the estate tax.

Anderes said the schools, not their employees, would be forced to come up with ways to pay the higher rates.

"Fortunately, the problems are manageable, and there are actions which can put the program on solid footing," Anderes said.

The regents' Finance and Planning Committee and Committee on Estate Tax plan to discuss the issues Tuesday in Reno. The Board of Regents may take action on Nov. 15 at its meeting in Reno.