Casino workers’ comp premiums cut 29%

Tuesday, Feb. 10, 1998 | 10:36 a.m.

CARSON CITY -- A State Industrial Insurance System plan to reduce premiums an average of 22 percent to nearly 47,000 businesses was approved by state Insurance Commissioner Alice A. Molasky-Arman.

Rates will change April 1, with some businesses receiving reductions of varying amounts and others seeing premiums unchanged. No rates will increase.

The $115 million in lower premiums for the coming year is the largest reduction in rates ever by SIIS, which was called insolvent in 1992. But it has since rebounded, posting profits in the last four years.

Molasky-Arman said her review of the plan shows the reduction "is warranted" and is not excessive. SIIS provides medical and rehabilitation coverage for about 450,000 employees in Nevada.

The lower rates sparked complaints from the Progressive Leadership Alliance of Nevada, composed of organizations representing labor, Hispanics, women, the poor and other social groups. It said the casino, construction and mining industry were getting big paybacks for contributions to the political campaigns of state legislators.

Douglas Dirks, general manager of SIIS, denied that. The construction industry, he said is receiving a 20.6 percent reduction and the mining industry will enjoy a 16.2 percent decrease in premiums. Both of these are lower than the average 22 percent.

But the service-amusement industry, which includes casinos, will receive a 29.2 percent premium reduction.

The alliance said the Legislature took away benefits from injured workers, enabling industry to enjoy lower premiums.

Molasky said businesses such as restaurants and nursing homes will get 10 percent reductions. Rates will remain the same for power utilities, dental and clinical laboratories and county governments.

There will be an average 29 percent reduction for the clerical industry; 25.9 percent for manufacturing; 25.4 percent for agriculture and 21.5 percent for retail-wholesale.

In 1992, SIIS faced a $2.2 billion unfunded liability on its long-term obligations to workers injured on the job. This has been reduced to $850 million and Dirks says the system has the assets to cover this debt.

The 1993 and 1995 legislatures made massive changes in the system, curtailing benefits for workers hurt on the job, requiring that managed care organizations be hired to handle employees cases and tightening up on fraud in the system.