Industrial Commission of Arizona (ICA) and Planned Levy for Additional One-Half Percent Assessment: Upcoming Public Hearing in May 2019

On May 23^rd, 2019, the ICA will be holding a public hearing in the Commissioner’s Conference Room, 3^rd floor, at 800 West Washington Street in Phoenix, Arizona. This hearing concerns the Special Fund and a notice given of total annual reserved liabilities now exceeding $6 million, according to a public posting on the ICA’s website here. The statement for stakeholders is found here.

Why Is This Happening?

This notice is given, as per the Arizona Revised Statute (A.R.S.) § 23-1065(F), whenever an actuarial study and results report determines that the fund has a need for such a levy. This is an open records meeting, allowing all concerned persons to submit any written or oral comments to the Commission, up until the closure of the hearing on May 23^rd, 2019.

Who Does This Affect?

• Insurers and Employers

This mainly concerns insurance carriers, employers, and self-insured employers who could be negatively impacted by such a levy, to respond before the 60^th day (June 21) after the posting is made, by filing a complaint against the levy and its validity in the superior court of Maricopa County. When the case is reviewed, and a determination is made by the judicial court, this will either finalize the Commission’s planned levy or deny it.

The levy would be the one-half percent of all premiums received by private insurers, with the payment made to the ICA, which directs the payment into the state treasury and Special Fund.

• Employees

Employees are not directly affected by this levy if their case determination is validated because of an injury, either temporary or permanent, while on the job.

It is important to note that this revised statute also concerns those employees, who had impairment on the job, and moved on to another employer, then incurred a subsequent injury or impairment. That second employer is responsible for the subsequent work-related injury.

• Physical Impairments Not Related to the Workplace

Many employees have pre-existing impairments which are not related to any workplace jobs and manage their impairments well enough to continue working. From time to time, incidents can occur when employees must be out, due to complications concerning their impairments. Such events are covered by temporary disability compensation payments.

In this instance, the employer or insurance carrier would pay the compensation claims and then submit a claim to the Special Fund for reimbursement of those fees back to the employer or insurance carrier, as per A.R.S. §§ 23-961(D). See A.R.S. §§ 23-961(C) for a sample list of non-work-related impairments on this same web page. Such insurer or employer-based claims for reimbursement must be made by the end of each year when the event occurred.

Arizona’s ICA Special Fund

Go to the Arizona Special Fund Division website here to find out more about what the fund does to help employees. Injured workers and those with non-work-related impairments who filed claims with a now-insolvent insurer or bankrupt self-insured employers, can turn to the Special Fund for financial help. The Special Fund, in turn, goes after those insurers and employers, who by law, are required to compensate employees. Once the employees are paid, the insurers and employers involved are liable to the state to pay the bill or face never opening their businesses again. This is the importance of keeping the Special Fund solvent.

If you were working for a now-defunct employer or an employer who has no insurance coverage, call us at once for a consultation. 602-346-9009.