With the cost of workers compensation claims increasing, so is Sherburne County’s insurance premiums.

 

At the Aug. 1 county board meeting,  Jane Hennagir, account executive with the MN Counties Intergovernmental Trust (MCIT), gave the county board an update on the previous year’s claims and dividends.

 

MCIT, a joint powers entity, started in the late 1970s when counties found it difficult to get workers compensation coverage. IT added property and liability coverage in the 1980s and later expanded to include loss prevention.

“Workers compensation is the only coverage that is experience-rated,” she told members of the board. “Counties that have more claims pay more for coverage than counties that don’t.”

 

Hennagir said for each dollar of premium MCIT collects, the actuary expects to pay out a certain amount in losses. Counties that come in under the expected amount get a cost savings. Those that go above, pay more than the anticipated base cost.

 

A few years ago, Sherburne County had lower claims than expected and saved $39,744 in 2012, $43,440 in 2013 and $22,994 in 2014.

 

But the cost of claims has increased since then. The county paid $65,765 over the base in 2015, and the cost has continued to increase.

 

Hennagir said it’s not always the number of claims that equates to higher costs. Some types of claims are typically higher, like law enforcement.

 

“We’re seeing an uptick in jail-related claims,” she said.

 

Law enforcement has the highest frequency of reported claims of county departments. It was also the loss leader relative to cost. The second most expensive type of claim involved training injuries, and most are in law enforcement.

 

As far as non-workers compensation claims, the most frequent are auto claims, which includes both physical damage and liability claims.

 

“If you’re going to be involved in a claim, 55% of the time it’s going to be in an auto,” said Hennagir.

 

Other types of claims were less likely: general liability 16%; property 13% and public employee liability 11%.

 

But the highest costs occurred with law enforcement liability and public employee liability, which includes wrongful termination, discrimination, harassment, excessive force, inmate deaths and suicides and land use decisions. 

 

“Those tend to go to federal court and so those are hands down the most expensive claims we see,” said Hennagir. “It’s less likely you’ll be involved in a public liability type claim. But if you are, it’s going to be more expensive.”

 

Hennagir said the most visible benefits are dividends, of which MCIT distributed $12.213 million in 2016. 

 

Sherburne County’s share was $290,574. That number is higher than in 2014 and 2015. But Hennagir said because of lower investment totals, dividends will likely be lower next year. She estimated a total near $10 million statewide.

 

“We can only invest in the same things the county can invest in. That means low-risk investments,” she said. “But if you were with a standard stock insurance company, those dollars would be returned to stockholders, not taxpayers.”

 

She said the best way for the county to save money on claims was to continue to manage their risk factors through programs MCIT offers -  defensive driver training, peace officer accredited training, resilience training and the employee assistance program (EAP) which provides professional counselors for support and advice on personal issues.

 

She said one addition will help - the hiring of a loss control representative who has a very strong law enforcement background.

 

“His focus will be on reducing those use-of-force and training types of claims,” she said.