Old Fund Nearly Debt-Free
Thursday, December 28, 2017 | 397 | 0 | 0 min read
The West Virginia Workers’ Compensation Old Fund, which had a debt of $3 billion in 2006, has reduced its debt to $29 million, Revenue Secretary Dave Hardy writes in the Charleston Gazette-Mail.
The Old Fund is the legacy claims liability that existed upon the privatization of workers’ compensation, which is run by third-party administrators Sedgwick CMS and HealthSmart.
West Virginia privatized its workers’ compensation system in 2006, when the Legislature created a quasi-private company, BrickStreet Mutual Insurance Co., and jump-started it with a $200 million loan. Thirty months later, in July 2008, the state opened up workers’ comp to a competitive market and now has more than 260 insurers.
“It was never easy but, since 2006, this is what we’ve contributed: $1.1 billion of severance tax; $881 million of personal income tax; and $122 million of greyhound and thoroughbred purse money,” Hardy wrote.
“Employers contributed $511 million in surcharges. And, there were other contributions, to the tune of $302 million, from varied sources such as tobacco settlement money. We also are seeing a steep and steady decline in Old Fund claims, which is also impressive,” he penned.