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Glendale, state must find funds for boosted support for firefighters with cancer

Bill would increase workers’ comp payouts

Posted 5/30/20

Arizona cities must brace for more workers’ compensation payouts if and when a bill passes in the state House of Representatives that ensures listed cancers contracted by firefighters must …

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Glendale, state must find funds for boosted support for firefighters with cancer

Bill would increase workers’ comp payouts

Posted

Arizona cities must brace for more workers’ compensation payouts if and when a bill passes in the state House of Representatives that ensures listed cancers contracted by firefighters must automatically be covered under cities’ workers’ comp policies.

A bill amending the state statute on workers’ comp has already passed the state senate and is expected to pass the house of representatives. Local city officials are asking the legislature to assist them in funding these payouts and insurance companies are fleeing the Arizona workers’ comp market.

“We’re trying to position ourselves as a city and as a Valley to accept what legislators may pass and how we fund it and how we keep the system whole. And that’s going to be a long discussion,” said Glendale Deputy City Manger Rick St. John.

After the statute on workers’ comp was amended in 2017, some legislators assumed any time a firefighter in Arizona was diagnosed with a form of cancer on the statute’s list of cancer’s presumed to be work-related for firefighters, it would automatically be covered by the city’s workers’ comp. Sen. Heather Carter, R-Cave Creek, said city’s were using a loophole to deny firefighters’ claims by saying the firefighter had to prove the carcinogens he or she was exposed to on the job caused his or her cancer.

A workers’ comp attorney working for Glendale says that’s how the law was meant to be interpreted. R. Todd Lundmark, outside counsel for the city of Glendale, said a 2011 court decision involving a Phoenix firefighter called Hahn vs. the Industrial Commission of Arizona set the precedent that firefighter’s must provide a link between the carcinogen they were exposed to and their form of cancer if they are to be awarded workers’ comp. He says judges agree the 2017 amendment to the law did nothing to change that precedent.

“We’ve had a lot of argument, in the media especially, that with the 2017 amendment, the Hahn decision was effectively overruled, and all the firefighter had to prove was he had been exposed to a carcinogen and he had one of the listed cancers,” Mr. Lundmark said. “And I can tell you based on the work done in my own office for some of the other agencies in town, the administrative law judges have agreed with us across the board: Hahn remains good law. The firefighter still has to prove a reasonable relationship between a particular carcinogen and his kind of cancer, which is the ongoing debate today.”

Glendale was in the middle of a workers’ comp debate last summer when a third-party administrator ruled Glendale’s workers’ comp did not have to cover the cancer of Firefighter Kevin Thompson, even though his type of cancer is listed in state law as presumed to be caused by firefighting activities.

After facing pressure from the public, state Sen. Paul Boyer, R-Phoenix — who represents part of Glendale — and fire unions across the state, city officials appealed to the Industrial Commission of Arizona, which informed them that the city can override the decision of the third-party administrator. Mayor Jerry Weiers said in a letter that until then the city had been following advice from city attorneys that the third-party administrator’s ruling was binding. After hearing otherwise from the ICA, Glendale reversed course and covered Mr. Thompson’s cancer treatments under its workers’ comp program.

Mr. Thompson still had his city-issued health and disability insurance to help him with his medical bills and lost wages due to illness before his workers’ comp claim was approved, and Glendale’s workers’ comp fund refunded the health and disability insurances as well as Mr. Thompson’s out-of-pocket costs once the claim was approved. The difference for firefighters or other city employees with a work-related illness or injury who must rely on health insurance rather than workers’ comp is they are subject to copays and premiums and lose their coverage once they leave their job with the city. Under workers’ comp, the employee doesn’t pay anything and remains covered even if the illness starts after leaving their city job.

Debates like the one around Mr. Thompson’s coverage would go extinct if the bill is approved. Mr. St. John, who oversees police and fire in the city, says it’s not an “if” but a “when.”

The bill’s passage will almost assuredly mean more workers’ comp claims must be paid out. The question would then become who is footing the bill.

“I don’t think any of us disagree with the heart behind the legislation. We just want our firefighters to be safe, and if they contract some type of disease or illness, we want them to be cared for. And regardless of where you sit on the issue, we all can agree with that. It’s now a funding issue, and how do we fund it?” Mr. St. John said.

Barrel District Councilman Bart Turner said he hopes the legislature will help cities by creating a state-wide solution to the problem and not leaving the city’s to pay for it all themselves, “just as they don’t like having unfunded mandates come down to them from Congress,” he said.

Many insurers are already backing away from the issue before the bill has passed. Glendale is self-insured for workers’ comp but has supplemental insurance to cover anything past a $1 million deductible for each case. Glendale Risk Manager Dianne Shoemake said she expects that deductible to jump to $2 million next fiscal year, which starts in July. That was the best deal — the only deal — that Glendale got, because the market for this insurance in Arizona is drying up. Ms. Shoemake said city staff reached out to eight companies and only one would even give them a quote.

The state bill isn’t the only thing causing the increase; COVID-19 is contributing to the jump in rates as well, Ms. Shoemake said.

“It’s going to get an even harder market and harder to find insurance because they’ll be paying out a lot of claims for this COVID disease. So, it’s going to be even more difficult in the future to obtain quotes at a reasonable level. It’s going to become more costly and our self-insured retentions are going to increase,” she said.

Mr. Turner noted a sustainable workers’ comp system is in the interest not only local governments but of the firefighters and other government employees that workers’ comp protects.

“We just need to have a way to do it for them, for their sake, that’s sustainable. You know, to design a system that will fail financially is not going to help them,” Mr. Turner said.

Glendale Mayor Jerry Weiers noted the ideal solution is to prevent work-related cancers in the first place.

“Obviously, the best thing we could ever do for our firefighters is to ever keep ‘em from getting cancer. Whole lot cheaper for everybody that way, too,” Mr. Weiers said.

Glendale is working on that as well. Mr. St. John said the city is working to provide firefighters with the best equipment to protect from carcinogens and to train firefighters to properly clean equipment and themselves that have likely been exposed to carcinogens to keep fire stations’ live quarters as clean as possible.

However, he said, there is always some risk of contracting work-related cancer on the job.

“I can tell you, you talk to a firefighter who’s fought a fire and days later they’re still smelling the smoke in their hair when they take a shower. So, it’s never going to be 100%. We can only do what we can do,” Mr. St. John said. “We’re learning more every day about how we can protect and keep our firefighters safe. And that’s really the model we want to live in. We never want to be satisfied with the level of decontamination that we have today. We’re always looking into the future about new equipment, new processes, new ways of doing business that keep our firefighters safe.”

Mark Carlisle can be reached at mcarlisle@newszap.com or found on Twitter @mwcarlisle.