Vital N.C. workers’ compensation data becomes private [The News & Observer (Raleigh, N.C.)]

Oct. 28--Erik Arnold spent much of the past five years spying on people suspected of cheating insurance companies through false workers' compensation claims.

In March, after getting in a car crash on his way to an assignment for Baier Surveillance and Monitoring of Fuquay-Varina, he realized his boss was breaking the law, too -- by not carrying required workers' compensation insurance on the six or so workers he employed.

"We investigated workers' comp fraud, and we didn't have any (insurance)," said Arnold, 36. "Ironic is the only word I can use."

Arnold learned a stiff lesson: Even the employers you'd expect to follow the law sometimes don't. Now, Arnold said he's vigilant about asking new employers whether they have insurance.

But workers such as Arnold are now prevented from figuring out whether they'd be protected by insurance should they get hurt at work. This summer, the General Assembly agreed to make information from insurers about employers' coverage confidential.

The state requires that businesses with three or more employees be insured for workplace injuries. When the businesses don't buy coverage, workers are left with mounting medical bills and often end up relying on government support.

The News & Observer reported in April that as many as 30,000 North Carolina employers required to carry workers' compensation insurance don't, leaving their employees vulnerable if they are hurt at work. But much of the data the newspaper used to help make that calculation was soon made private under state law at the request of the N.C. Rate Bureau, an organization that works for the insurance industry.

State officials will meet Monday to discuss how to crack down on cheating businesses; access to insurance information is one of the problems they hope to address.

Gov. Bev Perdue convened a task force of state officials in August after an N&O series revealed that some businesses broke the law by treating employees as subcontractors and by cutting corners on taxes and insurance. The problems had persisted for years as some government regulators sat idle, failing to share information and flag problem employers.

Getting consumers and workers involved in reporting fraud will be critical, said Wayne Goodwin, chairman of the task force and state Insurance Commissioner.

"Anything that can help detect fraud and help equality needs to happen," he said.

Needing more info

As workplace injuries go, Arnold was lucky. His kneecap was shattered during the car accident, but surgery and eight weeks of recuperation have nearly returned him to full health. Still, his knee will never be what it was.

Martin Baier's firm specializes in workers' comp fraud investigations. He has testified at hearings before the N.C. Industrial Commission, reporting that workers have been lying about their injuries. In one case, he reported that a man faked debilitating back injuries; Baier had videotaped him riding a bike and tackling home improvement projects.

Baier said he didn't realize his business was large enough to need insurance.

"I'm a really good private detective but not the best businessman," Baier said. "The irony of this is not lost on me."

Baier said he tried to keep Arnold afloat while he recuperated. He paid him part of his wages during his missed work and agreed to settle the balance of the claim this month. The commission brought a civil fine against Baier and required him to purchase insurance, which Baier said he has secured for $5,000 a year.

Baier said he thinks the state should do more to educate small-business owners of their obligation. The commission has been hatching such education efforts this year.

Although the accident was minor compared with other workplace injuries, Baier said the settlement and bad publicity has dealt a setback to his firm.

"If I'd known, I would have had it," he said.

Arnold wishes he'd known about the lack of coverage before he got hurt.

"The things we do ...," Arnold said. "All these variables can be disastrous."

When he applied for jobs with other private investigation firms this summer, he asked each business whether it carried insurance. Arnold said he shouldn't have to take their word for it.

Sunshine in other states

Other states have embraced public access to employer insurance information.

In Florida, officials created a public database to search employers' insurance. An added feature: The database lists the number of employees a company insures. That tool, a Florida spokeswoman said, enables businesses to keep tabs on competitors who may employ a workforce far larger than what they may report to an insurer.

The website also allows consumers or general contractors in Florida to track subcontractors' insurance and solicit notifications if insurance changes or lapses.

In Oregon, medical providers urged the state to create a place to search for employers' insurance carriers. Clinics and hospitals wanted to know where to send their bills, said John Shilts, administrator for Oregon's Workers' Compensation Division.

"It's paid off for everyone," said Shilts. "Lo and behold, now and again, it leads to the discovery of someone who isn't in compliance. We take those tips gladly."

In both states, the insurance carriers feed information electronically each day to the state agency -- sometimes through an organization like North Carolina'sRate Bureau -- to power the database.

Protecting its members

The state Industrial Commission has long relied on the Rate Bureau to provide information about employers' insurance coverage, which is collected from private carriers. The commission used the information when investigating claims, and it also provided a public database on its website.

But the Rate Bureau took issue with the way the Industrial Commission shared the data. A private firm in Florida, DataLister, had requested the database of employers and their insurance from the commission to then sell to insurance companies looking for new clients. The Rate Bureau didn't appreciate its information being used to undercut its members, said Sue Taylor of the Rate Bureau.

"It's certainly an industry, but we don't want them getting the data from us," Taylor said.

Specifically, the Rate Bureau didn't want Social Security numbers of employers and information about the size of the businesses' payroll released to the public.

Those details were not included in data released by the Industrial Commission to DataLister, nor was it included in the database the Industrial Commission provided to The N&O earlier this year.

That data included the business name, address, insurance carrier, policy number and effective dates of the plan and was the basis for The N&O's report about uninsured employers. Information such as Social Security numbers or federal tax identifications had been removed by the commission.

Commission Chairwoman Pamela Young said she'd like to find a way to make the information publicly available again. Her agency has reached out to the Rate Bureau to figure out whether a compromise can be reached. It also wants to change its rules to allow for direct collection of insurance information from employers; the change is on hold as the Office of Administrative Hearings figures out the cost of the practice.

Taylor said the Rate Bureau is polling the private carriers it represents to see whether they object to sharing the information.

As legislators considered making the Rate Bureau data confidential this summer, lobbyists for media outlets tried to strike a deal to keep some of the information public; those efforts kept public some data, but less than was available before and not enough to perform meaningful analysis.

Harry Payne, former labor commissioner and a lobbyist for workers' rights at the N.C. Justice Center, said the public database must return.

"It's the only place workers can check on this without getting under a cloud with their employer," Payne said. "The only ones opposed, it seems, would be those with something to hide."

Locke: 919-829-8927

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