SENATE LEADER CRITICIZES CARNAHAN FOR NOT APPOINTING BOARD

JEFFERSON CITY -- Senate Minority Leader Franc Flotron has charged that the failure of Gov. Mel Carnahan to appoint members to a workers' compensation appeals board is costing businesses in Missouri hundreds of thousands of dollars and jeopardizing jobs.

"Every inmate in Missouri prisons has a better chance for an appeal than a taxpaying business in our state," the Creve Coeur Republican said. "It is not simply wrong; it is unconscionable."

Flotron was referring to the Determinations Review Board, a five- member group created by the General Assembly in 1992 through HB-975, a workers' compensation reform bill.

The review board was designed to give Missouri employers a place to appeal changes in classifications by the National Council on Compensation Insurance, an insurance industry trade group that sets workers' compensation rates in Missouri and more than 30 other states.

Flotron contended that since Carnahan has not appointed anyone to the board, dozens of companies that have classification complaints have no forum to voice their appeals.

Some errors in workers' compensation assessments can run tens of thousands of dollars per company, Flotron said. "Many businesses in my district have complained, and one of the state's leading workers' compensation experts has documented hundreds of thousands of dollars in disputed premiums that cannot be resolved," said Flotron.

The senator said he has urged the Carnahan administration to fill the board, and has repeatedly offered suggestions on qualifications.

Marc Farinella, chief of staff to the governor, said that staff members who work on appointments are trying to fill the positions.

"We do intend to appoint the board," said Farinella. "I am not aware of the timeframe, but I do know work is going on currently to identify potential members and to make appointments."

Rep. Dennis Ziegenhorn, D-Sikeston, chairman of the House Insurance Committee, said he will meet this week with Jay Angoff, director of the Missouri Department of Insurance, and filling the board will be one of his topics. "I will encourage him to work with the governor to appoint the board," said Ziegenhorn.

Ziegenhorn said Angoff needs to be involved in the process, but he has been tied up with other matters such as formation of a mutual insurance company for workers' compensation created in SB-251, a workers' compensation reform bill passed last session.

Ziegenhorn said a variety of insurance-related issues are taking the director's time.

Flotron said there is no reason for the delay and that Missouri businesses wanting to appeal the national council's determination have nowhere to go.

"The exponential rise in workers' comp costs have many of our businesses teetering on the brink of closure," said Flotron. "What can the governor tell a business that believes it is being mistreated in its rates? He doesn't care enough about business and jobs in Missouri to appoint a board to hear their cases."

Over the past three years workers' compensation rates in Missouri have risen nearly 80 percent for many businesses.

One of the companies in the state with nowhere to appeal is Magnetic Collectibles in Cape Girardeau. Roger Mainor, owner of the company, recently learned that national council has reclassified his company, which produces flexible magnets, from a rubber manufacturer to a plastics manufacturer. The end result is that his premiums will climb $35,000 a year.

Mainor said he was frustrated to learn that the appeal board has been in existence for two years but has no members. Mainor said the higher premium will force him to cut back expansion plans and to consider re-locating all or part of his operation to another state.

According to the statutes, the Determinations Review Board must have five members: three representing employers, with at least one union and one non-union employer; one from the insurance industry; and one representing independent insurance agents.

Appointments by the governor must be confirmed by the Missouri Senate.

Flotron, who sits on the Gubernatorial Appointments Committee that screens appointees and makes recommendations to the full Senate, said every day that no appointments are received is "lost dollars, lost business and lost jobs."