State Aims to Minimize Harm from Workers Comp Changes

The state is trying to limit collateral damage from a workers comp law scheduled to take effect at the end of the year. It forces sole proprietors, typically subcontractors, to carry workers comp insurance on themselves, not just their employees.

The legislature’s intent was to keep construction companies from ducking workers comp coverage by making their employees sole proprietors. But since passing the law in 2008, it’s become an increasingly tough time to raise expenses in the industry. That’s why David Thurman of Gallatin says he will shutdown his siding installation business when the insurance rules take effect.

“To pay the workers comp, you gotta have the work. Right now, we don’t have no work.”

Anecdotes like Thurman’s have pushed the legislature to consider changes, says John Morris, deputy commissioner of the Department of Commerce and Insurance.

“It appears the intent of the General Assembly at this point to enact some sort of suspension of the effective date.”

But the legislature won’t meet until after the law takes effect unless a special session is called, so the department is doing what it can to scale back implementation.

Instead of automatically sending the much larger bill to policy holders, sole proprietors must choose to be covered. Those policy holders who comply with the law can also break their premiums into monthly payments. State officials say both changes would make refunds easier if the workers comp law is delayed or changed.