Well, this is embarrassing.

The state’s workers’ compensation board has fined the state workers’ compensation system more than $20,000 for reporting errors uncovered by an audit.

The fine on the state’s self-insured system for injured workers, noted in an annual status update to the Legislature on workers’ comp, was $20,850. That was the largest penalty of the 15 levied in 2014 on workers’ compensation insurers or self-insured companies.

The Workers’ Compensation Board, the state Department of Labor and the Bureau of Insurance annually audit workers’ comp insurers and companies that are self-insured to make sure they meet reporting requirements, make accurate and timely benefits payments and have effective claims-handling techniques, among other requirements.

Paul H. Sighinolfi, the executive director of the Workers’ Comp Board, said the fine levied on the state’s workers’ comp system shows his auditors don’t play favorites when monitoring the performance of workers’ comp programs.

“We show them no preferential treatment, as you can see,” he said.

And, Sighinolfi added, he’s a stickler – for instance, the law calls for valid workers’ comp claims to be paid in 10 days. Miss that deadline, even by a day, Sighinolfi said, and “they’re fined.”

Guarantee Insurance Co., which is based in Florida, had the second-highest fine at $20,000, and York Risk Services Group, based in New Jersey, was fined $19,300, but none of the fines on 12 other insurers exceeded $10,000.

Sighinolfi said his office has been working with the people who run the state’s system to rectify the errors and he said the state is doing better this year.

Calls to Anna Ryerson, the director of the state’s workers compensation system, were not returned.

Fines aside, Sighinolfi said the workers’ compensation is working well in the state, nearly a quarter of a century after it triggered a state shutdown. In 1991, only one insurer was still writing policies in the state because insurance companies had lost millions covering workers’ comp claims in the state. Worker injuries, payouts and the length of time it took for workers to get back on the job were all much higher than the national average. The governor at the time, Republican John R. McKernan, said he would veto the budget from the Legislature – controlled by Democrats – unless reforms were made.

McKernan vetoed the budget and the state was shut down for the beginning of July that year before a compromise was reached and reforms – some of which are still being debated – were adopted.

For all that strife, Sighinolfi said the system is stable. He said 42 percent of the companies in Maine run self-insured workers’ comp systems, about twice the national average, and more than 300 insurance companies are licensed to do business in the state, although many have just a handful of clients.

TAX SWINGS

One thing that isn’t stable is the state’s collections of individual income taxes.

In February, the state took in nearly $52 million more in individual income tax receipts than had been budgeted.

The budget called for collections of $6.7 million that month, but the amount that came in was $58.3 million, a whopping 820.2 percent increase.

At the time, state officials were scratching their heads, according to the monthly memo on revenue from Richard Rosen, the commissioner of the Department of Administrative and Financial Services.

Rosen said tax refunds were $49 million under budget, accounting for almost all of the variance. So the state was still taking in income tax payments, but refunds weren’t going out, at least at nowhere near the pace anticipated.

Rosen speculated that a slowdown in tax processing over fraud concerns may have been responsible and he said the March report would probably clear up the reason.

In March, Rosen said, the pace of refunds picked up, and revenue from income taxes was $15 million under budget – 25 percent lower than anticipated – but he said the reasons for the wide swings were still not clear.

“While some of the underage is from lower than anticipated requests for the property tax fairness credit, there appears to be a portion associated with stronger than forecasted income growth in tax year 2014,” he wrote.

But, Rosen added, it should become clear in time.

“As always, April receipts will provide more definitive information,” he wrote.

That report is expected in the next couple of weeks.

 


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