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In any democracy, free market principals should rule. When monopolies start taking form, there becomes a lack of ability for individuals to have choices. This is the case when employees are automatically docked pay so that they have workers’ compensation coverage, which is provided by WorkSafeBC – formerly called the Workers’ Compensation Board of British Columbia. Since 1917, this provincial government agency has provided workers with coverage in many cases if they are unable to work due to an injury on the job. The insurance also covers someone if they fall ill because of their place of employment. WorkSafeBC then completes an investigation and then it determines if the government-run insurance agency should cover the employee for any lost pay or hardship. The agency covers over 2.3 million workers, which makes up over 93 per cent of the labour force in the province. Approximately 200,000 registered employers are also covered under the insurance (WorksafeBC, 2012). Without a privatized workplace insurer, the rates that each member has to pay increases because of a lack of competition that would otherwise push the price down in a free market. Models in areas of the United States should be observed and one should be implemented in B.C. so that people have free will to decide where to find coverage. < Click Essay Writer to order your essay >
Public workers’ compensation is attractive to those who own businesses because it limits the number of lawsuit in which it has to settle. However, WorkSafeBC makes it mandatory for employers to be a part of the program, rather than them being able to either choose a different insurer or not buy insurance at all. The latter option would increase the amount of risk an employer takes on, as they could be liable for covering the cost of lawsuits if an employee becomes injured. WorkSafeBC is modelled around employees forfeiting their right to sue employers.
Among employers in Texas, who have the option about whether to find insurance, 68 per cent were happy not having insurance, while 60 per cent of those who had insurance were satisfied. In 2001, approximately 35 per cent chose not to subscribe to an insurer (Shields, 2001).
California has a state compensation fund that can help cover many of the lawsuits laid against employers who, in the Sunshine State, are liable for all costs associated with an injury. This state fund is similar to the WorkSafeBC model, but instead of both employee and employer paying into the insurance, it is just the employer (O’Brien).
Throughout the United States, workers compensation is mixed between private and public, depending on the state. Near the beginning of the 20th Century, many believed that forcing employers to enter into workers’ compensation, violated the U.S. Constitution because the benefits were designated to include coverage even to those employees who were at fault due to their own negligence. However, in 1917 in a U.S. Supreme Court case, it was determined that a case between New York Central Railway Co. and White, that the employer’s rights weren’t affected.
Governance of the U.S. workers compensation is different depending on which state is administering the insurance. The broad majority of states operate on a private insurance basis. Only 12 states use public insurance fund, while several are state-owned monopolies, which is consistent with WorlkSafeBC. The state funds are usually used as a last resort or to educate and mitigate risk – this helps prevent pushing private insurers out and taking away from free-market principles. However, private and public options exist in many states. Both are overseen by a state governing board. This helps ensure that the employers are reasonably educating and protecting their workforce, proving that a change away from a WorkSafeBC model, which strictly enforces and sets standards for employers, wouldn’t take away from any mandatory safety standards that are government enforced. [Need an essay writing service? Find help here.]
Most of the U.S. employers are now required to pay for the education and training that is provided through private or public insurers. Employers who don’t pay for coverage are subject to penalties. It should be reiterated, however, that employers in Texas are able to opt out of workers’ compensation. These employers can be subject to being sued by an employee that worker can prove employer negligence resulting in injury. The damages gained in these instances are usually much more comprehensive than what is earned in the Canadian and United States insurance coverage (Labor Code, 1993).
As the largest private workers compensation insurer in the United States, Liberty mutual has programs that help people get back to work quickly. The insurer also has its own Medical Service Center focusing on rehabilitation programs. United States companies charge at a case-by-case basis by analyzing each person’s medical history, age and other factors to determine a rate. So while some people will pay more for coverage, many others won’t have to pay for those who are unhealthy.
In B.C., while a person could claim that having workers’ compensation covered by a government improves the health and safety regulations, those same requirements could be imposed by the government on private organizations. This is the case for every business in B.C., which is audited if the company sparks the interest of the government’s safety regulators. The government’s role is to serve the interests of the people, but when it imposes itself as insurer, the government is limiting the options of the population.
The WorkSafeBC model could also limit a person’s need to consult a lawyer before being reimbursed, though this isn’t always the case. A government agency is subject to stricter scrutiny and would likely have less reason to attempt to rip people off. A corporation likely has a stronger grip on the money available for payouts. While a government agency has a budget, the money available for payouts is less likely to bottom out or be overly restricted.
Greater accountability to the public also facilitates eager political opposition critics to point to areas where the current government is lacking. This has included finger pointing at massive ICBC profits that went into the provincial government’s general revenue. For example, in March 2010 when ICBC reported an expected $778-million surplus over the following three years, the New Democrats accused the Liberals of using the funds to pad provincial coffers. However, the government argued the move would save tax dollars. “Why did the ministerchoose to tell motorists in British Columbia to take a hike, instead of allowing the board the option of giving them further rebates?” NDP House Leader Mike Farnworth said at the time (CBC, 2010).
While the aforementioned accountability argument appears to endorse publicly run insurance, it actually points out that despite being overcharged, residents have no option but to stay with their current insurance provider. WorkSafeBC digs even more aggressively into employees’ pockets by docking the money directly from each person’s pay, without giving them the option to opt out. With car insurance, people at least have the choice to start taking the bus, walking or riding a bike, for example – And many do, because of the outrageous prices they are charged due to a lack of competition.
If a person is not satisfied with their coverage in any public insurance model, they don’t have the option to go elsewhere. So while the opposition critics can slam the government as much as they want, there likely isn’t much that will be done by the government to change service delivery. It doesn’t take the voice of one upset customer, it takes a class-action suit to stir up any change in a public agency.
WorkSafeBC is a case of government inaction. And without a population that is pushing, little will be done. One could argue, however, that if there isn’t enough push to change WorkSafeBC then maybe the corporation is doing its job and satisfying the population – but the fact remains, people in a democracy need to have the option about which insurance company to choose.
After all, the B.C. government could increase rates whenever it pleases, regardless of how many opposition critics and residents are attempting to screen its actions. Take the monopoly vehicle insurance rates in Atlantic Canada as an example. Rates in 2002 jumped there by between 24 and 40 per cent in one year (Fogden, 2003). This was a reflection of mass insurance payouts and what was at the time a suffering economy. Of Canada’s 10 provinces, three have publicly run vehicle insurance corporations, six have private and Quebec offers both.
A study by the Consumers Association of Canada claims public car insurance is more affordable to the consumer than private insurance. However, the person making that claim, President Bruce Cran, compares the price between Saskatchewan and Alberta, saying the rate paid in Alberta, which has private insurance, is greater than that paid for in Saskatchewan, which is public. However, as Mark Milke points out in his article “Auto Insurance: Comparing Apples and Oranges,” which was printed in Frontier Centre for Public Policy, the payout for an average insurance claim in Saskatchewan is $4,135, compared to $11,895 in Alberta (Milke, 2012). [“Write my essay for me?” Get help here.]
Taking away from the free-market principals limits democracy not only for the general population, but for entrepreneurs as well: Those wanting to start a workers’ compensation insurance company are left hopeless because of the government domination of the sector. This is bordering on dictatorship and has been rampant for so long that it has become an accepted product of living in B.C. and Canada, take Employment Insurance as another example.
But just across the border exists a brighter insurance climate, one that allows competition among insurance providers. In the United States, workers aren’t automatically docked pay to cover their insurance. They instead have a choice whether to attain coverage. While this can put many people in difficult situations if they become injured, it does provide the opportunity to save or spend that extra bit of money each paycheque.
A model similar to that found in Texas appears the most appropriate form of workers’ compensation coverage, whereby an employer is responsible for paying for the insurance, which can be either private or public, and it is the employers’ option to even have insurance. The premiums for each employer would increase in B.C. because the burden for payment would be distributed to fewer insurance holders (the employers). This makes sense because the employer is providing the workplace and should take responsibility for the safety of the area. Despite any possible downloading of costs by decreasing pay, this would lower regulatory concerns of the government, decreasing costs to the taxpayer while leaving the employee with options of employers if costs are downloaded.
References List
Fogden. S. (2003, Aug. 21). The Increasing Cost of Insurance in Canada. Maple Leaf Web.
Government looting ICBC, says NDP (2010, March 4) CBC
Labor Code. (1993, Sept. 1). State of Texas.
Milke. M. (2012). Auto Insurance: Comparing Applies and Oranges. Frontier Centre for Public Policy.
O’Brien. D.W. (N.D.). Introduction to California Workers’ Compensation.
Shields. J. (2001). A Study of Nonsubscription to the Texas Workers’ Compensation System: 2001
Estimates.
WorkSafeBC History. (2012) WorkSafeBC.
