Montana’s state-mandated workers’ compensation insurance fund announced Tuesday that it is returning a record $40 million in dividends to most of the businesses and organizations it insures.
The state legislature in 1989 created the Montana State Fund, a workers’ compensation insurance fund that guarantees a coverage option for any business or organization in the state with two or more employees. The State Fund is the largest such insurance provider in the state, with more than 26,000 businesses and organizations as customers.
The dividends paid out to roughly 95 percent of its customers are the result of improved workplace safety and investment income, said Laurence Hubbard, the State Fund’s president and CEO.
The quasi-public nonprofit is overseen by a governor-appointed board that operates its $1.6 billion in assets like a domestic insurance company, he said. While the State Fund paid out about $165 million in workers’ compensation claims last year, he said, it maintains a reserve fund of about $900 million.
“Our liabilities last sometimes for decades,” Hubbard explained. “If someone got hurt tomorrow, we might be paying on that claim for 30 or 40 years.”
In each year since the State Fund began operating in 1990, Hubbard said it has been able to distribute dividends — although some years those have been as low as $2 million. To announce the dividends, Hubbard is providing checks to five businesses across the state that have “demonstrated excellence in workplace safety.”
In Billings, the Yellowstone Boys and Girls Ranch received a check for $112,477 on Tuesday — around 25 percent of its annual premium, Hubbard said.
“What we try to do is find a way to incentivize employers in a financial manner … to continue to invest in workplace safety,” he said.
Montana regularly ranks near the top of nationwide lists for rates of workplace deaths and injuries. In its last annual report, the U.S. Department of Labor ranked Montana third for its per-capita number of workplace fatalities in 2015, which was more than twice the national average.
For workplace injuries, Montana ranked fourth among the 41 states for which those statistics were available in 2015. The state’s rate of 4.3 workplace injuries per 100 full-time workers was 43 percent higher than the national average.
Hubbard said it’s not entirely clear why Montana consistently ranks poorly for workplace safety, but said part of the reason likely owes to the culture of its workers.
“They think first about getting the job done and they think secondarily about safety programs,” he said. “They have to reverse that.”
Montana’s rates of workplace injuries and fatalities have been improving in recent years, Hubbard added, but so have those of other states.
“The good news is we’re making progress. The bad news is so is everyone else; so, comparatively, we’re still high,” he said.