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Pomos receive $220,000 workers’ comp refund

DRY CREEK RANCHERIA GIVES SAVINGS TO WORKERS FACING RISING HEALTH PREMIUMS

SONOMA COUNTY – The Dry Creek Rancheria Band of Pomo Indians received $220,831 in dividends from its workers’ compensation carrier and will use the money to offset health insurance premium hikes for employees with dependents.

The company received the check reflecting favorable claims experience last month just in time to balance health insurance changes that would have increased monthly premiums for a large portion of employees.

Anthem Blue Cross of California told the group earlier this year that rates would increase for dependents beginning April 1. When Pomo officials found out about the workers’ compensation dividend in March, they agreed to use the return to ensure that employees would not be forced to drop coverage. The returns were based on the group’s 2005-2006 claims and are calculated from the difference between the company’s loss experience and paid premiums.

Dry Creek Rancheria, which operates River Rock Casino near Geyserville, is one of Sonoma County’s largest employers with 826 on staff. Employees in the construction sector or without dependents were not included in the reimbursement funding. “The tribe instituted aggressive safety policies from the beginning and were able to control the number of claims and pass those benefits on to the employee,” said spokesman Dave Hyams.

Insurance broker Fred Lopez of James G. Parker Insurance Associates of Fresno said the Rancheria’s performance was considerably better than the industry average, though companies do not usually receive dividends.

The Rancheria is one of the few companies outside of those in self-insurance groups that are enrolled in dividend-yielding plans since legislative reform in 2004.

“In the standard market when they had dividend plans, the dividend was factored into the premium based on their past loss experiences. But it also put the employer at risk if they exceeded those premiums, meaning if they had a worse experience, they might have had to pay more to the carrier at the end of the cycle,” said ABD Insurance Services Vice President of Commercial Lines Kent Keeney. ABD is owned by Wells Fargo.

The Rancheria receives coverage through Hudson Insurance Co., which only provides workers’ compensation to Native American groups. “I don’t know of any carriers offering dividend plans since the workers’ comp reforms,” said Michael Miller, assistant vice president workers’ compensation manager for Hilb Rogal & Hobbs Insurance Services of California.

“Years ago, many private carriers offered dividend plans and had additional revenue to give back to policyholders, but since the cost of workers’ comp has gotten so cheap, carriers are less likely to offer those plans.”

The State Compensation Insurance Fund of California, a quasi-public nonprofit agency developed by the state, functions on a dividend basis. But the fund has not been able to return a dividend in at least three years.

Rates in the workers’ comp industry as a whole have dropped about 65 percent since 2004 as a result of reducing the cost of claims.