By the
AASCIF Standing Committee - Law
Significant challenges arise in insuring known groups of workers.
Those difficulties are multiplied when insuring unknown groups
of workers.
In North Dakota, volunteer firefighters are “employees” and
are, therefore, covered by Workforce Safety and Insurance, the
monopolistic provider of workers compensation insurance.
 Volunteer
firefighters and emergency response members pose serious underwriting
challenges. North Dakota is a large, mostly rural state. There
exist only four “paid” fire jurisdictions in the state,
each is a metropolitan district; the balance is comprised of volunteer
fire districts with every level of organization.
North Dakota has taken a unique position in charging for coverage
to this, largely undefined group. Defining that undefined population
of workers is not contemplated by the North Dakota solution. Instead,
premiums are assessed based on the population of the municipality
or fire district. “Such charge shall be a fixed sum for each
one hundred of the population of the municipality involved, the
same to be uniform as to all such municipalities but in proportion
to the population thereof.” NDCC §65-06-04. Theoretically,
as a population grows, so too does its demand for firefighting
services. As a result, we have a number, upon which the relative
risk may be assigned. It is not without flaws, but this system
has worked for North Dakota.
Once the charge is determined, the insurer is free to apply experience
rates to the district based on previous loss history.
In contrast, Louisiana, through litigation, has determined that
there is no mandatory coverage, since the volunteer does not meet
the employer-employee relationship.
For a claim to be compensable under the Louisiana Worker’s
Compensation Act there must first be an employer-employee relationship.
In determining whether such a relationship exists, courts have
focused on four primary factors. These are: 1) selection and
engagement; 2) payment of wages; 3) power of dismissal; and 4)
power of control. Because of the lack of payment of wages, volunteer
firemen in Louisiana are excluded from the Worker’s Compensation
Act.
In Genusa v. Pointe Coupee Volunteer Fire District No. 4, 644
So.2d 851 (La. App. 1st Cir. 1994), the fire chief of the volunteer
district brought a claim for worker’s compensation benefits.
The workers’ compensation insurer paid benefits for two years
and then terminated benefits on the basis that the claimant was
a volunteer. At trial, the evidence revealed that the claimant
received no wages or other remuneration of any kind. The court
cited the four factors listed above in its determination of whether
an employer-employee relationship existed. The court found that
none of the factors was the sole determinant of whether an employer-employee
relationship existed. As a general rule, though, a contract was
required in which services were provided in anticipation of being
paid. Since there were no wages paid to the claimant as he was
a volunteer, the court denied his claim for worker’s compensation
benefits.
After the Genusa decision, the Louisiana legislature enacted La.
R.S. 23:1036. It is in essence a modified worker’s compensation
system for volunteer firefighters. For it to be activated, the
state fire marshal must elect to provide worker’s compensation
coverage to the volunteer fire company members. If that occurs,
the statute provides medical benefits and limited indemnity benefits
at the minimum rate set forth in R.S. 23:1202.
To date, the state fire marshal has not elected to provide worker’s
compensation benefits to the volunteer fire districts. The fire
districts do have a “medical payments” policy which
will pay a limited amount for medical benefits to an injured volunteer
fireman. However, volunteer firemen remain excluded from the Louisiana
Worker’s Compensation Act. As a result, there is no established
scheme for underwriting the risk.
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