Municipalities across the state are facing a common dilemma that's been surfacing since adoption of a law to help firefighters diagnosed with cancer.
The law, known as the Firefighter Cancer Presumption Act, requires workers' compensation coverage for firefighters who develop cancer caused by exposure to carcinogens at a fire or hazardous-materials scene.
While the law received nearly unanimous support when it was passed in 2011, the requirement is now raising questions for municipal leaders confronting much higher premiums or insurance cancellation notices.
Mirror file photo by Gary M. Baranec
Altoona firefighters battle a blaze at 103 East Maple Ave. in the Fairview Hills area. Municipalities across the state are facing a dilemma over a law requiring workers’ compensation coverage for firefighters who develop cancer from exposure to carcinogens.
The law allows firefighters with at least four years' experience and who were exposed to carcinogens on the job to make workers' compensation claims for up to 11.5 years after retirement.
During the first 300 weeks - roughly 5.7 years - after retirement, workers' compensation benefits are awarded for claims unless a municipality can prove the cancer was not related to the firefighters' duties. After that period and up to 11.5 years, the retirees must prove the cancer is linked to firefighting to receive benefits.
Insurance providers have no experience ratings on this type of coverage, so some of them are saying that the risk is too great and they're getting out of the business, Elam Hamm, assistant director of the Pennsylvania State Association of Township Supervisors, said last week. Others are raising rates substantially.
Municipalities are required to provide the coverage, Hamm said, so their options are to pay the higher premium or participate in the State Workers Insurance Fund, which also carries a hefty price.
"[SWIF] is the most expensive level of workers' compensation coverage that there is," Logan Township Manager Tim Brown said. "When nobody else will cover you, that's where you go for coverage."
Logan Township's workers' compensation coverage won't be up for renewal until July, and Brown said he's not sure what to expect.
"Maybe that's when our coverage would be dropped," Brown said.
The law also is causing concerns for municipalities with paid firefighters, too.
"I don't know that there have been problems so far," said Altoona City Manager Joe Weakland. "But we expect to have them."
"The claims are awful difficult to counter," Weakland said.
Municipalities with career departments can expect increases of about 40 percent, according to Bob Anspach, director of insurance services for PennPRIME, a risk pool that is part of the Pennsylvania Municipal League, who testified last fall before members of the state House of Representatives.
Insurers like PennPRIME have worked with underwriters and actuaries to calculate rates, but they don't have case law or claims' experience to get a good handle on what kind of payouts to expect, Anspach said.
Part of the problem is the law instantaneously created a new class of "incurred but not reported" claims dating back to 2000, Anspach said.
Before the law passed, insurers were informed that "claims would be few and that the claims would be cancers specifically linked to firefighters," Anspach said in his House testimony.
"This has been disproven by an explosion of claims starting in the City of Philadelphia, which went from zero cancer claims prior to the enactment of Act 46 to 38 claims - 24 of which are prostate cancer claims," he stated.
The law creates an impossible situation for insurers, especially for something like prostate cancer, which afflicts 16 percent of men, according to Anspach.
Firefighters with prostate cancer can file a claim, and the presumption that it came from their service would be difficult to rebut, he said.
Adding to the problem, law firms have been recruiting plaintiffs, he said.
One Philadelphia claim might be worth more than $2 million, he said.
The insurance community's dropping of volunteer coverage and the alarms it has raised about the law have "shocked" state Rep. Frank Farry, the law's prime sponsor.
The insurers worked with lawmakers to create the law.
He's willing to "try and find a solution," Farry said.
"By no means do we want to financially devastate municipalities," he said.
But he wonders about the "credibility" of the insurance trusts in any further discussions, he said.
Some observers think that in five years, the hubbub will turn out to be "much ado about nothing," he said.
None of the other 30-plus states with similar laws has had such a reaction from the insurance industry, he said.
The insurers don't seem to realize that some of the arguments they're making against the law - like prostate cancer being common among men whether they're firefighters or not - provide those insurers with ammunition to rebut claims, Farry said.
Bryson Peterman, president of the city's Pennsylvania Professional Fire Fighters union local, likewise stated in an email, "We're confused, because we met with them [insurance companies] prior and adjusted the bill to accommodate their wishes."
So far, lawmakers "see through" the claims of the insurance trusts and "are standing their ground," Peterman stated.
"I guess it's OK to let firefighters in Pennsylvania to provide protection without being protected," he said.