Deposit For Workers Is Ordered Ruling Requires Insurance Fund To Cover Compensation Benefits

The Idaho Supreme Court on Friday ordered the State Insurance Fund to make a $25 million deposit with the state treasurer to cover the unpaid workers’ compensation benefits it owes.

In ruling unanimously for State Treasurer Lydia Justice Edwards, the high court held that the fund was no different than any other workers’ compensation insurer and must comply with the deposit requirement.

The fund had argued that another state law specifically directs that all its surplus and reserve money be invested by the Endowment Fund Investment Board and therefore a deposit with Edwards was unnecessary. Officials pointed out that the law requires $150 million to be handled by that board - six times the deposit required by the treasurer.

But Justice Cathy Silak, writing for the court, said the fund’s surpluses and reserves do not include the money it knows must be paid in the future for authorized claim awards.

“It is the treasurer to make any and all payments,” Silak wrote. “In view of this requirement, we believe that the Legislature intended for the treasurer to be the keeper of the monies from which the outstanding and unpaid workers’ compensation benefits awards are to be paid.”

The fund provides workers’ compensation coverage for three-quarters of Idaho’s employers and over half of its work force.

Edwards, who is not seeking a fourth term next year, asked the high court last fall to issue the order after two written requests to the Industrial Commission, which oversees the workers’ compensation system, were essentially ignored.

“There is sound public policy behind requiring the deposit to be placed out of reach of the State Insurance Fund and in the hands of a disinterested trustee who will ensure the proper protection and application” of the cash, the treasurer told the high court in asking for its order.

She was roundly criticized by a number of state lawmakers for pressing the case, which Rupert Republican Dean Cameron, the vice chairman of the Senate Finance Committee, called “a shame and a waste of taxpayer dollars.”

But GOP Sen. Stan Hawkins, predicting Edwards would ask the budget panel for money to cover her legal costs in the case, found no support for legislation forcing the treasurer to drop the case.