Does Your Employer Really Have North Carolina Workers’ Compensation Insurance… Or Is It A “Ghost Policy”?
The Charlotte News & Observer reports that the Joint Senate-House panel on North Carolina Workers’ Compensation Insurance and Fraud Prevention is currently hard at work trying to figure out how to deal with the problems of “ghost policies.”
This is a peculiar type of insurance coverage that employers take out to protect “future” workers. Coverage may not apply to current people, like you or your coworkers!
Ghost policies create a special kind of challenge for the workers’ comp system. Employers can cite the fact that they own this coverage to show ostensible compliance with guidelines … without providing you any real protection.
The trouble is that regulators have an incredibly hard time identifying and thwarting companies that intentionally misclassify workers to get out of tax obligations and thus reduce their North Carolina workers’ comp insurance costs.
The News & Observer piece suggested that ghost policies have largely been confined to the construction industry. But this quirky, disturbing practice may be spreading to other industries. Lawmakers are debating vigorously over what to do about general contractors, who need to provide insurance protection for all site workers, but who also utilize subcontractors who may use this “ghost policy escape hatch” to create confusion.
The News & Observer quoted a VP for the Independent Insurance Agents of North Carolina, who said that “the potential for misunderstanding … is just tremendously increasing with those ghost policies.” A representative for the state’s Homebuilders Association told lawmakers that the problem has to do with system abuse as opposed to some fundamental flaw in the law.
The number and diversity of solutions proposed for the ghost policy model is, frankly, hard to track. Some people have suggested developing an NC unemployment fund to cover workers who fall through the cracks. Others want fundamental changes to the law.
What should you do, if you’re struggling with your North Carolina workers’ compensation benefits?
The team here at the Law Offices of Michael A. DeMayo is well equipped, experienced, and battle proven. Get in touch with us today to discuss what you can do, starting right now, to gain clarity on your objectives and the most appropriate tactics to take. Don’t allow the larger debates over the law – and over questions like what to do about ghost policies – deter you from making tangible progress and thinking effectively about your challenges and possible solutions.
