Out On The Fringe Of Workers’ Compensation
By Robert Warne - February 18, 2004The Department of Insurance is going after another Indian tribe offering a sovereign solution to the state’s workers’ compensation dilemma. The latest group feeling the heat is the Fort Independence tribe, who along with the Blue Lake Rancheria Indians and a staffing company owned by some Nebraska Indian tribes have struck a controversial nerve for state regulators.
These three groups are accused of setting up staffing companies on their reservations and offering their services to companies subject to state laws.
Independent Staffing Solutions is the Fort Independence tribe’s company, and according to the Los Angeles Times has 125 clients and 3000 to 4000 employees working predominantly in construction related trades leased throughout the state.
Skirting the issue of workers’ compensation, the coverage the tribes have been offering is referred to as "occupational indemnity, medical benefits through a tribal staffing model."
The protection of the California Insurance Guarantee Association in cases where carriers are unable to pay claims and the dispute resolution process of the Workers’ Compensation Appeals Board is not available to those on the tribal plan.
But such protections most likely doesn’t carry much weight if an employer can save up to 50 percent on workers’ compensation costs.
The Department of Industrial Relations has been successful in canceling a portion of the business generated by the tribes, but there’s no way for regulators to be content with whatever progress that has been made until the sovereign loophole is completely shut down.
It they fail to keep a lid on tribal coverage, instead of new carriers coming to the state, there will be more tribes, encouraged by the prospect of exploiting California’s work comp predicament. | 
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