Laundry Owners Mutual Liability Insurance Association, Petitioner
Insurance Commissioner of the Commonwealth of Pennsylvania, Respondent
Argued March 10, 2014
Appealed from No. CL12-06-019. State Agency: Insurance Department.
Shawn C. Gooden, Harrisburg, for petitioner.
W. Christopher C. Doane, Department Counsel, Harrisburg, for Respondent.
Seth Cooley, Philadelphia, for intervenor Pennsylvania Compensation Rating Bureau.
BEFORE: HONORABLE RENÉ E COHN JUBELIRER, Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge. OPINION BY JUDGE COHN JUBELIRER. Judge Leadbetter did not participate in the decision in this case.
RENÉE COHN JUBELIRER, Judge
Laundry Owners Mutual Liability Insurance Association (Laundry Owners) petitions for review of the Order of the Insurance Commissioner of the Commonwealth of Pennsylvania (Commissioner) affirming, in part, the Final Determination of the Technical Director of Classifications and Field Operations (Director) of the Pennsylvania Compensation Rating Bureau (PCRB). The Commissioner ordered tat, under the workers' compensation insurance policies issued by Laundry Owners to Touch-Stone, Inc. (Touch-Stone), some of Touch-Stone's workers were to be assigned Code 941 (Social Rehabilitation Facility) for purposes of calculating Touch-Stone's premium, while others were to be assigned Code 951 (Salesperson -- Outside) and Code 953 (Clerical Office Employees) and, therefore, charged lower premiums. Before this Court, Laundry Owners argues that the Commissioner erred in classifying Touch-Stone's operations as separate enterprises rather than as a single enterprise and in classifying some of Touch-Stone's employees under Code 951. Discerning no error, we affirm.
Pursuant to Section 707 of the Workers' Compensation Act (Act), " every workers' compensation insurer is required to be a member of a rating organization and must adhere to the uniform classification system of the rating organization to which it belongs."
Grimaud v. Pennsylvania Insurance Department, 995 A.2d 391, 394-95 (Pa. Cmwlth. 2010). The PCRB is such a rating organization. Section 654 of the Insurance Company Law of 1921 (Law), requires the PCRB to file with the Commissioner for his modification, amendment, or approval, " a system of classifications of risks, underwriting rules, premium rates, and a schedule or merit rating plans for workers' compensation insurance in Pennsylvania." Grimaud, 995 A.2d at 394. The PCRB has promulgated, and the Commissioner has accepted, the Pennsylvania Workers' Compensation Manual of Rates, Classifications and Rating Values for Workers' Compensation and for Employers
Liability Insurance (Manual) as its uniform classification system. Id. at 395 & n.5. The purpose of the Manual's classification system " is to assign the one basic classification which best describes each distinct business enterprise of the insured." (Manual, Underwriting Rules, § 1(IV)(C)(1)(a).) However, where an employer operates discrete business enterprises that cannot be covered by a single classification, more than one classification may be assigned. (Manual, Underwriting Rules, § 1(IV)(C)(2)(b).)
Laundry Owners is an insurer that provides workers' compensation insurance; Touch-Stone is one of its insureds. Laundry Owners is a member of the PCRB. Laundry Owners wrote workers' compensation insurance policies for Touch-Stone for policy years commencing September 20, 2009 and September 20, 2010 (the Coverage Periods). Touch-Stone " is a not-for-profit human services agency providing services to families and individuals in northwestern Pennsylvania." (Adjudication, Findings of Fact (FOF) ¶ 17(a).) Touch-Stone provides both residential and non-residential programs, working with children and adults with mental retardation or mental health disabilities. Touch-Stone provides three programs: (1) Life Enrichment and Community Integration Services (LECIS); (2) Behavioral Health Rehabilitation Services (BHRS); and (3) Adult Autism Waiver Services (AAWS). (FOF ¶ ¶ 1-2, 4, 9, 17(a)-(b), 29.)
The LECIS program includes two residential programs and a day program. In one residential program, Lifesharing through Family Living, Touch-Stone does not provide any direct care; instead, clients are placed with foster families. In the other residential program, group homes are staffed around the clock by 17 Touch-Stone employees called Community Living Coaches. In the non-residential day program, called Home and Community Habilitation, Job Coaching and/or Companion, 20 employees, called Life Skills Coaches, provide one-on-one services to clients in the clients' communities during the day. Six Community Living Coaches from the residential program also work in the day program. The LECIS program also includes 4 office-based employees who have little client contact and a Program Coordinator who has almost no direct client contact. (FOF ¶ ¶ 35-41.)
The BHRS program " is a community[-]based service that emphasizes therapeutic interventions, behavioral modifications and mentoring for persons under 21 years of age." (FOF ¶ 31.) The BHRS staff comprises 16 individuals: 12 Therapeutic Support Staff, 3 Behavioral Specialist Consultants/Mobile Therapists (Mobile Therapists), and a Program Coordinator. The 12 Therapeutic Support Staff work almost exclusively one-on-one with clients in the client's school, home, and community. The Mobile Therapists split their time between the clients' locations and their offices. (FOF ¶ ¶ 32-34.)
The AAWS program is minimal compared to Touch-Stone's other two programs, providing job coaching for adults with autism. The same Program Coordinator oversees the AAWS and BHRS programs.
One of the BHRS program's Mobile Therapists also provides services to the AAWS program. (FOF ¶ ¶ 30, 32; Letter from Touch-Stone to Director ...