Federal workplace insurer Comcare has been rocked by the loss of one of its biggest customers as the ACT Government moves on Thursday to take its 20,000 public servants out of the troubled scheme.

The territory's government has lost patience with Comcare after being hit with a premium bill approaching $100 million and is exasperated at the pace of reform to a scheme that can allow public servants to sit at home for decades, in some cases, while being paid generous compensation benefits. – Canberra Times – 25 February 2015

The recent decision by the ACT Government (as reported above) to leave the Comcare scheme highlights concerns that have been voiced in a number of quarters about the operation of the Scheme.

The ACT Government’s decision is particularly topical, and likely to have far-reaching implications, in the context of the current consideration by the Senate of the Safety, Rehabilitation and Compensation Legislation Amendment Bill 2014 (the Bill).  The Bill, if passed, will allow any company operating in two or more states or territories the opportunity to apply to self-insure under  the Comcare scheme (as well as providing that the employees of any company joining the Comare scheme will be covered nationally by the Work Health and Safety Act 2011).

Critics of the reforms proposed in the Bill (including the Opposition and major unions) have stated that the Comcare scheme is poorly performed and therefore should not be used as a ‘benchmark’ and implemented as a national workers compensation regime (see for example the dissenting report on the Bill by the Education and Employment Legislation Committee, dated July 2014).

Despite the obvious efficiencies to be gained from operating under consistent national workers compensation and work health and safety arrangements, the proposed reforms have also been subject of scrutiny on the basis that entry to the Comcare scheme may not be as attractive as portrayed by the Government.   Particularly, critics of the reforms have highlighted the generous nature of the Scheme (the Scheme is currently more generous in both monetary amount and the period over which benefits are provided than state based schemes).  The Scheme has drawn the most criticism on this front on the basis of its ‘long tail’ features, which allow an injured employ to potentially claim compensation until his or her notional retirement age, rather than having compensation ‘capped’ to only be paid for a specified period (as in the case in the state and territory based schemes).  The fact that the resolution of disputed claims takes significantly longer under the Comcare scheme has also been pointed to as evidence of the unattractiveness of the Scheme. 

The exit of the ACT from Comcare will also undoubtedly be used as evidence by critics of the Scheme of the urgency of the need to implement the kind of significant and comprehensive reforms recommended by Peter Hanks QC in his report (delivered in 2013).