Unemployment insurance rates spike in Alaska, Governor balks at current law

Governor Sean ParnellThe Alaskan Department of Labor has issued notifications to businesses throughout the state letting them know that they will be paying more for unemployment insurance next year. The new rates have yet to be reviewed by the state’s insurance regulators, but insurance companies claim that higher rates are necessary to ensure that the state’s unemployment trust fund remains solvent and that insurers themselves have to recover from high unemployment rates. Governor Sean Parnell argues that the rates are excessive, as the state’s trust fund holds more than $234 million and is considered financially solvent.

The new rates will cost Alaskan employers $68 million in 2012. Each industry will face its own set of rate increases depending on the benefits that must be leveraged in that field of business. Insurers were allowed to increase rates as part of an Alaskan law that grants them the ability to do so while the state’s trust fund remains solvent. Governor Parnell is now pressuring legislators to make changes to the law in an attempt to spare residents and businesses costly increases in their insurance coverage.

Some legislators have voiced their opposition to the rate increases while others have remained silent. The state Legislature does not reconvene again until the next legislative session, which is scheduled for January 2012. Governor Parnell believes that the issue will be a priority for lawmakers and hopes that it will be resolved quickly.

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