SB 40: "An Act relating to workers' compensation; repealing the second injury fund upon satisfaction of claims; relating to service fees and civil penalties for the workers' safety programs and the workers' compensation program; relating to the liability of specified officers and members of specified business entities for payment of workers' compensation benefits and civil penalties; relating to civil penalties for underinsuring or failing to insure or provide security for workers' compensation liability; relating to preauthorization and timely payment for medical treatment and services provided to injured employees; relating to incorporation of reference materials in workers' compensation regulations; relating to proceedings before the Workers' Compensation Board; providing for methods of payment for workers' compensation benefits; relating to the workers' compensation benefits guaranty fund authority to claim a lien; excluding independent contractors from workers' compensation coverage; establishing the circumstances under which certain nonemployee executive corporate officers and members of limited liability companies may obtain workers' compensation coverage; relating to the duties of injured employees to report income or work; relating to misclassification of employees and deceptive leasing; defining 'employee'; relating to the Workers' Compensation Board's approval of attorney fees in a settlement agreement; and providing for an effective date."
00 SENATE BILL NO. 40 01 "An Act relating to workers' compensation; repealing the second injury fund upon 02 satisfaction of claims; relating to service fees and civil penalties for the workers' safety 03 programs and the workers' compensation program; relating to the liability of specified 04 officers and members of specified business entities for payment of workers' 05 compensation benefits and civil penalties; relating to civil penalties for underinsuring or 06 failing to insure or provide security for workers' compensation liability; relating to 07 preauthorization and timely payment for medical treatment and services provided to 08 injured employees; relating to incorporation of reference materials in workers' 09 compensation regulations; relating to proceedings before the Workers' Compensation 10 Board; providing for methods of payment for workers' compensation benefits; relating 11 to the workers' compensation benefits guaranty fund authority to claim a lien; excluding 12 independent contractors from workers' compensation coverage; establishing the
01 circumstances under which certain nonemployee executive corporate officers and 02 members of limited liability companies may obtain workers' compensation coverage; 03 relating to the duties of injured employees to report income or work; relating to 04 misclassification of employees and deceptive leasing; defining 'employee'; relating to the 05 Workers' Compensation Board's approval of attorney fees in a settlement agreement; 06 and providing for an effective date." 07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 08 * Section 1. AS 23.05.067(a) is amended to read: 09 (a) Each insurer providing workers' compensation insurance and each 10 employer who is self-insured or uninsured for purposes of AS 23.30 in this state shall 11 pay an annual service fee to the department for the administrative expenses of the state 12 for workers' safety programs under AS 18.60 and the workers' compensation program 13 under AS 23.30 as follows: 14 (1) for each employer, 15 (A) except as provided in (b) of this section, the service fee 16 shall be paid each year to the department at the time that the annual report is 17 required to be filed under AS 23.30.155(m) or (n); and 18 (B) the service fee is 2.9 percent of all payments reported to the 19 division of workers' compensation in the department under AS 23.30.155(m) 20 or (n), except second injury fund payments; and 21 (2) for each insurer, the director of the division of insurance shall, 22 under (e) of this section, deposit from funds received from the insurer under 23 AS 21.09.210 a service fee of 2.5 [1.82] percent of the direct premium income for 24 workers' compensation insurance received by the insurer during the year ending on the 25 preceding December 31, subject to all the deductions specified in AS 21.09.210(b). 26 * Sec. 2. AS 23.05.067(a), amended by sec. 1 of this Act, is amended to read: 27 (a) Each insurer providing workers' compensation insurance and each 28 employer who is self-insured or uninsured for purposes of AS 23.30 in this state shall 29 pay an annual service fee to the department for the administrative expenses of the state
01 for workers' safety programs under AS 18.60 and the workers' compensation program 02 under AS 23.30 as follows: 03 (1) for each employer, 04 (A) except as provided in (b) of this section, the service fee 05 shall be paid each year to the department at the time that the annual report is 06 required to be filed under AS 23.30.155(m) or (n); and 07 (B) the service fee is 2.9 percent of all payments reported to the 08 division of workers' compensation in the department under AS 23.30.155(m) 09 or (n), [EXCEPT SECOND INJURY FUND PAYMENTS]; and 10 (2) for each insurer, the director of the division of insurance shall, 11 under (e) of this section, deposit from funds received from the insurer under 12 AS 21.09.210 a service fee of 2.5 percent of the direct premium income for workers' 13 compensation insurance received by the insurer during the year ending on the 14 preceding December 31, subject to all the deductions specified in AS 21.09.210(b). 15 * Sec. 3. AS 23.05.067(e) is amended to read: 16 (e) Annual service fees and civil penalties collected under this section and 17 AS 23.30.155(c) and (m) shall be deposited in the workers' safety and compensation 18 administration account in the state treasury. Under AS 37.05.146(c), the service fees 19 and civil penalties shall be accounted for separately, and appropriations from the 20 account are not made from the unrestricted general fund. The legislature may 21 appropriate money from the account for expenditures by the department for necessary 22 costs incurred by the department in the administration of the workers' safety programs 23 contained in AS 18.60 and of the Alaska Workers' Compensation Act contained in 24 AS 23.30. Nothing in this subsection creates a dedicated fund or dedicates the money 25 in the account for a specific purpose. Money deposited in the account does not lapse at 26 the end of a fiscal year unless otherwise provided by an appropriation. 27 * Sec. 4. AS 23.30.015(e) is amended to read: 28 (e) An amount recovered by the employer under an assignment, whether by 29 action or compromise, shall be distributed as follows: 30 (1) the employer shall retain an amount equal to 31 (A) the expenses incurred by the employer with respect to the
01 action or compromise, including a reasonable attorney fee determined by the 02 board; 03 (B) the cost of all benefits actually furnished by the employer 04 under this chapter; 05 (C) all amounts paid as compensation [AND SECOND- 06 INJURY FUND PAYMENTS,] and, if the employer is self-insured or 07 uninsured, all service fees paid under AS 23.05.067; 08 (D) the present value of all amounts payable later as 09 compensation, computed from a schedule prepared by the board, and the 10 present value of the cost of all benefits to be furnished later under 11 AS 23.30.095 as estimated by the board; the amounts so computed and 12 estimated shall be retained by the employer as a trust fund to pay compensation 13 and the cost of benefits as they become due and to pay any finally remaining 14 excess sum to the person entitled to compensation or to the representative; and 15 (2) the employer shall pay any excess to the person entitled to 16 compensation or to the representative of that person. 17 * Sec. 5. AS 23.30.070(a) is amended to read: 18 (a) Within 10 days from the date the employer has knowledge of an injury or 19 death or from the date the employer has knowledge of a disease or infection, alleged 20 by the employee or on behalf of the employee to have arisen out of and in the course 21 of the employment, the employer shall file with [SEND TO] the division a report 22 setting out 23 (1) the name, address, and business of the employer; 24 (2) the name, address, and occupation of the employee; 25 (3) the cause and nature of the alleged injury or death; 26 (4) the year, month, day, and hour when and the particular locality 27 where the alleged injury or death occurred; and 28 (5) the other information that the division may require. 29 * Sec. 6. AS 23.30.070(b) is amended to read: 30 (b) Additional reports with respect to the injury and to the condition of the 31 employee shall be filed [SENT] by the employer with [TO] the division at the times
01 and in the manner that the director prescribes. 02 * Sec. 7. AS 23.30.070(d) is amended to read: 03 (d) Filing [MAILING] of the report with [AND A COPY TO] the division in 04 a format prescribed by the director [IN A STAMPED ENVELOPE], within the 05 time prescribed in (a) or (b) of this section, is compliance with this section. 06 * Sec. 8. AS 23.30.070(f) is amended to read: 07 (f) An employer who fails or refuses to file [SEND] a report required of the 08 employer by this section or who fails or refuses to file [SEND] the report required by 09 (a) of this section within the time required shall, if so required by the board, pay the 10 employee or the legal representative of the employee or other person entitled to 11 compensation by reason of the employee's injury or death an additional award equal to 12 20 percent of the amounts that were unpaid when due. The award shall be against 13 either the employer or the insurance carrier, or both. 14 * Sec. 9. AS 23.30.075(b) is repealed and reenacted to read: 15 (b) If an employer is a corporation, limited liability company, or limited 16 liability partnership, corporate executive officers or members or partners who have at 17 least a 10 percent ownership in the business entity shall be personally, jointly, and 18 severally liable together with the business entity for the payment of all compensation 19 or other benefits for which the business entity is liable under this chapter if the 20 business entity is not insured or qualified as a self-insurer at the time of the injury or 21 death. If an employer is a corporation, limited liability company, or limited liability 22 partnership, corporate executive officers, or members or partners who have at least a 23 10 percent ownership in the business entity shall be personally, jointly, and severally 24 liable together with the business entity for the payment of a civil penalty under 25 AS 23.30.080 for which the business entity is liable. 26 * Sec. 10. AS 23.30.080(e) is amended to read: 27 (e) If a representative of the department investigates an employer's failure to 28 file the evidence of compliance required by AS 23.30.085 and, after investigation, 29 there is substantial evidence that the employer failed to insure or provide security as 30 required by AS 23.30.075, the representative shall inform the employer. The 31 representative may request the director to issue a stop order prohibiting the use of
01 employee labor by the employer until the employer insures or provides security as 02 required by AS 23.30.075. The director may issue a stop order, without a hearing, 03 based on the representative's investigation. The director shall dissolve a stop order 04 issued under this subsection upon receipt of substantial evidence that the employer is 05 insured or has provided security as required by AS 23.30.075(a). If an employer fails 06 to comply with a stop order issued under this subsection, the division may [PETITION 07 THE BOARD TO ASSESS A CIVIL PENALTY. THE BOARD MAY] assess a civil 08 penalty of $1,000 a day. An employer who is assessed a penalty under this subsection 09 may not obtain a public contract with the state or a political subdivision of the state for 10 the three years following violation of the stop order. 11 * Sec. 11. AS 23.30.080(f) is repealed and reenacted to read: 12 (f) If an employer fails to insure or provide security as required by 13 AS 23.30.075 or is underinsured as result of misclassifying employees or engaging in 14 deceptive leasing practices as defined in AS 23.30.250, the division may assess a civil 15 penalty of up to three times the workers' compensation insurance premium that the 16 employer would have paid if the employer had insured, provided the required security 17 or properly classified employees. The division shall calculate the premium based on 18 the employer's payroll and the assigned risk rates approved by the division of 19 insurance in effect at the time the employer was uninsured or underinsured. The 20 division shall apply aggravating and mitigating factors adopted in regulation to set the 21 penalty amount. Notwithstanding AS 23.30.250(e), a civil penalty under this 22 subsection may be assessed against an employer that misclassifies employees or 23 engages in deceptive leasing practices, even if the employer does not do so knowingly 24 and with the purpose of evading full payment for workers' compensation insurance 25 premiums. 26 * Sec. 12. AS 23.30.080(g) is amended to read: 27 (g) The [IF AN EMPLOYER FAILS TO PAY A CIVIL PENALTY ORDER 28 ISSUED UNDER (D), (E), OR (F) OF THIS SECTION WITHIN SEVEN DAYS 29 AFTER THE DATE OF SERVICE OF THE ORDER UPON THE EMPLOYER, 30 THE] director may declare an [THE] employer in default if the employer (1) fails to 31 pay or contest a civil penalty assessed under this section not later than 30 days
01 after the date of service of notice on the employer; (2) fails to pay a civil penalty 02 not later than 30 days after the board orders payment; or (3) fails to pay a civil 03 penalty in accordance with the terms of a payment plan. The director shall file a 04 certified copy of the penalty order, notice, or payment plan, and declaration of 05 default with the clerk of the superior court. The court shall, upon the filing of the copy 06 [OF THE ORDER] and declaration, enter judgment for the amount declared in default 07 if it is in accordance with law. Anytime after a declaration of default, the attorney 08 general shall, when requested to do so by the director, take appropriate action to 09 ensure collection of the defaulted payment. Review of the judgment may be had as 10 provided under the Alaska Rules of Civil Procedure. Final proceedings to execute the 11 judgment may be had by writ of execution. 12 * Sec. 13. AS 23.30.080 is amended by adding new subsections to read: 13 (h) If the division requests copies of records required to be kept under 14 AS 23.05.080 or information relating to an investigation of an employer's compliance 15 with the insurance provisions of this chapter, and the employer does not provide the 16 requested records or information not later than 30 days after service of the written 17 request, the division may assess a civil penalty against the employer of $150 for each 18 day the employer is late, up to a maximum penalty of $10,000. 19 (i) A civil penalty assessed under this section may not be suspended in full or 20 in part. 21 (j) The division and an employer may agree to a payment plan for a civil 22 penalty assessed under this section. The board in reviewing an assessed civil penalty 23 under (k) of this section may order a payment plan. Interest under any payment plan 24 shall accrue at the rate specified in AS 09.30.070(a) that is in effect on the date the 25 payment plan was agreed to or ordered. 26 (k) An employer may contest a civil penalty assessed by the division under 27 (e), (f), or (h) of this section by filing a petition with the board not later than 30 days 28 after the notice of the civil penalty is served on the employer. The board shall schedule 29 a prehearing not later than 30 days after the filing date of the petition for the purpose 30 of setting a hearing date. The failure of an employer to file evidence of compliance as 31 required by AS 23.30.085 creates a rebuttable presumption that the employer failed to
01 insure or provide security as required by AS 23.30.075. If the employer disputes the 02 division's calculation of the amount that the employer would have paid for workers' 03 compensation insurance during the time the employer was uninsured or underinsured, 04 the employer bears the burden of producing evidence and proving that the workers' 05 compensation insurance premium would have been less than the division's calculation. 06 If the employer does not timely file the petition and cannot show good cause for any 07 late filing of the petition, the assessment of the civil penalty is considered final and not 08 subject to review by the board or a court. 09 * Sec. 14. AS 23.30.082(a) is amended to read: 10 (a) The workers' compensation benefits guaranty fund is established in the 11 general fund to carry out the purposes of this section. The fund is composed of (1) 12 civil penalty and interest payments made by employers under AS 23.30.080; (2) civil 13 penalty payments under AS 23.30.085; (3) [,] income earned on investment of the 14 money in the fund; (4) [,] money deposited in the fund by the department; [,] and (5) 15 appropriations to the fund, if any. However, money appropriated to the fund does not 16 lapse. Amounts in the fund may be appropriated for claims against the fund, for 17 expenses directly related to fund operations and claims, and for legal expenses. 18 * Sec. 15. AS 23.30.085 is repealed and reenacted to read: 19 Sec. 23.30.085. Duty of employer or insurer to file evidence of compliance. 20 (a) An employer or insurer subject to this chapter shall initially file evidence of 21 compliance with the insurance provisions of this chapter with the division, in the 22 format prescribed by the director, not later than 30 days after acquiring insurance. The 23 employer or insurer also shall file evidence of compliance not later than 30 days after 24 the termination of the employer's insurance by expiration or cancellation. The 25 requirements in this section do not apply to an employer who has certification from 26 the division of the employer's financial ability to pay compensation directly without 27 insurance. 28 (b) If an employer or insurer fails, refuses, or neglects to comply with this 29 section, the employer or insurer shall be subject to a civil penalty of $100 for each day 30 the employer or insurer is late. Total penalties under this subsection shall not exceed 31 $1,000 for each late filing and $10,000 for each employer or insurer each year for late
01 filings under this section. 02 * Sec. 16. AS 23.30.097(d) is amended to read: 03 (d) An employer shall pay or controvert an employee's bills for medical 04 treatment under this chapter, excluding prescription charges or transportation for 05 medical treatment, not later than [WITHIN] 30 days after the date that the employer 06 receives the provider's bill or a completed report as required by AS 23.30.095(c), 07 whichever is later. An employer shall authorize or controvert medical treatment 08 or services, excluding prescriptions or transportation for medical treatment, not 09 later than 60 days after an employer receives the provider's written request for 10 medical treatment, including the estimated cost. 11 * Sec. 17. AS 23.30.098 is amended to read: 12 Sec. 23.30.098. Regulations. Under AS 44.62.245(a)(2), in adopting or 13 amending regulations under this chapter, the department may incorporate future 14 amended versions of a document or reference material incorporated by reference if the 15 document or reference material is one of the following: 16 (1) Current Procedural Terminology Codes, produced by the American 17 Medical Association; 18 (2) Healthcare Common Procedure Coding System, produced by the 19 federal Centers for Medicare and Medicaid Services [AMERICAN MEDICAL 20 ASSOCIATION]; 21 (3) International Classification of Diseases, published by the World 22 Health Organization [AMERICAN MEDICAL ASSOCIATION]; 23 (4) Relative Value Guide, produced by the American Society of 24 Anesthesiologists; 25 (5) Diagnostic and Statistical Manual of Mental Disorders, produced 26 by the American Psychiatric Association; 27 (6) Current Dental Terminology, published by the American Dental 28 Association; 29 (7) Resource-Based Relative Value Scale, produced by the federal 30 Centers for Medicare and Medicaid Services; 31 (8) Ambulatory Payment Classifications, produced by the federal
01 Centers for Medicare and Medicaid Services; [OR] 02 (9) Medicare Severity Diagnosis Related Groups, produced by the 03 federal Centers for Medicare and Medicaid Services; 04 (10) International Classification of Diseases, Tenth Revision, 05 Clinical Modification, developed by the National Center for Health Statistics; 06 (11) Clinical Diagnostic Laboratory Services, produced by the 07 federal Centers for Medicare and Medicaid Services; 08 (12) Durable Medical Equipment, Prosthetics, Orthotics, and 09 Supplies, produced by the federal Centers for Medicare and Medicaid Services; 10 (13) Payment Allowance Limits for Medicare Part B Drugs, 11 Average Sale Price, produced by the federal Centers for Medicare and Medicaid 12 Services; 13 (14) Ambulance Fee Schedule, produced by the federal Centers for 14 Medicare and Medicaid Services; 15 (15) Hospital Outpatient Prospective Payment System, produced 16 by the federal Centers for Medicare and Medicaid Services; or 17 (16) Ambulatory Surgical Center Payment System, produced by 18 the federal Centers for Medicare and Medicaid Services. 19 * Sec. 18. AS 23.30.110(c) is repealed and reenacted to read: 20 (c) The board shall schedule a prehearing not later than 30 days after a claim 21 is filed. At the prehearing, the board or the board's designee shall issue a scheduling 22 order that includes a discovery plan and appropriate deadlines, and a date for the 23 hearing. The board or the board's designee may modify the scheduling order, including 24 changing the hearing date, on the board's own motion, if the parties agree to the 25 modification, or upon a showing of good cause by the party seeking the modification. 26 The board shall serve notice on each party at least 10 days before the hearing. 27 * Sec. 19. AS 23.30.110(d) is amended to read: 28 (d) At the hearing, the claimant and the employer may each present evidence 29 in respect to the claim and may be self-represented, or represented by an attorney 30 licensed to practice law in this state or, for a person who is mentally incompetent, 31 a minor, or deceased, by a guardian or other representative appointed by a court.
01 An employer is self-represented when acting through its insurer or the adjusting 02 company handling the claim for the employer's insurer. The workers' 03 compensation benefits guaranty fund is self-represented when acting through its 04 administrator or an adjusting company handling the claim under contract for the 05 fund. The division is self-represented when acting through its investigators [ANY 06 PERSON AUTHORIZED IN WRITING FOR THAT PURPOSE]. 07 * Sec. 20. AS 23.30.110 is amended by adding a new subsection to read: 08 (i) The board shall file its decision not later than 30 days after the hearing 09 record closes. 10 * Sec. 21. AS 23.30.155(a) is amended to read: 11 (a) Compensation under this chapter shall be paid periodically, promptly, and 12 directly to the person entitled to it, without an award, except where liability to pay 13 compensation is controverted by the employer. To controvert a claim, the employer 14 must file a notice, in a format [ON A FORM] prescribed by the director, stating 15 (1) that the right of the employee to compensation is controverted; 16 (2) the name of the employee; 17 (3) the name of the employer; 18 (4) the date of the alleged injury or death; and 19 (5) the type of compensation and all grounds upon which the right to 20 compensation is controverted. 21 * Sec. 22. AS 23.30.155(b) is amended to read: 22 (b) The first installment of compensation, excluding medical benefits, shall 23 be paid [BECOMES DUE] on or before the 21st[14TH] day after the employer has 24 knowledge of the injury or death. [ON THIS DATE, ALL COMPENSATION THEN 25 DUE SHALL BE PAID.] Subsequent compensation, excluding medical benefits, 26 shall be paid in installments, every 21 [14] days, except where the board determines 27 that payment in installments should be made monthly or at some other period. 28 Medical benefits shall be paid in accordance with AS 23.30.095 and 23.30.097. 29 * Sec. 23. AS 23.30.155(c) is amended to read: 30 (c) The insurer or adjuster shall notify the division in a format [AND THE 31 EMPLOYEE ON A FORM] prescribed by the director that the payment of
01 compensation has begun or has been increased, decreased, suspended, terminated, 02 resumed, or changed in type. An initial report shall be filed not later than [WITH 03 THE DIVISION AND SENT TO THE EMPLOYEE WITHIN] 28 days after the date 04 of issuing the first payment of compensation. If at any time 21 days or more pass and 05 no compensation payment is issued, a report notifying the division [AND THE 06 EMPLOYEE] of the termination or suspension of compensation shall be filed not 07 later than [WITH THE DIVISION AND SENT TO THE EMPLOYEE WITHIN] 28 08 days after the date the last compensation payment was issued. A report shall also be 09 filed not later than [WITH THE DIVISION AND SENT TO THE EMPLOYEE 10 WITHIN] 28 days after the date of issuing a payment increasing, decreasing, 11 resuming, or changing the type of compensation paid. If the division is [AND THE 12 EMPLOYEE ARE] not notified within the 28 days prescribed by this subsection for 13 reporting, the insurer or adjuster shall pay a civil penalty of $100 for the first day plus 14 $10 for each day after the first day that the notice was not given. Total penalties under 15 this subsection may not exceed $1,000 for a failure to file a required report. Penalties 16 assessed under this subsection are eligible for reduction under (m) of this section. A 17 penalty assessed under this subsection after penalties have been reduced under (m) of 18 this section shall be increased by 25 percent and shall bear interest at the rate 19 established under AS 45.45.010. 20 * Sec. 24. AS 23.30.155(d) is amended to read: 21 (d) If the employer controverts the right to compensation, the employer shall 22 file with the division, in a format prescribed by the director, [AND SEND TO THE 23 EMPLOYEE] a notice of controversion on or before the 21st day after the employer 24 has knowledge of the alleged injury or death. If the employer controverts the right to 25 compensation, excluding medical benefits, after payments have begun, the employer 26 shall file with the division, in a format prescribed by the director, [AND SEND TO 27 THE EMPLOYEE] a notice of controversion not later than the date [WITHIN 28 SEVEN DAYS AFTER] an installment of compensation payable without an award is 29 due under (b) of this section. If the employer controverts medical treatment, the 30 employer shall file with the division, in a format prescribed by the director, a 31 notice of controversion not later than when the payment, reimbursement, or
01 authorization for medical treatment is due under AS 23.30.097. When payment of 02 temporary disability benefits is controverted solely on the grounds that another 03 employer or another insurer of the same employer may be responsible for all or a 04 portion of the benefits, the most recent employer or insurer who is party to the claim 05 and who may be liable shall make the payments during the pendency of the dispute. 06 When a final determination of liability is made, any reimbursement required, including 07 interest at the statutory rate, and all costs and attorney fees incurred by the prevailing 08 employer, shall be made not later than [WITHIN] 14 days after the determination. 09 * Sec. 25. AS 23.30.155(e) is amended to read: 10 (e) If any installment of compensation, excluding medical benefits, payable 11 without an award is [NOT] paid late [WITHIN SEVEN DAYS AFTER IT 12 BECOMES DUE], as provided in (b) of this section, there shall be added to the unpaid 13 installment an amount equal to 25 percent of the installment. If a bill for medical 14 treatment, including prescription charges or transportation for medical 15 treatment, is paid or reimbursed late, or a request for medical treatment is not 16 timely authorized as provided in AS 23.30.097, there shall be added an amount 17 equal to 25 percent of the bill, reimbursement, or estimated cost of requested 18 medical treatment. This additional amount shall be paid at the same time as, and in 19 addition to, the installment, bill, or reimbursement, or sent with authorization for 20 medical treatment, unless notice is filed under (d) of this section or unless the 21 nonpayment or late authorization is excused by the board after a showing by the 22 employer that owing to conditions over which the employer had no control the 23 installment, bill, or reimbursement could not be paid or the request could not be 24 authorized within the period prescribed for the payment or authorization. The 25 additional amount shall be paid directly to the recipient to whom the unpaid 26 installment, bill, or reimbursement was to be paid or, if authorization of medical 27 treatment was requested, to the employee seeking the medical treatment. 28 * Sec. 26. AS 23.30.155(m) is amended to read: 29 (m) On or before March 1 of each year, the insurer or adjuster shall file a 30 verified annual report in a format [ON A FORM] prescribed by the director stating 31 the total amount of all compensation by type, the number of claims received and the
01 percentage controverted, medical and related benefits, vocational rehabilitation 02 expenses, legal fees, including a separate total of fees paid to attorneys and fees paid 03 for the other costs of litigation, and penalties paid on all claims during the preceding 04 calendar year. If the annual report is timely and complete when received by the 05 division and provides accurate information about each category of payments, the 06 director shall review the timeliness of the insurer's or adjuster's reports filed during the 07 preceding year under (c) of this section. If, during the preceding year, the insurer or 08 adjuster filed at least 99 percent of the reports on time, the penalties assessed under (c) 09 of this section shall be waived. If, during the preceding year, the insurer or adjuster 10 filed at least 97 percent of the reports on time, 75 percent of the penalties assessed 11 under (c) of this section shall be waived. If, during the preceding year, the insurer or 12 adjuster filed 95 percent of the reports on time, 50 percent of the penalties assessed 13 under (c) of this section shall be waived. If, during the preceding year, the insurer's or 14 adjuster's reports have not been filed on time at least 95 percent of the time, none of 15 the penalties assessed under (c) of this section shall be waived. The penalties that are 16 not waived are due and payable when the insurer or adjuster receives notification from 17 the director regarding the timeliness of the reports. If the annual report is not filed by 18 March 1 of each year, the insurer or adjuster shall pay a civil penalty of $100 for the 19 first day the annual report is late and $10 for each additional day the report is late. If 20 the annual report is incomplete when filed, the insurer or adjuster shall pay a civil 21 penalty of $1,000. 22 * Sec. 27. AS 23.30.155(q) is amended to read: 23 (q) Compensation [UNLESS COMPENSATION] due the employee under 24 this chapter must be [IS] paid by negotiable instrument that is drawn on a state or 25 federal financial institution, by prepaid debit card, or by electronic funds transfer 26 [THE EMPLOYER SHALL INCREASE THE WEEKLY RATE OF 27 COMPENSATION DUE THE EMPLOYEE UNDER AS 23.30.175 BY TWO 28 PERCENT]. 29 * Sec. 28. AS 23.30.165(a) is amended to read: 30 (a) If an [EACH] employee, a [AND] beneficiary, or the workers' 31 compensation benefits guaranty fund is entitled to compensation under the
01 provisions of this chapter, the person or the fund has a lien for the full amount of the 02 compensation the person or the fund is entitled to, including costs and disbursements 03 of suit and attorney fees allowed, on [UPON] all of the property in connection with 04 the construction, preservation, maintenance, or operation of which the work of the 05 employee was being performed at the time of the injury or death. For example: in the 06 case of an employee injured or killed while engaged in mining or in work connected 07 with mining, the lien extends to the entire mine and all property used in connection 08 with it; and in the case of an employee injured or killed while engaged in fishing or in 09 the packing, canning, or salting of fish, or other branch of the fish industry, the lien 10 extends to the entire packing, fishing, salting, or canning plant or establishment and all 11 property used in connection with it; and this is the case with other businesses, 12 industries, works, occupations, and employments. If the workers' compensation 13 benefits guaranty fund is entitled to a civil penalty assessed under AS 23.30.080, 14 the fund has a lien for the full amount of the civil penalty on all of the property in 15 connection with the construction, preservation, maintenance, or operation of the 16 uninsured or underinsured employer. 17 * Sec. 29. AS 23.30.165(d) is amended to read: 18 (d) A person or the workers' compensation benefits guaranty fund 19 claiming a lien under this chapter shall, not later than [WITHIN] one year after the 20 date of the injury from which the claim of compensation arises, record in the office of 21 the recorder of the recording district in which the property affected by the lien is 22 located a notice of lien signed and verified by the claimant, [OR] someone on behalf 23 of the claimant, or the fund, and stating [, IN SUBSTANCE,] the name of the person 24 injured or killed out of which injury or death the claim of compensation arises, the 25 name of the employer of the injured or deceased person at the time of the injury or 26 death, a description of the property affected or covered by the lien, and the name of 27 the owner or reputed owner of the property. In claiming a lien for a civil penalty 28 under AS 23.30.080, the workers' compensation benefits guaranty fund shall, not 29 later than one year after the date of a declaration of default, record in the office 30 of the recorder of the recording district in which the property affected by the lien 31 is located a signed and verified notice of lien stating the name of the employer
01 assessed a civil penalty under AS 23.30.080, a description of the property affected 02 or covered by the lien, and the name of the owner or reputed owner of the 03 property. 04 * Sec. 30. AS 23.30.205 is amended by adding a new subsection to read: 05 (g) Claims for reimbursement may not be submitted to the second injury fund 06 after September 1, 2017. The fund shall continue to make reimbursement payments on 07 claims accepted before July 1, 2018, or ordered by the board, until the fund's liabilities 08 for the claim are extinguished. 09 * Sec. 31. AS 23.30.230(a) is amended to read: 10 (a) The following persons are not covered by this chapter: 11 (1) a part-time baby-sitter; 12 (2) a cleaning person; 13 (3) harvest help and similar part-time or transient help; 14 (4) a person employed as a sports official on a contractual basis and 15 who officiates only at sports events in which the players are not compensated; in this 16 paragraph, "sports official" includes an umpire, referee, judge, scorekeeper, 17 timekeeper, organizer, or other person who is a neutral participant in a sports event; 18 (5) a person employed as an entertainer on a contractual basis; 19 (6) a commercial fisherman, as defined in AS 16.05.940; 20 (7) an individual who drives a taxicab whose compensation and written 21 contractual arrangement is as described in AS 23.10.055(a)(13), unless the hours 22 worked by the individual or the areas in which the individual may work are restricted 23 except to comply with local ordinances; 24 (8) a participant in the Alaska temporary assistance program 25 (AS 47.27) who is engaged in work activities required under AS 47.27.035 other than 26 subsidized or unsubsidized work or on-the-job training; 27 (9) a person employed as a player or coach by a professional hockey 28 team if the person is covered under a health care insurance plan provided by the 29 professional hockey team, the coverage is applicable to both work related and 30 nonwork related injuries, and the coverage provides medical and related benefits as 31 required under this chapter, except that coverage may not be limited to two years from
01 the date of injury as described under AS 23.30.095(a); in this paragraph, "health care 02 insurance" has the meaning given in AS 21.12.050; [AND] 03 (10) a person working as a qualified real estate licensee who performs 04 services under a written contract that provides that the person will not be treated as an 05 employee for federal income tax or workers' compensation purposes; in this 06 paragraph, "qualified real estate licensee" means a person who is required to be 07 licensed under AS 08.88.161 and whose payment for services is directly related to 08 sales or other output rather than the number of hours worked; and 09 (11) a person employed as an independent contractor; a person is 10 an independent contractor only if the person 11 (A) maintains a licensed business, the success or 12 profitability of which does not depend exclusively or primarily on the 13 individual for whom or the entity for which services are performed; 14 (B) has a federal employer identification number issued by 15 the Internal Revenue Service or has filed business or self-employment 16 income tax returns with the Internal Revenue Service the previous tax 17 year, or, for a new business that was not operating in the previous tax 18 year, intends to file business or self-employment tax returns with the 19 Internal Revenue Service; 20 (C) has an express contract to perform the services; 21 (D) maintains liability insurance or other insurance policies 22 necessary to protect the employees, financial interests, and customers of 23 the person's business; 24 (E) is free from direction and control over the means and 25 manner of providing services, subject only to the right of the individual 26 for whom or entity for which the services are provided to specify the 27 desired results, completion schedule, or range of work hours; 28 (F) is engaged in a trade, occupation, profession, or 29 business to provide services that are outside the usual course of business 30 for the individual for whom or the entity for which the services are 31 performed;
01 (G) incurs most of the expenses for materials, tools, 02 equipment, labor, and other operational costs necessary for the person's 03 business; 04 (H) has the opportunity for profit and may suffer loss based 05 on the management of revenue and expenses with the person's business; 06 (I) does not work as part of a team of individuals or entities 07 on a singular task, such as painting a building or installing a roof, where 08 the work performed by the person cannot be clearly isolated form the 09 work performed by other individuals or entities; 10 (J) hires, pays, controls, and fires any employees required 11 to perform the work for which the person was hired; and 12 (K) maintains a business location separate from the 13 location of the individual for whom or the entity for which services are 14 performed. 15 * Sec. 32. AS 23.30.240 is repealed and reenacted to read: 16 Sec. 23.30.240. Officers of corporations, municipal corporations, and 17 nonprofit corporations, and members of limited liability companies as employees. 18 (a) Except as provided in (b) of this section, an executive officer elected or appointed 19 and empowered in accordance with the charter and bylaws of a corporation, or a 20 member of a limited liability company organized under AS 10.50, is not an employee 21 of the business entity under this chapter if the executive officer or member owns at 22 least 10 percent of the business entity. Except as provided in (b) of this section, an 23 executive officer of a municipal corporation or of a charitable, religious, educational, 24 or other nonprofit corporation is not an employee of the corporation under this 25 chapter. 26 (b) Any type of corporation or limited liability company may bring an 27 executive officer, or a member exempted under (a) of this section, within the coverage 28 of the business entity's insurance contract by specifically including the executive 29 officer or member in the contract of insurance. The election to bring the executive 30 officer or member within the business entity's coverage continues in force for the 31 period the contract of insurance is in effect. During that period, an executive officer or
01 a member brought within the coverage of the insurance contract is an employee of the 02 business entity under this chapter. 03 * Sec. 33. AS 23.30.247(c) is amended to read: 04 (c) This section may not be construed to prohibit an employer from requiring a 05 prospective employee to fill out a preemployment questionnaire or application 06 regarding the person's prior health or disability history as long as it is meant to 07 [EITHER DOCUMENT WRITTEN NOTICE FOR SECOND INJURY FUND 08 REIMBURSEMENT UNDER AS 23.30.205(c) OR] determine whether the employee 09 has the physical or mental capacity to meet the documented physical or mental 10 demands of the work. 11 * Sec. 34. AS 23.30.250(a) is amended to read: 12 (a) A person who (1) knowingly makes a false or misleading statement, 13 representation, or submission, or knowingly fails to report a material fact related to 14 a benefit under this chapter; (2) knowingly assists, abets, solicits, or conspires in 15 making a false or misleading submission affecting the payment, coverage, or other 16 benefit under this chapter; (3) knowingly misclassifies employees or engages in 17 deceptive leasing practices for the purpose of evading full payment of workers' 18 compensation insurance premiums; or (4) employs or contracts with a person or firm 19 to coerce or encourage an individual to file a fraudulent compensation claim is civilly 20 liable to a person adversely affected by the conduct, is guilty of theft by deception as 21 defined in AS 11.46.180, and may be punished as provided by AS 11.46.120 - 22 11.46.150. The division may assess a civil penalty as provided in AS 23.30.080 23 against an employer that misclassifies employees or engages in deceptive leasing 24 practices. 25 * Sec. 35. AS 23.30.250(b) is amended to read: 26 (b) If the board, after a hearing, finds that a person has obtained compensation, 27 medical treatment, or another benefit provided under this chapter, or that a provider 28 has received a payment, by knowingly making a false or misleading statement or 29 representation, or knowingly failing to report a material fact [FOR THE PURPOSE 30 OF OBTAINING THAT BENEFIT], the board shall order that person to make full 31 reimbursement of the cost of all benefits obtained. Upon entry of an order authorized
01 under this subsection, the board shall also order that person to pay all reasonable costs 02 and attorney fees incurred by the employer and the employer's carrier in obtaining an 03 order under this section and in defending any claim made for benefits under this 04 chapter. If a person fails to comply with an order of the board requiring reimbursement 05 of compensation and payment of costs and attorney fees, the employer may declare the 06 person in default and proceed to collect any sum due as provided under 07 AS 23.30.170(b) and (c). 08 * Sec. 36. AS 23.30.250 is amended by adding new subsections to read: 09 (d) While receiving compensation provided under this chapter, an employee 10 shall inform the employer or insurer of the employee's receipt of any unemployment 11 or disability benefits other than the compensation provided under this chapter, and 12 shall report any employment other than work for the employer providing the 13 compensation under this chapter. An employee knowingly fails to report a material 14 fact under (a) and (b) of this section if the employee does not disclose the receipt of 15 unemployment or other disability benefits, or other employment, and the employee 16 knowingly receives compensation under this chapter that the employee is not entitled 17 to because of the receipt of the other benefits or other employment. In this subsection, 18 "employment" means any type of work, whether paid or unpaid. 19 (e) An employer misclassifies employees or engages in deceptive leasing 20 practices under (a) of this section if, for the purpose of evading full payment of 21 workers' compensation insurance premiums, the employer knowingly falsifies or 22 misrepresents the 23 (1) job duties of employees; 24 (2) payments made to employees, including concealing payment by not 25 reporting or underreporting wages or payments made in kind; 26 (3) true identity of the employer; 27 (4) nature of the employer's business; 28 (5) the employer's history of injuries or deaths covered under this 29 chapter; or 30 (6) number of employees, including by misclassifying a worker as an 31 independent contractor or as a nonemployee when that worker is an employee covered
01 under this chapter as provided in AS 23.30.230, 23.30.239, 23.30.240, or 23.30.395. 02 * Sec. 37. AS 23.30.255(a) is amended to read: 03 (a) An employer required to secure the payment of compensation under this 04 chapter who fails to do so is guilty of a class B felony if the amount involved exceeds 05 $25,000 or a class C felony if the amount involved is $25,000 or less. If the employer 06 is a limited liability company, limited liability partnership, or corporation, the 07 members or partners who have at least a 10 percent ownership interest in the 08 business entity, or the corporate executive officers [ITS PRESIDENT, 09 SECRETARY, AND TREASURER] are also severally liable to the fine or 10 imprisonment imposed for the failure of the business entity [CORPORATION] to 11 secure the payment of compensation. [THE PRESIDENT, SECRETARY, AND 12 TREASURER, ARE SEVERALLY PERSONALLY LIABLE, JOINTLY WITH THE 13 CORPORATION, FOR THE COMPENSATION OR OTHER BENEFIT WHICH 14 ACCRUES UNDER THIS CHAPTER IN RESPECT TO AN INJURY WHICH 15 HAPPENS TO AN EMPLOYEE OF THE CORPORATION WHILE IT HAS 16 FAILED TO SECURE THE PAYMENT OF COMPENSATION AS REQUIRED BY 17 AS 23.30.075.] 18 * Sec. 38. AS 23.30.255(b) is amended to read: 19 (b) An employer who knowingly transfers, sells, encumbers, assigns, or in any 20 manner disposes of, conceals, secretes, or destroys any property after one of the 21 employer's employees has been injured within the scope of this chapter, with intent to 22 avoid the payment of compensation under this chapter to the employee or the 23 employee's dependents, is guilty of a class B felony if the amount involved exceeds 24 $25,000 or a class C felony if the amount involved is $25,000 or less. If the employer 25 is a limited liability company, limited liability partnership, or corporation, the 26 members or partners who have at least a 10 percent ownership interest, or the 27 corporate executive officers [ITS PRESIDENT, SECRETARY, AND 28 TREASURER] are also severally liable to the penalty of imprisonment as well as 29 jointly liable with the business entity [CORPORATION] for the fine. 30 * Sec. 39. AS 23.30.260 is amended by adding a new subsection to read: 31 (c) Notwithstanding AS 23.30.145 and (a) of this section, approval of a fee is
01 not required if the parties who reach an agreement in regard to a claim for injury or 02 death under this chapter agree to the payment of attorney fees, and the agreement in 03 regard to a claim for injury or death does not require board approval under 04 AS 23.30.012. 05 * Sec. 40. AS 23.30.395(19) is repealed and reenacted to read: 06 (19) "employee" means a person who is not an independent contractor 07 as defined in AS 23.30.230 and who, under a contract of hire, express or implied, is in 08 the service of an employer as defined in (20) of this section; 09 * Sec. 41. AS 23.30.015(c), 23.30.040, 23.30.205, 23.30.395(35); and AS 37.05.146(c)(12) 10 are repealed. 11 * Sec. 42. AS 23.30.040(f), 23.30.080(d), and 23.30.110(h) are repealed. 12 * Sec. 43. The uncodified law of the State of Alaska is amended by adding a new section to 13 read: 14 APPLICABILITY. (a) AS 23.30.110(c), as repealed and reenacted by sec. 18 of this 15 Act, and AS 23.30.110(h), as repealed in sec. 42 of this Act, apply to claims filed on or after 16 the effective date of this Act. Claims pending on the effective date of this Act shall be 17 continued and completed under AS 23.30.110(c) and 23.30.110(h), as those statutes read on 18 the day before the effective date of this Act. 19 (b) Notwithstanding AS 23.30.075(b), as amended by sec. 9 of this Act, AS 23.30.080 20 as amended by secs. 10, 11, 12 and 13 of this Act, and AS 23.30.080(d), as repealed by sec. 21 42 of this Act, the division of workers' compensation's petitions against employers for a 22 failure to insure for workers' compensation liability that are pending before Workers' 23 Compensation Board before the effective date of this Act shall be continued and completed 24 under AS 23.30.075(b) and AS 23.30.080, as those statutes read on the day before the 25 effective date of this Act. 26 * Sec. 44. The uncodified law of the State of Alaska is amended by adding a new section to 27 read: 28 TRANSITION: IMPLEMENTATION OF REPEAL OF SECOND INJURY FUND. 29 The balance of the second injury fund created by former AS 23.30.040 shall be transferred to 30 the general fund on the effective date of this section. 31 * Sec. 45. The uncodified law of the State of Alaska is amended by adding a new section to
01 read: 02 TRANSITION: REGULATIONS. The Department of Labor and Workforce 03 Development and the Workers' Compensation Board may adopt regulations to implement this 04 Act. The regulations take effect under AS 44.62 (Administrative Procedure Act), but not 05 before the effective date of the law implemented by the regulation. 06 * Sec. 46. The uncodified law of the State of Alaska is amended by adding a new section to 07 read: 08 CONDITIONAL EFFECT NOTIFICATION (a). Sections 2, 4, 33, 41, and 44 of this 09 Act take effect only if the commissioner of labor and workforce development notifies the 10 revisor of statutes and the lieutenant governor in writing as required under (b) of this section. 11 (b) The commissioner of labor and workforce development shall notify the revisor of 12 statutes and the lieutenant governor in writing of the date that all liability for previously 13 accepted claims to the second injury fund under AS 23.30.205, and claims ordered to be paid 14 from that fund, have been satisfied. 15 * Sec. 47. If, under sec. 46 of this Act, secs. 2, 4, 33, 41, and 44 of this Act take effect, they 16 take effect on the day after the commissioner of labor and workforce development makes the 17 notification required under sec. 46 of this Act. 18 * Sec. 48. Sec. 45 of this Act takes effect immediately under AS 01.10.070(c).