Legislature(1999 - 2000)
03/20/2000 03:50 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 419-WORKERS' COMPENSATION CHAIRMAN ROKEBERG announced the next order of business is HOUSE BILL NO. 419, "An Act relating to the weekly rate of compensation and minimum and maximum compensation rates for workers' compensation; specifying components of a workers' compensation reemployment plan; adjusting workers' compensation benefits for permanent partial impairment, for reemployment plans, for rehabilitation benefits, for widows, widowers, and orphans, and for funerals; relating to permanent total disability of an employee receiving rehabilitation benefits; relating to calculation of gross weekly earnings for workers' compensation benefits for seasonal and temporary workers and for workers with overtime or premium pay; setting time limits for requesting a hearing on claims for workers' compensation, for selecting a rehabilitation specialist, and for payment of medical bills; relating to termination and to waiver of rehabilitation benefits, obtaining medical releases, and resolving discovery disputes relating to workers' compensation; setting an interest rate for late payments of workers' compensation; providing for updating the workers' compensation medical fee schedule; and providing for an effective date." Number 2284 BARBARA WILLIAMS, Alaska Injured Workers Alliance, testified via teleconference from Anchorage. She stated: I would like to speak to you today about HB 419. We don't feel that this bill is in the best interest of workers. It is done by the same committee that has formulated 1988 changes that have devastated workers and their families. We now know conclusively by the Legislative Budget and Audit Report [October 31, 1999, included in the bill packet] that just came out. Intentionally or not, have been and are being disadvantaged by the workers' compensation system. Many workers have waited for medical care and been denied benefits while knowing that fee caps on workers' attorneys did little or nothing to help them secure information regarding their rights and benefits. The worker has little or no help provided by the Division of Workers' Compensation. We are now asking for your assistance to make this a more fair and just system. We know that recent budget cuts have not helped this situation but complicated it yet even more. I hope that you will carefully review the Legislative Budget and Audit Report and see that changes can be implemented on the recommendation of the Audit team. We need to improve service, better enforcement of the current law, and straighten out our penalty issues. If insurance companies are regularly under reporting on verified annual data that the division is not enforcing the penalties, we could have more revenue to assist in securing better services. Defense attorney are given more preferential treatment than injured workers and their attorneys and the audit confirms this. We need to make this system fairer for all parties. The average worker earning $155 per week makes below poverty wages, with no inflationary increase. With the rate proposals in HB 419, it is not even keeping pace with today's inflation in real money terms. None of the increases are based on today's real money terms and do not account for any inflation. Why would we further complicate an already complicated matter? Why not use the Legislative Budget and Audit recommendations to first make the process more fair for all parties, then make constructive changes that reflect more real terms for workers. We need to move them past social services and delayed medical treatments and enforce even handed fairness to all parties. Lastly, we need better education programs geared for workers. 28,000 claims per year and 10 workers' compensation attorneys are not enough to cover the whole state. Better wages for workers' attorneys would mean more attorneys. Fee caps on defense attorneys' fees are essential. Education programs and technical assistance are only provided by the Alaska Injured Workers Alliance at this time. Workers need better access to information to make informed decisions about their rights and benefits. The further away from Anchorage they are, the less access to information they have. We are not against anyone, but this system was designed for workers long ago and needs input from the very disadvantaged workers, not a bunch of people who are supposed to represent our interest. With three-quarters of the majority working against injured workers from the start, we are looking to you to insure better benefits and safer working conditions in which to work. We hope you will be sensitive to our needs and not just the people that control of our benefits. We hope that you guys will consider the recommendation of the audit and consider that in this house bill instead of just accepting HB 419 because we really feel like it's in the best interest of workers. Number 2427 LAURA WALDON, Alaska Injured Workers Alliance, testified via teleconference from Anchorage. She agrees with what was stated by the previous testifier because the injured worker ends up without any type of medical coverage or treatment. She said: So, there's no way that they can become better and with what you have here, and from my understanding, your mission as a workers' compensation board [is] to assure that Alaskan workers who suffer work related injuries or illness are provided adequate medical care...and this is not happening and this is your mission statement. How can you create new laws when you can't even enforce the ones you already have on the book?... TAPE 00-31, SIDE B ...and that is not what the Workers' Compensation Board mission statement states. Even from 1998, you're supposed to be here to help the workers, but instead you're buying into the insurance company's monopoly, and I repeat "monopoly" of insurance; how they railroad people's lives...you say they can't do this, that and the other, but they're doing it and walking away with it, and you're letting it happen because we're depending on you as the board to make things right for the injured workers. You're not doing that. You're not living up to your missions. Number 0044 JERRY FLOCK testified via teleconference from Anchorage. He said: I am an injured worker with an uninsured employer who you may have heard of. My employer, General Roofing Systems,...paid somebody $100 as a down payment and gave them a 38-special to take me out and relieve them of their responsibility and of their liability. Through the whole process, Alaska Workers' Compensation Board has done nothing to protect my rights or me. The only source of information that I have had to help me in any of this last three years is the Alaska Injured Workers Alliance. By passing HB 419, you are enforcing the fact that the division regularly works with employers and insurance companies as the legislative audit confirms. I have had surgery that Public Assistance had to pay for, not my employer, and it was my employer's responsibility...They have disposed of their responsibilities regularly and, not only do I have to fear for my own safety, but the safety of my family as well. You cannot possibly tell me that the DWC [Division of Workers' Compensation] is doing all that it can to fairly access workers' rights to medical care and benefits. I am a prime example of how this can all go wrong. I urge you to follow the recommendations and clean up the workers compensation act and make it fair for all parties, not just employers and insurance companies. My employers had let their policy lapse 16 times and one other employee broke his back while falling off a roof since my employer knew no one would enforce the laws to protect me those like me. Proper enforcement is necessary to see that the workers are protected. Two years ago when the Alaska Injured [Workers] Alliance started inquiring, an alarming 60 percent, over half, of the state employers were uninsured. This must change. We also need better education programs and access to legal assistance to process our claims. I urge you to see fit to protect all workers in this state and see that everyone is treated fairly and not denied due process. Due process escapes me to this day because no one will see that my employer pays for my benefits and secures my medical care and provides retraining. I hope that you will remember me and be an effective part of proper enforcement of these laws. CHAIRMAN ROKEBERG asked if Mr. Flock has filed charges with the police or the Alaska State Troopers. MR. FLOCK replied yes. Number 0222 DEBORAH BUSH testified via teleconference from Mat-Su. She stated: I was injured at work in June of 1995 and I have endured unconscionable practices as the result of the vagueness presented by the act. Insurance companies have been empowered by the act and injured workers are left at a disadvantage. Unfortunately, the more complex the injury and medical issues and medical claims become, the more difficult the injured workers have in receiving just outcomes in dealing with workers' comp[ensation] insurance companies. The increasing cost of workers' compensation insurance premiums are becoming unnecessarily inflated at the result of risk management cost. The audit [Legislative Budget and Audit Report] sites multiple causes for the increase of premiums (indisc.) for employers. These increased medical costs, extended disabilities, and retraining costs are bonafide. The finding that extended the disability payments made to workers thought to be capable of returning to work is a blanket for the cost of litigation. Discovery, investigation and other costly means of litigation is overinflating the cost covering work-related injuries. Most medical disputes involve one EME physician, that is an Employer Medical Evaluation or the insurance doctor's opinion. Their disputes generally contradict the multiple opinions from the injured worker's treating physician and other attending physicians. I've had three EME evaluations and not one was performed by a local doctor. One doctor was flown up from California and I was flown to California for the second and third at a cost of $1,200 just for lodging and the flights. I was seen for a total of 15 minutes and both doctors produced 17- and 22-page opinions which were quite costly. The cause of my continued disability is industrial in basis. The insurance companies paid medical opinion relates no industrial basis and that I could return. I was in danger of becoming a quadriplegic due to complications. I needed treatment. I didn't need to be followed, filmed, photographed, watched at home by investigators since 1996. This is costly. The increasing costs to the State of Alaska Medical Assistance Program is the result of the injured workers losing benefits...Once an injured worker is controverted, and a serious medical condition persists, there are not many avenues the worker can take to adjudicate those claims when savings and accrued (indisc.) dwindle away. To cover medical costs, a complex claim poses difficulty in securing representation from a lawyer or finding a doctor that wants to get involved in possible depositions and appearing in court...A large portion of injured workers apply for or receive Alaska Temporary Assistance, Alaska State Medical Program Benefits, which is Medicaid, and federal food stamp funds. Eligibility for an incapacitated person is determined by a community [physician] and reported on a State form. To receive Medicaid, an injured worker declares a third party liability, which is the insurance company, and agrees that the State can assess a lien. The lien is placed upon any settlement monies the worker receives unless a settlement, a compromise release, or a decision and order is made that they collect reimbursement from the assumed medical costs from the injured workers compensation. This award is for lost earnings that pays back medical costs to the State. The insurance company is also hit up for medical costs. In my case, I refused to settle past issues of compensation until the insurance company agreed to repay medical. They did not feel they had any liability for medical costs during the controversion. The State of Alaska Medical Assistance Program receives reimbursement by liens and awards. The funding of ATAP [Alaska Temporary Assistance Program] or welfare to eligible injured workers needs to be reimbursed by the insurance carriers if, based on merits of all medical evidence, (indisc.) evidence, or a compromised release agreement, or whatever it takes, which reopens weekly medical compensation. It is foreseeable, if the insurance companies were held accountable to the State for incurred related expenditures resulting from an industrial injury, it would generate revenue for reimbursement and it would benefit the State of Alaska. There is a tremendous amount of State welfare funds paid to injured workers during the controversion of workers' comp[ensation] benefits. In my case, the insurance company agreed to repay the State of Alaska Medical Program or Medicaid. What about the ATAP funds the State paid for the injured worker? What about the federal food stamp benefits? In my case, my family received Alaska Temporary Assistance in the rough amount of $1,100 in allowances. This was paid for 25 months while medical disputes were determined. There's a multitude of revenue the State truly has a right to reimbursement for. Had it not been for the controversion, the basis of the worker going on welfare, there would have been no cost to the State. Once a claim is found to be bonafide, reimbursement should be made. In my case alone, ATAP equaled almost $27,000...The State should be reimbursed for supporting an injured worker who is controverted if it is found that the continued disability is a result of the work injury...The practices the adjusters have implemented are sometimes unfair. Under the terms of the act, an injured worker can deteriorate and be one day from death and still be considered or deemed medically stable. In my case, after the second surgery, which, by the way, was a revision of a cervical fusion that was performed after my injury; the surgery was on the twenty-first of November '98. I followed up with my neurosurgeon. I had to be flown to Seattle and was treated at Harborview Medical Center. And I followed up with my neurosurgeon the fourteenth of February and again on the fifth of August 1999. I was seen twice a month here in recovery by my attending and treating physician in Eagle River. Did the adjuster seek my treating doctor's opinion of medical stability? No. By her own account, she made almost ten contacts to my surgeon who I hadn't been examined by in over 90 days to get the medical stability to clear. My condition continues to deteriorate. There is medical evidence supporting this that isn't subjective, but objective in nature. I suffer from extensive nerve damage as a result of the severity of my injury, complications from the surgery, and my belated treatment due to the controversion. I cannot return to work. I have been (indisc.) for rehab[ilitation] reemployment benefits, but I cannot participate in a retraining program due to my medical condition. Am I receiving compensation from worker comp[ensation] insurance company with all the causal connection to my work relatedness? No. And I'm a pen stroke away from the welfare roll again. Me and many other injured workers in Alaska need legislative support in dealing with the worker comp[ensation] carriers...There are a lot of unnecessary harassments, comments that are made by adjusters towards injured workers. That needs to be dealt with. Our Alaskan representatives are in a position to attempt to balance the (indisc.) shortcomings of the act currently posed. This practice of unfair and frivolous controversion needs to hold serious penalties for those who engage in it. And the defining factor that determines what is unfair and frivolous needs to be addressed. I believe legislative intent was not to be construed to allow injured workers to be dumped onto the welfare roll. The State interest in the medical assistance program should be protected and temporary assistance reimbursement needs to be pursued. Insurance companies should not be allowed to go doctor shopping. (indisc.) and the opinion which results should be taken into account, but they should never be the basis of terminating any benefits when there is a medical dispute...HB 419 falls short in protecting us as injured workers of Alaska. Number 0672 JOEL SIGMOND testified via teleconference from Anchorage. He explained that he used to make between $4,000 and $5,000 per month. He was cut down to $800 per month. He said he is unable to obtain food stamps and cannot receive medical insurance for his family because he owns too much. He said he thinks the insurance company should also have to cover an employee's family expenses if they become ill. He commented that he is about to lose his home. He also stated that he lost $1,200 per month on unemployment that he should be reimbursed since he was unable to receive due to a work-related injury. He indicated that his insurance companies refuses his doctors and he is unable to receive the medical treatment and medication he needs. Number 0858 GERALDINE BODEMAN testified via teleconference from Anchorage. She is an injured worker who has not been able to resolve her claim since 1996 because the system is complicated and hard to understand. She said if it had not been for the pre-service she received from the Alaska Injured Workers Alliance, she would not have any meaningful way to proceed her claim. She asked the committee to please review the recommendations made by Legislative Budget and Audit in order to make the process more fair and better for injured workers. She explained that better education programs and information for workers is necessary. She said that legal access and enforcement of laws is essential to make the process fair and accessible to all parties. She said there are no worker attorneys available. She urged the committee to help protect workers' rights. Number 0960 MARJORIE LINDER testified via teleconference from Anchorage. She is a vocational rehabilitation counselor in the workers' compensation system. She stated: I served on the WCCA [Workers' Compensation Committee of Alaska] in 1988 and I helped draft the section [AS 23.30.]041 that became part of the current law. Because of this, I offer a unique perspective. I know that I have good intentions with these law changes, but, like Frankenstein, I helped to create a monster. In 1988, there was a perception that the law was unbalanced in favor of injured workers. Premiums went undenied...employers have enjoyed a reduction in premiums of 41.5 percent according to the recent legislative audit. Unfortunately, injured workers have paid the price. Today only 300, out of 28,000 workers injured each year, qualify for the reemployment benefits. Both a laborer and an office worker receive as little as $9,450 for a herniated disk despite the disparate ways their injury affects them. The reemployment benefits attempt to assist the laborer to learn to earn a living again because he, unlike the office worker, can't return to his job. Workers with no ratable impairment are ineligible for retraining. This affects office workers, cannery workers and others with repetitive stress injuries to their forearms, for instance. Instead of curing such problems with the present act, section 7 (r) of HB 419 seeks to further restrict access to retraining for injured workers. It allows workers to forfeit their reemployment benefits before, and if, they know whether they will need them and before they know how much they are worth to them. Once they have signed in the dotted line, they cannot retract if they find they are unable to return to work or continue to work because of their injury. And with no legal advice or explanation from anyone other than their claims adjuster, workers who don't typically read what they sign, who can't speak English, who are functionally illiterate, who are on pain pills, will sign these affidavits as a matter of course, that they're just papers sandwiched between the others. Section 7(r)'s irrevocability will invite numerous legal challenges to be sure. Like the Miranda warning has done, this waiver will tie up the legal system for years to come. This litigation will cost the State of Alaska money. Workers with no way to earn a living will lose their homes, their savings, and their buying power. You've heard about that today. That will hurt, not help Alaskan businesses. Section 7(r) of this law is a veiled attempt by the insurance industries to get the State to supplement the benefits for which they collect premiums. Injured workers not adequately served by the comp[ensation] system will be forced to obtain financial support for themselves and retraining by the Division of Public Assistance and DVR [Division of Vocational Rehabilitation]. That will cost the State of Alaska money. As time passes and their resources decrease, injured workers who are able, will accept inappropriate employment and put themselves, their co-workers, and their new employer at risk. All of them and all of us will suffer. Therefore, I urge you to remove section 7(r) from HB 419 to protect the people of Alaska and the state budget. One life is a precious thing to waste. Number 1198 MURIEL BOWLES testified via teleconference from Anchorage. She stated: In the short time that I have been in the workers' compensation system, I have felt uninformed totally. There are few educational programs for workers to help us understand our rights and benefits. We need better access to information and legal help. You need to make sure that all persons have medical treatment and benefits. Agencies such as [Division of] Workers' Compensation and [the] Division of Insurance must protect all workers, some self-insured as well as privately insured. People with self-insured employers have no consumer protection measured at all. It is even harder for us to secure benefits and medical treatment because no one sees that our employers act (indisc.). Without such oversight, we have less of a chance to get those benefits. We need strict enforcement that keeps pace with inflation and other variables to ensure fairness to everyone involved. We need to be able to support ourselves and our families and return to work quickly...I stress that we, the injured workers and families of such, need to be given a fair chance here and I don't see this bill helping us, yet, it will profit the employer and their insurance company at our expense. I strongly suggest that you will take the time and consider incorporate the findings of the audit before moving any further ahead with this bill. Also, my case was controverted with a statement referring to a car accident my son and I had been in after my employer had let me go. I need to make a note here because they weren't even taking care of my bills prior to the accident and no one asked for any details about the accident either. They just declined payment for my surgery. We were merely bumped while sitting at a red light and I'd been diagnosed with carpal tunnel, but they controverted my case because I was in a car accident. Number 1364 HARRY BLANAL testified via teleconference from Anchorage. He said he objects to HB 419. He noted that HB 419 infringes on Article 7 of the Alaska State Constitution. He urged the committee to reject HB 419. Number 1810 BARBARA SUE ROTH came forward to testify on HB 419, Version. She has been providing vocational rehabilitation services in Alaska since 1983. She said she would like to speak specifically on the waiving of reemployment. She is in favor of waiving reemployment. She stated she has worked with too many injured workers that really did not want reemployment benefits. They participated half-heartedly in the process to perhaps increase the amount that they would receive. She has worked in a voluntary system in six other states and has found that people who want these services do receive them. She said, "It makes people come up with a plan and they participate and everyone is more happy." CHAIRMAN ROKEBERG said he thinks she is referring to section 7(r). MS. ROTH replied that is correct. CHAIRMAN ROKEBERG asked if Ms. Roth to provide an example of why the waiving of benefits is a positive thing. MS. ROTH explained: I had someone that I met with and they said they did not want reemployment benefits. They were going to waive them. This is something that happened in the past. CHAIRMAN ROKEBERG interjected and asked, "Why would they do that?" MS. ROTH replied: He said that he could get his own job. That he was perfectly capable of getting his own job, he was relocating, his wife worked, that he was not concerned. So, he waived his benefits and then he moved. Right after he moved, he called me two weeks later and said --oh, and they gave his permanent impairment money -- he moved, he received that. CHAIRMAN ROKEBERG asked if the permanent impairment payment is received in a lump sum. MS. ROTH said yes. She further stated: He received that. Two weeks later he called and he wanted to participate in reemployment benefits. So, I called the insurer and they reinstated his right to participate in this. The minute I started asking him to participate in going for vocational testing, he didn't show and things like. It turned out then they did settle with the insurance company for an additional amount of money and he did not participate in it. That's just what has happened in the past. I have many people that they would rather get their lump sum and use it as they want in their family, maybe to pay bills and take care of their own rehab[ilitation]. There's many, many injured workers. I know there are some that can't and that's why there's the service, but there's many that are able to find their own jobs. All they may need is some job development which is not a part of the act. If it was, it'd be different...When you get reemployment benefits, you get training, and a lot of people, they don't want more training. A lot of them don't think they'll benefit. A lot of them have many different reasons for not wanting the training. All they need is help finding a job, maybe a new resume, maybe some job-seeking skills. And we have these wonderful one-stop centers that are being implemented in the State of Alaska that provide those services for free. I do not think providing them to additional people, the job development and the job placement and resume, those seminars are regular. The size of the class does not increase the cost for the State. So, many workers, that's all they need. They don't really want or need training. But once you have them, you have to provide some type of training, you can't just offer that service. Number 2066 CHAIRMAN ROKEBERG asked, "So, someone would go into business rather than training if they thought they had the ability or talent...do you have an example of that then?" MS. ROTH answered that many do go into business. She said she has written reemployment for self-employment, but has only done three in 16 years. CHAIRMAN ROKEBERG asked if a person could get some training. MS. ROTH commented that a person could be sent to small business classes. Many of these type of classes can taken through the Small Business Association. CHAIRMAN ROKEBERG wondered if a person could receive reimbursement for doing that. MS. ROTH indicated that is a possibility. Number 2138 THOMAS SMITH testified via teleconference from Anchorage. He stated: I am injured worker. I currently have two injuries. One's a back injury and one is a foot injury. I'm currently collecting benefits from an insurance company for worker's comp[ensation] benefits. I was injured over a year and a half ago after working 10 years for the same employer. It became apparent I was not going to be able to work anymore doing the physical labor my back and foot injuries precluded me from doing. I became more reliant on the workers' comp[ensation] system to help me as the statutes provide. I've also been a resident of Anchorage since 1957, some 43 years. The reason I bring this up is because most of the details about the unfairness of this act are going to come out if they already haven't, but I want to address maybe kind of like the feelings that people have about this in general, if I may. Like I said, I've been a resident of Anchorage since 1957. That's some 43 years. My father and mother brought me up here when I was just four years old from Seattle. I met many of the characters that spice up the nature of this state. My father was a friend to many of these men and women, legislators, governors, senators. From these historical figures, I apply many of my values. At one point in my life, I actually sat down to lunch with Senator Gruening and Senator Bartlett while I was a child at a convention in Washington D.C. It was quite a thrill. I say this because as I read HB 419 and I understand it, I wonder what some of these great men would say about HB 419 as its written today. I wonder what they would say about Section 7, AS 23.30.041, stating that "notwithstanding an employee may waive, at any time, any benefits or rights under this section of his rehabilitation benefits". Now, why is that necessary? And why would anybody use this kind of language for something that we have the right to already? I wonder what these great men would say about a system so lopsided in favor of insurance companies that the distinguished bodies of the State of Alaska Legislature would be reduced to writing words that can only be considered unfriendly and difficult. I wonder what happened to that sense of fairness and justice my father encountered as a new resident to Alaska in 1957. CHAIRMAN ROKEBERG interjected and said, "In regards to section 7 of the bill it says 'may'." He said he is not sure he understands Mr. Smith's point on that. MR. SMITH apologized and said he is probably not speaking as clearly as he would like to. CHAIRMAN ROKEBERG commented that it could be the drafting manual. He pointed out that the laws that are written in Alaska are not as clear as they should be to the average person. MR. SMITH referred to section 7 which states that an employee "may waive" any benefits or rights. He said: But that's always been our rights. Why would they include something like that and make it sound like they're doing us a big favor or something? Like, if we don't waive these rights, something terrible is going to happen. Like we're going to be forced to be retrained or something. That is confusing to me and, although, I have a pretty good education, reading these bills...I'm a little bit challenged. TAPE 00-32, SIDE A Number 0038 ROBERT SULLIVAN testified via teleconference from Anchorage. He stated: I'm a vocational rehabilitation counselor. I've been in the field of vocational rehabilitation counseling for 19 years. I've worked in two different states under about four different laws. I've also worked some with the CHIA (ph) program early on. I also do work for social security administration as a vocational expert. I got into the field when vocational rehabilitation laws had just started. Prior to that, there wasn't anything in the law for it and we still received referrals from insurance companies because they wanted to get them back to work because they were eating up their medical bill. So, we don't need a law to get rehab[ilitation]... ...The two major problems I see with HB 419 are in section 7(r). This section opens the door for insurance companies and employers to apply pressure to the injured workers and employees to waive their rehabilitation benefits before they have a clear idea of whether or not they will need it. It says "may" and they have the choice, but I see it opens the door to pressure. The waiver, once signed and transmitted, it's irrevocable. That is, it can't be modified the way other things can be modified which means that if they finally need it later, they can't go to the Board and get it modified and get it at a later date. The way the statute works now, people aren't referred for ineligibility evaluation until they get close to medical stability, they're nearing the end of their treatment, they have a little bit more knowledge of what their vocational needs might be or whether they're going to have any or not. This would eliminate that if it's utilized early on in the claim. If it is utilized, then this is going to lead to some problems. Injured workers who cannot return to their usual employment will be subject to returning to work in unskilled, low-paying jobs, returning to their usual employment in a hurt condition. And you have the rest of it, except for one thing I added to this. Number 6, an injured who has waived his benefits and discovered later that he cannot return to his employment at the time of injury, may end up being considered permanently and totally disabled because he has no means to obtain the skills to return to work through the statute. Number 0337 CHAIRMAN ROKEBERG indicated he did not entirely understand Mr. Sullivan's point with respect to number 6. MR. SULLIVAN clarified: You have the injured worker who waives his benefit early before he knows he needs it. They don't think he's going to need surgery, it comes up that he needs surgery, he gets a poor result, he's gone on his medical now for four or five years and he's finally got an attorney, and the attorney's saying, "Okay, I think my guy is permanently and totally disabled because he cannot return to work in his usual and customary employment." If he has no access to obtaining other skills that would make him employable in the labor market because he's already waived them and its irrevocable, then wouldn't he be declared permanently and totally disabled? I'm sure that's going to come up. Number 0437 MIKE JENSEN, Workers' Compensation Attorney, testified via teleconference from Anchorage. He has been in practice for 15 years and exclusively represents injured workers in the State Workers' Compensation system. He explained that numerous hearings were held for the past two years with staff from the Governor's Office and members of the Alaska Workers' Compensation Board. At these hearings, many injured workers testified and related to the Governor and the Board their personal stories of neglect, nonpayment of benefits, invasion of privacy, loss of dignity and other complaints. He stated: I'd had hoped that after listening to these stories from all these workers and their families, that legislation would have been offered to address their concerns. These workers did not come to the Governor or the Board with a tin cup hoping for a handout. They simply wanted changes to the act which would address their concerns. Regrettably, this proposed legislation does not do this, but it is a step in the right direction. I do not want to condemn this effort. I simply wish to suggest ways to improve it to meet just some of the concerns expressed by these workers. In a most recent legislative audit [Page 19, Legislative Audit Report, October 1999] which found that circumstances have developed...that limit the protection the legislature meant to be in place and strictly enforce to the benefit of workers. Such circumstances, that we believe are an unintended byproduct of the 1988 amendment, have resulted in a situation where more consideration is provided to employers and insurance companies than to the injured workers...I want to personally thank the Ad Hoc Committee and the Division of Workers' Compensation for their efforts on behalf of workers who have not seen an increase in benefits for almost 12 years. The labor members of the committee were able to take a step in the direction as far as increasing temporary, permanent and death benefits. Regrettably, what insurers are asking workers to give up in exchange for these amendments needs to be addressed. I want to address only several sections which this proposed legislation seeks to amend, namely [AS 23.30.]041(c) and section [AS 23.30.]107. Although the legislative audit found that page 35 from our review it appears the statute has succeeded in limiting access to reemployment benefits. This proposed legislation would find another way of totally removing access to reemployment benefits. The proposed amendment to [AS 23.30.]041(c) proposes another way for workers to lose access. They will be asked to do this without any guarantee that that such waiver is: 1. informed and 2. made only with an appreciation of the seriousness of the disability. Workers need to have an appreciation of the seriousness of their injury before any waiver should be allowed. The Board currently approves waivers if in the best interest of the worker. This should remain unchanged. In addition, I have concerns about section [AS 23.30.] 107. This act is very complicated as you've heard today. The workers are frustrated with the complexity of the system, regulations and associated time line which the audit noted at page 23. This act, instead, would propose to add additional timeliness, making the system even more complex. Number 0717 K. SCOTT MCENTIRE, President, Alaska Injured Workers Alliance, testified via teleconference from Anchorage. He commented: I myself am an injured worker since 1992. I'm a life-long Alaskan. I was born in Fairbanks. The Workers' Compensation Act is an act that I had to educate myself about and, in turn, am educating other injured workers. The Workers' Compensation Division has had its budget cut, its staff reduced, they've lost most of their experienced hearing officers, and it is virtually impossible to get accurate information from the Division. When an injured worker goes in there, they are disabled, they are on medications, they're totally confused, and this system just eats them up. The Alaska Injured Workers Alliance has spoken to the Governor about having representation on new legislation. We asked to be put on the ad hoc committee and we were not. The Workers' Compensation Act is supposed to be a prescriptive remedy to promote the promptness and the efficiency of it. However, the act itself, has more procedural bars to disadvantage injured workers so that they are denied benefits under the act. This legislation, in conjunction with other legislation right now, is a further extension of that. The ERISA Act, the Employee Retirement Income and Security Act exempts workers' compensation...insurance that employers have when they self-insure, if it's solely for workers' compensation. California recently passed legislation to make sure that the employers were self-insuring solely for workers' compensation so that they could remain governed by the state agencies such as the Division of Insurance. We now have legislation promoting group self-insurance that the director of the Division of Insurance, using the existing regulations, has virtually no power to enforce, they do not enforce any insurance regulations right now against self-insured employers, this is just further extending it to smaller group insurance plans. The wage rates are still an argument as to what constitutes a wage, what should be counted for compensation, whether health and welfare, pension plans, what vesting means, whether accrued leave, overtime at premium pay, or shift differential should be included. This legislation doesn't address any of those. The notion of going to a fee-funded service and then basing it on a percentage of the annual reports filed under AS 23.30.155(m)or (n) do not reflect that the Division gets, (indisc.) at its annual meeting last year, passed a regulation granting greater leniency in the accuracy of those because the Division itself creates more errors internally than the insurance companies filing those reports. So, those reports are not accurate and should not be used a basis for any percentage of payment of fees. CHAIRMAN ROKEBERG suggested that Mr. McEntire peruse Version G of HB 419. He said Version G does provide for the counting of overtime and premium wages. MR. MCENTIRE replied that it does not include accrued leave. He commented, "If you're working for an employer who you accrue leave time based on, for instance, 3.2 hours per pay period, that is a benefit. That is another reason why you're working for that employer and those are not included." CHAIRMAN ROKEBERG answered, "Well, that's right because we don't want the premiums go to Mars." MR. MCENTIRE said he does not think it has been demonstrated that they would go to Mars. CHAIRMAN ROKEBERG indicated that HB 419 would be held in committee.
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