Legislature(2015 - 2016)BILL RAY CENTER 208

06/03/2016 11:00 AM LABOR & COMMERCE

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Audio Topic
11:02:41 AM Start
11:02:55 AM HB4002
11:57:05 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Time Change --
Heard & Held
-- Testimony <Invitation Only> --
**Streamed live on AKL.tv**
        HB4002-INS. FOR DEPENDS. OF DECEASED FIRE/POLICE                                                                    
11:02:55 AM                                                                                                                   
CHAIR OLSON  announced that the  only order of business  would be                                                               
HOUSE BILL NO. 4002, "An  Act relating to major medical insurance                                                               
coverage under the Public Employees'  Retirement System of Alaska                                                               
for  certain surviving  spouses and  dependent children  of peace                                                               
officers and firefighters; and providing for an effective date."                                                                
11:04:04 AM                                                                                                                   
KATE  SHEEHAN,   Director,  Division   of  Personnel   and  Labor                                                               
Relations, Department of Administration,  said she was present to                                                               
answer questions.                                                                                                               
CHAIR  OLSON  asked  whether  Ms. Sheehan  was  involved  in  the                                                               
drafting of the bill.                                                                                                           
MS. SHEEHAN said no.                                                                                                            
11:04:54 AM                                                                                                                   
MICHELE MICHAUD,  Chief Health  Official, Division  of Retirement                                                               
and   Benefits,  Department   of  Administration,   informed  the                                                               
committee the  bill was  drafted primarily  by the  Department of                                                               
Law, and she was involved as  well.  In further response to Chair                                                               
Olson, she  said due  to time  constraints, the  drafters limited                                                               
the options of the bill to the pension plan.                                                                                    
CHAIR  OLSON noted  that the  National  Association of  Insurance                                                               
Commissioners provided a summary of  what other states have done;                                                               
he  expressed his  and others'  concern about  the amount  of the                                                               
fiscal note, and  questioned what other options  "had been looked                                                               
at and maybe not accepted for one reason or another ...."                                                                       
MS.  SHEEHAN   directed  attention  to  a   written  response  to                                                               
questions  from DOA,  dated 9/14/15,  which was  provided in  the                                                               
committee  packet.   The response  indicated  that DOA  bargained                                                               
some additional  benefits into collective  bargaining agreements,                                                               
including life  insurance and travel accident  insurance, in 2013                                                               
and 2014.                                                                                                                       
CHAIR  OLSON said  one aspect  was to  increase the  cap on  life                                                               
MS.  MICHAUD said  yes.   The previous  cap was  $48,000 and  now                                                               
there are  options for  life insurance  coverage up  to $300,000.                                                               
In further response to Chair  Olson, she said state employees can                                                               
also elect  up to $300,000, and  the new cap was  first available                                                               
during open enrollment in 2015.                                                                                                 
REPRESENTATIVE CHENAULT asked whether  life insurance is elective                                                               
or mandatory.                                                                                                                   
MS. MICHAUD  stated that  life insurance  is a  voluntary benefit                                                               
available  to purchase  during open  enrollment, or  when one  is                                                               
first employed.                                                                                                                 
REPRESENTATIVE  CHENAULT   asked  whether  travel   and  accident                                                               
insurance are  negotiated into the  contract, or are  options for                                                               
members to elect.                                                                                                               
11:09:54 AM                                                                                                                   
MS.  SHEEHAN responded  that the  aforementioned are  negotiated,                                                               
and  do  not  have  to  be  elected.    In  further  response  to                                                               
Representative  Chenault,  she  said   the  travel  and  accident                                                               
insurance is  paid to a  member in  travel status in  addition to                                                               
what may be settled, for example, with an airline carrier.                                                                      
CHAIR  OLSON offered  that  a settlement  from  an airline  would                                                               
reimburse  workers' compensation.    The  Division of  Insurance,                                                               
Department of  Commerce, Community  & Economic  Development, will                                                               
provide further testimony regarding insurance coverage.                                                                         
REPRESENTATIVE  JOSEPHSON  understood  that  the  life  insurance                                                               
premium is paid by the employee.                                                                                                
MS. MICHAUD explained that are two  types of life insurance:  the                                                               
basic policy is covered by the  employer, and an employee has the                                                               
option of  adding coverage up  to their annual  salary, including                                                               
the travel/accident.   In addition, there  are voluntary benefits                                                               
elected during open  enrollment, which are paid by  the member as                                                               
a  pretax contribution.   In  further response  to Representative                                                               
Josephson, she clarified that the  voluntary benefits include the                                                               
policy up to $300,000.                                                                                                          
REPRESENTATIVE KITO  surmised that  the bargaining  agreements do                                                               
not  contain survivor  benefits  for health  care premiums,  thus                                                               
resolving this issue is the purpose of HB 4002.                                                                                 
MS. SHEEHAN said correct.                                                                                                       
CHAIR  OLSON asked  about coverage  for children  if there  is no                                                               
surviving spouse.                                                                                                               
MS.  MICHAUD  advised  that  currently,   if  a  member  dies  an                                                               
occupational death and there is  no surviving spouse, a dependent                                                               
child is not entitled to medical benefits.                                                                                      
REPRESENTATIVE  KITO pointed  out  the Department  of Health  and                                                               
Social Services has  not commented on whether  the children would                                                               
become wards of a foster parent,  of the state, or of a relative,                                                               
and thereby may be eligible for insurance under guardianships.                                                                  
11:14:36 AM                                                                                                                   
REPRESENTATIVE JOSEPHSON  asked whether the bill  covers a member                                                               
working in an office who dies of natural causes.                                                                                
MS. MICHAUD  said there  are some  limits to  voluntary benefits,                                                               
such  as suicide,  but  for  the most  part  there  is a  payable                                                               
benefit in the event of a death.                                                                                                
REPRESENTATIVE JOSEPHSON asked what  percent of members apply for                                                               
voluntary benefits, and whether members are encouraged to apply.                                                                
MS. MICHAUD was unsure.                                                                                                         
CHAIR OLSON requested DRB provide a response by [6/6/16].                                                                       
REPRESENTATIVE JOSEPHSON posited a case  of a trooper who did not                                                               
elect  a  higher benefit  and  suffered  a tragedy,  and  his/her                                                               
dependents received the mandatory,  automatic benefits of $60,000                                                               
to  $100,000.   He asked  if there  are other  benefits that  the                                                               
dependents would receive.                                                                                                       
MS.  MICHAUD  explained  that  without  electing  the  option  of                                                               
voluntary benefits,  the dependents  would receive the  basic and                                                               
travel and accident  insurance, as well as unpaid  leave, and any                                                               
occupational death benefits to which they are entitled.                                                                         
REPRESENTATIVE  COLVER asked  what  amount workers'  compensation                                                               
would pay on an occupational injury.                                                                                            
MS. MICHAUD was unsure.                                                                                                         
CHAIR OLSON  said he thought "70  percent," if there is  a spouse                                                               
and children.                                                                                                                   
11:18:32 AM                                                                                                                   
REPRESENTATIVE  JOSEPHSON  suggested   that  the  committee  hear                                                               
testimony  in   this  regard  from   the  Division   of  Workers'                                                               
Compensation, Department of Labor & Workforce Development.                                                                      
11:19:15 AM                                                                                                                   
There  followed general  discussion regarding  the substance  and                                                               
hearing schedule of the bill.                                                                                                   
11:19:54 AM                                                                                                                   
REPRESENTATIVE  LEDOUX referred  to an  untitled document  in the                                                               
committee  packet  provided  by   DOA  and  dated  6/1/16,  which                                                               
indicated there  were more Department of  Transportation & Public                                                               
Facilities (DOTPF) deaths  than state trooper deaths.   She asked                                                               
for the  percentages instead,  noting that  there are  more DOTPF                                                               
MS.  SHEEHAN  said  DOTPF  has  3,000  employees  and  there  are                                                               
approximately  300  state  troopers.    In  further  response  to                                                               
Representative  LeDoux,   she  agreed  that  the   percentage  of                                                               
troopers who  are lost in the  line of duty is  probably greater,                                                               
and said she would provide the requested percentages.                                                                           
CHAIR  OLSON   observed  that  there  are   eight  agencies  with                                                               
REPRESENTATIVE  COLVER suggested  creating a  pool of  designated                                                               
funds  to  pay health  and  life  insurance policies  for  "risky                                                               
CHAIR  OLSON  agreed that  if  most  state employees  voluntarily                                                               
participate in that type of program, premiums could go down.                                                                    
[There followed discussion related  to designated funding and the                                                               
fiscal information necessary to review the bill.]                                                                               
11:26:18 AM                                                                                                                   
REPRESENTATIVE COLVER suggested  a levy of $0.02 per  hour to pay                                                               
for  a  benefit package  that  could  include life  insurance  to                                                               
insure "all of  these families," not as an  elective benefit, but                                                               
to cover on-the-job injuries.                                                                                                   
CHAIR OLSON stated his intention  is for the proposed legislation                                                               
to do  as much as possible  with the money that  is available, so                                                               
the bill can proceed through two finance committees.                                                                            
REPRESENTATIVE  JOSEPHSON expressed  his interest  in working  on                                                               
all of  the foregoing issues;  however, the governor's  call [for                                                               
the  fourth  special session  of  the  Twenty-Ninth Alaska  State                                                               
Legislature, HB  4002] is  restricted to  specific circumstances,                                                               
and has a reasonable fiscal  note attached.  He suggested working                                                               
on the other broader tasks during interim.                                                                                      
CHAIR OLSON  questioned the demand  for a broader scope  from the                                                               
REPRESENTATIVE LEDOUX  relayed her preference is  to proceed with                                                               
[HB  4002] which  is a  simple bill  to take  care of  a specific                                                               
group  of  people,  with  a  small fiscal  note  attached.    She                                                               
suggested that  the committee  deal with HB  4002 and  the issues                                                               
included in  the governor's  call, and then  continue to  work on                                                               
the more complex problems next session.                                                                                         
CHAIR OLSON opined there is time to address these issues now.                                                                   
11:31:24 AM                                                                                                                   
JAKE  METCALFE,  Executive   Director,  Public  Safety  Employees                                                               
Association,  Inc.  (PSEA),  Local  803,  stated  that  from  the                                                               
perspective of PSEA, HB 4002  provides major medical insurance to                                                               
survivors, including  the spouse  and children of  peace officers                                                               
and firefighters killed  in the line of duty.   The effect of the                                                               
bill is limited to peace  officers and firefighters because these                                                               
employees  must   serve  in   dangerous  situations,   and  other                                                               
employees do not have to risk  their health and safety.  Further,                                                               
the beneficiaries of  the bill only receive benefits  if a spouse                                                               
or  parent dies  in  the line  of duty.    Fourteen other  states                                                               
provide  this benefit  to police  officers and  firefighters, and                                                               
the  U.S.  military  provides this  and  additional  coverage  to                                                               
officers killed  in the line of  duty.  Mr. Metcalf  said HB 4002                                                               
has overwhelming  support statewide from political  and community                                                               
leaders;  in  fact,  the  fiscal  note  of  the  bill  should  be                                                               
indeterminate because  benefits have been provided  to "the three                                                               
families that are, are at  issue here," and future situations are                                                               
unknown.    Furthermore,  HB  4002 is  not  an  equal  protection                                                               
problem,  since  none  of  the  other  states  providing  similar                                                               
coverage  have  been  sued,  and   research  indicates  that  the                                                               
legislation  is   a  legally   justified  benefit.   Mr.  Metcalf                                                               
concluded that the  benefit provided is limited  to major medical                                                               
coverage  to  a   spouse  and  survivors  of   a  peace  officer,                                                               
firefighter,  or police  officer killed  in the  line of  duty in                                                               
Alaska  - which  the  state should  provide -  and  he urged  for                                                               
passage of the bill.                                                                                                            
11:37:07 AM                                                                                                                   
CHAIR  OLSON  asked what  life  insurance  benefits are  provided                                                               
under PSEA's current contract.                                                                                                  
MR. METCALF said  there is a life insurance  benefit of $200,000,                                                               
which is an increase from a prior contract.  He remarked:                                                                       
     The  Toll family,  the,  the Rich  family,  or the  ...                                                                    
     Scott  Johnson family,  they got  the $100,000  benefit                                                                    
     because  they died  before the  new contract  went into                                                                    
REPRESENTATIVE CHENAULT  asked whether employees have  to pay for                                                               
the $200,000 life insurance policy.                                                                                             
MR. METCALF said  no.  During negotiations, the  state offered to                                                               
increase life insurance from $100,000 to $200,000.                                                                              
REPRESENTATIVE  CHENAULT  questioned  if in  the  other  fourteen                                                               
states,  health care  coverage for  dependents of  slain officers                                                               
was effected by legislation, or negotiated in contracts.                                                                        
MR. METCALF advised  there were various methods, but  all were by                                                               
statute.  In Michigan, legislation  was passed with a zero fiscal                                                               
note; in Minnesota, the benefit  garnered "no cost, it was passed                                                               
by statute," and the most recent  state was Utah in 2015, with an                                                               
indeterminate  or  zero  fiscal  note.   He  offered  to  provide                                                               
further research.                                                                                                               
REPRESENTATIVE  KITO surmised  that  the bill  covers all  police                                                               
officers and firefighters  in the state who are  members of PERS;                                                               
contract  negotiations would  cover  those  employees within  the                                                               
state bargaining units,  such as troopers, or  within a municipal                                                               
bargaining unit for  police officers.  Thus,  the bill guarantees                                                               
that a  [qualified] employee in  the PERS system, at  a municipal                                                               
or state  level, would receive  a health benefit  without further                                                               
negotiation,  with  the  exception   of  Village  Public  Service                                                               
Officers (VPSOs).                                                                                                               
MR.  METCALF   agreed,  and  pointed   out  that   although  PSEA                                                               
represents municipal police departments,  as well as state police                                                               
officers, some  municipalities are not represented  by collective                                                               
bargaining, and the bill extends the benefit to members of PERS.                                                                
CHAIR OLSON  asked whether the  City of Kenai was  represented by                                                               
MR.  METCALF  said no.    In  further  response to  Chair  Olson,                                                               
related  to an  incident  in the  past, he  said  the bill  would                                                               
provide for others affected in a similar manner.                                                                                
11:44:25 AM                                                                                                                   
SHAUN  KUZAKIN, Alaska  State Trooper,  Division of  Alaska State                                                               
Troopers,  DPS,  and  Southeast  vice  president,  Public  Safety                                                               
Employees Association  (PSEA), informed the committee  that VPSOs                                                               
are not  state employees,  but are trained  at the  Department of                                                               
Public Safety Training Academy.   Mr. Kazukin said that VPSOs are                                                               
employed by regional corporations.                                                                                              
CHAIR OLSON said he was told  that VPSOs in Barrow are covered by                                                               
MR. KUZAKIN  deferred the question to  DPS.  He added  that VPSOs                                                               
are not  certified by the  Alaska Police Standards  Council, DPS,                                                               
as all other  peace officers are and  do not have a  badge.  Some                                                               
are armed by authorizations through regional corporations.                                                                      
REPRESENTATIVE JOSEPHSON  clarified that  Point Hope has  its own                                                               
highly-trained  police force  whose  members work  for the  North                                                               
Slope  Borough  and  are  PERS  employees.    In  [NANA  Regional                                                               
Corporation  Inc.]  region,  there  are  troopers,  the  Kotzebue                                                               
Police Department, and  VPSOs.  He said he is  convinced that the                                                               
greater  issue  concerning  VPSOs  should  be  considered  during                                                               
REPRESENTATIVE  LEDOUX stated  that although  VPSOs would  not be                                                               
affected by  HB 4002,  there are  other VPSO  employment problems                                                               
that need attention.                                                                                                            
CHAIR OLSON  said he would not  disagree, and the issue  needs to                                                               
be addressed.                                                                                                                   
REPRESENTATIVE  LEDOUX  opined the  issue  does  not need  to  be                                                               
addressed "in the context of this bill."                                                                                        
11:48:00 AM                                                                                                                   
The committee took an at ease from 11:48 a.m. to 11:52 a.m.                                                                     
11:52:25 AM                                                                                                                   
BRAD  WILSON,  Business  Manager,  Alaska  Correctional  Officers                                                               
Association,  spoke  in  favor  of  the bill  on  behalf  of  all                                                               
correctional  officers.    Along  with all  police  officers,  at                                                               
certain   times  correctional   officers   deal  with   combative                                                               
individuals  and must  respond.   This is  a very  important bill                                                               
that will protect families by providing the insurance they need.                                                                
CHAIR  OLSON  asked  about accidental  death  benefits  that  are                                                               
provided through the collective bargaining process.                                                                             
MR.  WILSON  said  correctional officers  are  "consistent"  with                                                               
others regarding benefits.                                                                                                      
CHAIR OLSON  spoke on an  unrelated matter regarding  blood borne                                                               
There followed discussion regarding upcoming public testimony.                                                                  
11:56:42 AM                                                                                                                   
CHAIR OLSON announced HB 4002 was held over.                                                                                    

Document Name Date/Time Subjects
HB4002 Supporting Documents-Occupational Deaths, SOA and PoliSubs 06-01-16.pdf HL&C 6/3/2016 11:00:00 AM
HB4002 Supporting Documents-Assorted emails and letters 06-02-16.pdf HL&C 6/3/2016 11:00:00 AM