Legislature(1999 - 2000)
04/03/2000 01:45 PM House JUD
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE
April 3, 2000
1:45 p.m.
MEMBERS PRESENT
Representative Pete Kott, Chairman
Representative Joe Green
Representative Norman Rokeberg
Representative Jeannette James
Representative Lisa Murkowski
Representative Eric Croft
Representative Beth Kerttula
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
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."
- MOVED CSHB 419(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 58
"An Act relating to certain audits regarding oil and gas royalty
and net profits and to audits regarding costs relating to
exploration incentive credits and oil and gas exploration
licenses; and providing for an effective date."
- MOVED CSHB 58(JUD) OUT OF COMMITTEE
CS FOR SENATE BILL NO. 163(RLS)
"An Act relating to trusts, to a trustee's duties to notify and
inform beneficiaries, and to the revocation, modification,
termination, reformation, construction, and trustees of trusts."
- SCHEDULED BUT NOT HEARD
SENATE BILL NO. 268
"An Act relating to mandatory 99-year terms of imprisonment for
persons convicted of certain murders."
- SCHEDULED BUT NOT HEARD
HOUSE BILL NO. 324
"An Act requiring written consent by the person who is the
subject of the information before releasing personal information
contained in motor vehicle records, to comply with 18 U.S.C.
2721; and providing for an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS ACTION
BILL: HB 419
SHORT TITLE: WORKERS' COMPENSATION
Jrn-Date Jrn-Page Action
2/23/00 2279 (H) READ THE FIRST TIME - REFERRALS
2/23/00 2279 (H) L&C, JUD, FIN
3/08/00 (H) L&C AT 3:15 PM CAPITOL 17
3/08/00 (H) Heard & Held
3/08/00 (H) MINUTE(L&C)
3/17/00 (H) L&C AT 3:15 PM CAPITOL 17
3/17/00 (H) Heard & Held
3/17/00 (H) MINUTE(L&C)
3/20/00 (H) L&C AT 3:15 PM CAPITOL 17
3/20/00 (H) Heard & Held
3/20/00 (H) MINUTE(L&C)
3/27/00 (H) L&C AT 3:15 PM CAPITOL 17
3/27/00 (H) Moved CSHB 419(L&C) Out of Committee
3/27/00 (H) MINUTE(L&C)
3/29/00 2750 (H) L&C RPT CS(L&C) NT 1DP 5NR
3/29/00 2751 (H) DP: ROKEBERG; NR: MURKOWSKI, HARRIS,
3/29/00 2751 (H) CISSNA, SANDERS, HALCRO
3/29/00 2751 (H) 3 FNS (UA, LABOR, GOV/ALL DEPTS)
4/03/00 (H) JUD AT 1:30 PM CAPITOL 120
BILL: HB 58
SHORT TITLE: OIL & GAS AUDITS
Jrn-Date Jrn-Page Action
1/22/99 65 (H) READ THE FIRST TIME - REFERRAL(S)
1/22/99 65 (H) O&G, RES, FIN
1/22/99 65 (H) 2 FISCAL NOTES (DNR, REV)
1/22/99 65 (H) GOVERNOR'S TRANSMITTAL LETTER
3/04/99 (H) O&G AT 10:00 AM CAPITOL 17
3/04/99 (H) HEARD AND HELD
3/04/99 (H) MINUTE(O&G)
3/05/99 376 (H) JUD REFERRAL ADDED AFTER RES
3/11/99 (H) O&G AT 10:00 AM CAPITOL 17
3/11/99 (H) -- MEETING CANCELED --
4/20/99 (H) O&G AT 5:00 PM CAPITOL 17
4/20/99 (H) <BILL POSTPONED TO 4/29>>
4/22/99 (H) O&G AT 5:00 PM CAPITOL 17
4/22/99 (H) MOVED OUT OF COMMITTEE
4/22/99 (H) MINUTE(O&G)
4/23/99 943 (H) O&G RPT 4DP 4NR
4/23/99 944 (H) DP:PORTER, SMALLEY, HARRIS, WHITAKER;
4/23/99 944 (H) NR: OGAN, KEMPLEN, PHILLIPS, BRICE
4/23/99 944 (H) 2 FISCAL NOTES (DNR, REV) 1/22/99
3/06/00 (H) RES AT 1:00 PM CAPITOL 124
3/06/00 (H) Moved Out of Committee
3/06/00 (H) MINUTE(RES)
3/08/00 2444 (H) RES RPT 4DP 3NR
3/08/00 2445 (H) DP: COWDERY, WHITAKER, JOULE, MASEK;
3/08/00 2445 (H) NR: MORGAN, HARRIS, HUDSON
3/08/00 2445 (H) 2 FISCAL NOTES (DNR, REV)
3/08/00 2445 (H) REFERRED TO JUD
3/31/00 (H) JUD AT 1:15 PM CAPITOL 120
3/31/00 (H) Heard & Held
3/31/00 (H) MINUTE(JUD)
4/03/00 (H) JUD AT 1:30 PM CAPITOL 120
WITNESS REGISTER
PAUL GROSSI, Director
Division of Workers' Compensation
Department of Labor & Workforce Development
P.O. Box 25512
Juneau, Alaska 99802-5512
POSITION STATEMENT: Testified in support of CSHB 419(L&C) as
compromise legislation but requested more time to review Section
20 regarding religious treatment; answered questions.
WILLEM (WILLY) VAN HEMERT
1633 West 15th
Anchorage, Alaska 99501
POSITION STATEMENT: As co-chair representing management on the
ad hoc committee and on behalf of WCCA, testified in support of
CSHB 419(L&C) except for Section 20.
DON ETHERIDGE, Lobbyist for
AFL-CIO for Alaska
710 West 9th Street
Juneau, Alaska 99801
POSITION STATEMENT: Testified in support of HB 419 as it came
out of the ad hoc committee.
MARJORIE LINDER, Vocational Rehabilitation Counselor
P.O. Box 230029
Anchorage, Alaska 99523
POSITION STATEMENT: Testified on HB 419; expressed concerns.
MIKE JENSEN, Attorney at Law
12350 Industry Way, Number 208
Anchorage, Alaska 99515
POSITION STATEMENT: Testified on HB 419.
CAROL CARROLL, Director
Central Office
Division of Support Services
Department of Natural Resources
400 Willoughby Avenue, Fifth Floor
Juneau, Alaska 99801
POSITION STATEMENT: Explained HB 58 and the need for a technical
amendment.
ACTION NARRATIVE
TAPE 00-45, SIDE A
Number 0001
CHAIRMAN PETE KOTT called the House Judiciary Standing Committee
meeting to order at 1:45 p.m. Members present at the call to
order were Representatives Kott, Rokeberg, Murkowski and
Kerttula. Representatives Croft, Green and James arrived as the
meeting was in progress.
HB 419 - WORKERS' COMPENSATION
CHAIRMAN KOTT announced that the first order of business would be
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."
[The bill had been introduced by the House Labor and Commerce
(L&C) Standing Committee, chaired by Representative Rokeberg, at
the request of the Department of Labor & Workforce Development
and the Alaska Labor-Management Ad Hoc Committee on Workers'
Compensation. Before the committee was CSHB 419(L&C).]
Number 0070
REPRESENTATIVE ROKEBERG explained that the bill is the first
major rewrite of the workers' compensation laws in Alaska since
1988. It provides a long-overdue raise in benefits to Alaskan
workers and, with that, a raise in premiums to the business
community of the state. Representative Rokeberg referred to a
letter in packets from the National Council on Compensation
Insurance (NCCI) to Mr. Paul Grossi, which indicates the NCCI has
determined that the impact on premiums will be between 7.7
percent and 8.9 percent.
REPRESENTATIVE ROKEBERG pointed out that this bill is a delicate
balance between the business community and the labor community,
including organized labor, in Alaska. Of several hearings in the
House L&C Committee, one was devoted entirely to the Legislative
Budget and Audit Committee audit on the bill in order to have
department representatives respond, on the record, to all aspects
of the audit. Two amendments, which he called conforming
amendments, had been made in the House L&C Committee. One
regards the religious freedom section, Section 20, which has come
under some fire since CSHB 419(L&C) moved out of that committee.
Representative Rokeberg alerted the committee that subsection (r)
under Section 7 is also controversial. He suggested that the
present committee may want to focus on those aspects. He asked
that Mr. Grossi go over the bill.
Number 0271
PAUL GROSSI, Director, Division of Workers' Compensation,
Department of Labor & Workforce Development, informed members
that the department supports this bill, compromise legislation
that is a product of the labor-management ad hoc committee. The
bill contains provisions for both employees and employers. As
mentioned, it increases benefits that have lost value over the
last 12 years. It raises permanent partial impairment (PPI)
benefits from $135,000 to $177,000; increases the maximum minimum
compensation rate, which is indexed to the Alaska average weekly
wage, so that presently it would bring the maximum up to $772 a
week, with a minimum of $170 a week; raises the amount for
retraining from $10,000 to $13,300; increases widows' and
orphans' benefits, as well as burial expenses; allows overtime
pay to be part of the calculation for the weekly compensation
rate; and increases benefits during the retraining process from
60 percent of the spendable weekly wage to 70 percent.
MR. GROSSI highlighted provisions that the "employer side" had
agreed to, for the most part dealing with the retraining process
or the reemployment benefits process. One big issue has been
that the waiver of retraining benefits allows for a simple,
summary way of waiving those benefits and providing that the
waiver would be all-inclusive, he indicated. The bill also
streamlines the time line for retraining; clarifies what benefits
would be due during that process; clarifies the two-year time
line for requesting a hearing; increases the time line for
payment of medical bills from 14 days to 30 days; changes the
interest rate on late compensation payments from 10 percent to
the court rate, which is 2 percent above the prime rate, to his
belief; establishes a simple, summary process for employers to
obtain reasonable medical releases; and provides for an update of
the "usual, customary and reasonable fee schedule" to be done
each year, an item requested by employers that Mr. Grossi
believes will benefit both sides.
Number 0573
MR. GROSSI turned attention to the amendment regarding religious
treatment [now Section 20 of CSHB 419(L&C)], which read:
* Sec. 20. AS 23.30 is amended by adding a new section
to read:
Sec. 23.30.280. Coverage for religious nonmedical
health care services. Nothing in this chapter shall be
construed to prevent an employee with an injury from
relying in good faith on religious nonmedical services
for healing through prayer alone or care through
religious nonmedical nursing services provided by an
individual, a nursing facility, or a visiting nurse
service without incurring a loss or reduction of
compensation or benefits due under this chapter. This
section does not exempt an employee from submitting to
an examination by a physician or surgeon as required
under AS 23.30.095(e).
MR. GROSSI explained the department's position. They do see some
problems with it [Section 20]. They need time to determine
whether it is a good idea and what the effect would be; they
don't know that now. For example, it could affect a premium.
Also, the department doesn't know how they would be able to judge
those things; it would require a certain religious expertise to
determine whether care is reasonable and necessary. Furthermore,
how does this fit into the payment and fee schedule? What is a
usual, customary and reasonable fee for this service? The
department doesn't know whether it would be a problem. They
believe it requires some time to look at, to see if other states
do it and, if so, how it affects them and how those states render
decisions based on any controversy that occurs.
MR. GROSSI indicated the final issue, which he would let the ad
hoc committee speak to, is concern that [the ad hoc committee]
would withdraw support "if that stays in there as it is."
Number 0690
CHAIRMAN KOTT asked who had requested the addition of Section 20,
and what the rationale was.
REPRESENTATIVE ROKEBERG answered that the request had come from
Richard (Dick) Block, an advocate for Christian Scientists in
Alaska who is a former director of [the Division of] Insurance.
Mr. Block's testimony was that he didn't believe it would have an
impact, Representative Rokeberg reported, so the language was
adopted. However, because that had occurred at the final hearing
in the House L&C Committee, he himself could appreciate the
department's position regarding the need for review to determine
fiscal impacts and how it would be administered. He noted that
the same committee had recently adopted a related provision in
another bill, the so-called "patients' bill of rights" [HB 211].
Number 0765
MR. GROSSI, responding to a question from Representative James,
restated his earlier comments about Section 20, then elaborated.
He suggested that perhaps the department could look at it closely
between sessions, to maybe come up with a separate bill. It
needs to be studied, some legal issues need to be clarified, and
the department needs to determine whether it would affect the
premium.
REPRESENTATIVE JAMES read from the last sentence of Section 20.
She noted that such treatment and healing would be less costly
than treatment by a regular physician or physical therapist. She
said it seems clear what it does, and it would provide a cost
savings.
Number 0916
MR. GROSSI explained that issues would include whether the
provider of this care can make determinations on disability and
so forth. Yes, the employer could have a person examined and
perhaps even controvert [a claim] based on that examination.
However, at some point, the department would probably have to
evaluate that and determine which provider - or religious or
medical expert - to follow, and whether a board examination was
needed. If so, would they need a religious expert as well as a
medical expert in order to make a determination? Those are the
kinds of issues that the department doesn't know about. Mr.
Grossi reiterated the desire to know whether other states do it,
and, if so, what the issues are. Emphasizing the need for time
to really look into it, he concluded:
It could be that you're right, and we come back next
year and there's absolutely nothing wrong with this,
... and someone can put in a bill and we'd possibly
support it, or at least not oppose it. But we just
don't know, I guess is the answer to that.
Number 1026
REPRESENTATIVE JAMES replied that she doesn't think it is
measurable. To her, it is either a good idea or not, on its
face, and any kind of effort to determine it will "kill it," in
the long run. Alluding to faith healing, Representative James
said she doesn't believe that the people who do the prayer, for
example, have the ability to make that decision, which is a
"faith effort."
MR. GROSSI again emphasized that he doesn't know but wants to at
least look to guidance from other states. The section does seem
to allow for all benefits to proceed as if this were a standard
medical provider, he noted, and it does allow for the employer to
have the employee examined. But the issue is whether that still
will lead to a lot of questions.
REPRESENTATIVE JAMES asked what happens, if [Section 20] is taken
out, to a person who wants to get this kind of treatment. Would
that person's benefits be cut off? Or would the person be
ineligible for any compensation?
MR. GROSSI responded that it would have to be up to some medical
provider to make a determination of disability and so forth. As
for treatment with prayer, the department has never had this
situation come up, to his knowledge, so he doesn't know how to
answer that question.
Number 1171
REPRESENTATIVE CROFT asked whether a provision in the workers'
compensation law says that somebody who unreasonably refuses
treatment loses his or her benefits.
MR. GROSSI said not per se, but that could happen if a person
does something that prolongs the disability when treatment could
change that; there could be a controversion of those benefits.
REPRESENTATIVE CROFT asked if the more important question here
isn't whether a person loses or affects other rights because of
choosing prayer, for example, rather than the issue of the
payment for prayer.
MR. GROSSI replied that it could be, but there are a number of
issues, including how the department would make these
determinations, which would involve difficulties regarding
expertise and what those determinations would be based upon; what
the possible costs are to the system; and how the department
would administer this.
Number 1266
REPRESENTATIVE CROFT asked what concessions had been desired or
achieved by the business community in return for raising the
benefits to adjust for inflation. He noted that Sections 2 and 6
on noncooperation appear to be in that category, as well as "the
waiver idea" in Section 7.
MR. GROSSI pointed out a side-by-side analysis [dated March 7,
2000] that compares HB 419 with the present law. As for major
areas, he first listed the waiver of the retraining or
reemployment benefits in a simple manner [Section 7]. After
Representative Rokeberg called attention to another document in
packets [dated February 2, 2000, titled "Legislative Agenda -
Year 2000"], which lists concerns of management and labor, Mr.
Grossi said, "That pretty much is the major quid pro quo, I
guess."
Number 1445
REPRESENTATIVE CROFT questioned whether, philosophically, the
process of giving away some workers' rights in return for
adjusting costs for inflation every 12 years is the correct one.
MR. GROSSI pointed out some increases in benefits that clearly
weren't there before, such as the death benefit; if there is a
widow or widower and a child, that goes from 80 percent of the
spendable weekly wage to 90 percent, and if there is a widow or
widower and two children or just an orphan, then it goes to 100
percent of the spendable weekly wage. Those are beyond merely
adjusting for inflation. Also included is indexing of the
maximum and minimum compensation rates. Compensation is based on
80 percent of the employee's spendable weekly wage, Mr. Grossi
explained, up to a maximum compensation rate, which is presently
$700. But this provision allows that to go beyond $700 if 80
percent of the employee's spendable weekly wage is more than
$700; the same is true with minimum compensation rates.
REPRESENTATIVE ROKEBERG also responded to Representative Croft,
indicating he doesn't think it is an issue of balancing one with
the other here, in terms of the compromise, even though some
concessions have been made. Many "management side" issues relate
to updating the customary and reasonable charge, which probably
doesn't hurt the worker. Furthermore, he believes that the
change in interest rate should have been done anyway, by this
committee. A number of items merely "clarify and clean up," he
said. He suggested that perhaps the people from the ad hoc
committee should talk about what went on in terms of the
compromise.
REPRESENTATIVE CROFT agreed it seems to be a mix, with
concessions by labor and management plus technical items.
However, the committee is being presented with a public policy
compromise that legislators didn't make, he indicated, with lots
of difficulties purported if the bill is amended. He expressed
some discomfort at being given legislation and being told, "You
can't touch it." Representative Croft said he at least wants to
know on what basis those public policy decisions have been made
and whether [the committee] agrees with them. In particular, is
this going to be the process used in this area forever? If the
price for inflation-proofing benefits is concessions every 8 to
12 years, he believes that is an extremely poor way to do public
policy in this area. He would be glad to ask the ad hoc
committee about that, he added.
Number 1691
REPRESENTATIVE CROFT turned attention to Section 7, which read:
*Sec. 7. AS 23.30.041 is amended by adding a new
subsection to read:
(r) Notwithstanding AS 23.30.012, an employee may
waive, at any time, any benefits or rights under this
section, including an eligibility evaluation and
benefits related to a reemployment plan. To waive any
benefits or rights under this section, an employee must
file a statement under oath with the board to notify
the parties of the waiver and to specify the scope of
benefits or rights that the employee seeks to waive.
The statement must be on a form prescribed or approved
by the board. The board shall serve the notice of
waiver on all parties to the claim within 10 days after
filing. The waiver is effective upon service to the
party. A waiver effective under this subsection
discharges the liability of the employer for the
benefits or rights contained in this section. The
waiver may not be modified under AS 23.30.130.
REPRESENTATIVE CROFT pointed out that the new language would
allow the employee to waive a benefit, whereas currently that
requires board approval, in effect. He asked whether it is
standard in workers' compensation to have the board approve any
settlement.
Number 1717
MR. GROSSI said the standard in workers' compensation is that
payments are made under the formulas in the statute. Beyond
that, it requires a "compromise and release."
REPRESENTATIVE CROFT asked whether any waiver or increase of
those requires board approval, then.
MR. GROSSI said that is correct, right now.
REPRESENTATIVE CROFT asked why that provision of having board
approval for any waiver is in there [in current law], generally.
MR. GROSSI answered that the statute reads, to his belief, that a
"compromise and release" must be in the best interest of the
employee. That is why it requires this review, to make that
determination.
Number 1749
REPRESENTATIVE ROKEBERG requested confirmation that the waiver of
permanent partial impairment (PPI) currently can be done only
after a finding of medical stability.
MR. GROSSI answered, "The permanent partial impairment occurs
after medical stability occurs, and then there's a rating. As
far as waiving it, there is no provision for waiving the
permanent partial impairment." Following Representative
Rokeberg's comment that he thought that was the $700, Mr. Grossi
confirmed that Representative Rokeberg was talking about the
proposed language, then stated that the employee, under this,
would be allowed to receive a lump-sum payment rather than
getting it in incremental payments over time. If a person waived
rehabilitation benefits through a form prescribed by the board,
that form would have to indicate every possible benefit being
waived, and probably would indicate telephone numbers of the
information officer and the board for the person to call if there
were questions.
REPRESENTATIVE ROKEBERG asked if what the person would be waiving
would be the rehabilitation benefits, which have a maximum value
of $13,000 [under the bill].
MR. GROSSI said basically, yes. It is the retraining benefits.
REPRESENTATIVE ROKEBERG said it is $10,000 now and will go up to
$13,000. He asked whether all the hullabaloo is about the
potential of missing out on a $13,000 benefit, when, in fact,
many workers don't even want to take the prescribed training but
would rather do it on their own.
MR. GROSSI answered that of perhaps 300 people found eligible
yearly, only approximately 25 actually complete a plan. The rest
basically settle out the benefits to obtain a lump-sum payment.
Number 1865
REPRESENTATIVE MURKOWSKI inquired about the difference between
the "compromise and release" form now in effect and this form
that the board would create under subsection (r) in Section 7 of
the bill.
MR. GROSSI explained that the difference is that the compromise
and release requires a formal board review and determination,
whereas this would be a signed waiver that would have that
effect. However, it would only be for the waiver of the
rehabilitation benefits, not the entire claim, he added. The
difference is in the review.
Number 1904
REPRESENTATIVE MURKOWSKI returned attention to Section 20
regarding religious treatment. She recalled that in the House
Labor and Commerce Standing Committee it had been one of the
first amendments presented, in early March. She asked, "Are you
saying that nobody has had a chance to look at this and speak up,
either in favor or in opposition?"
MR. GROSSI recalled that the amendment was approved at the last
meeting, and he saw the draft a day or two later because he had
attended that meeting telephonically. He added, "We knew that
there was something out there; we'd seen some letters to that
effect, but we really hadn't seen the language until ... a day or
so after the [hearing]."
REPRESENTATIVE MURKOWSKI suggested, however, that the earlier
discussion of the draft language should have been a "blip on
somebody's radar screen." She would be curious to know what the
ad hoc committee thinks about that when they testify, she added.
Number 1979
REPRESENTATIVE GREEN followed up on Representative Croft's
concern. He asked: Did it take 12 years to get agreement, or
were there 12 years when this didn't need review? And could this
issue be revisited in a year or two if this doesn't work?
MR. GROSSI explained that originally benefits were addressed in
1988, when there was a severe recession. Wages were going down
but the premium was going up, so there was a feeling that there
was a need to address the premium. The overall premium has gone
down quite a bit, Mr. Grossi pointed out. Furthermore, raising
benefits has been under discussion for the last few years. Mr.
Grossi indicated it takes some time to get enough support for
these kinds of things to actually get a proposal before the
legislature. He suggested asking the ad hoc committee about that
but said he certainly would be willing to work in the interim to
address any potential bills in the future too. He said it
probably would be a good idea to revisit benefits and those types
of things every couple of years.
Number 2072
REPRESENTATIVE KERTTULA referred to earlier mention that the
lump-sum payment is related to the waiver of rehabilitation
benefits. She asked how that works, both now and under the bill.
MR. GROSSI answered that [now] one can get a lump sum for waiving
rehabilitation or waiving anything, but it is a formal process
where there is a signed settlement; that is reviewed by the
board, and it often requires a hearing to get the settlement
approved. It can require some time.
REPRESENTATIVE KERTTULA asked whether, after passage of the bill,
one could get a lump sum simply by signing off on it.
MR. GROSSI replied that one could, but it strictly would be for
the waiver of reemployment benefits; those would have a maximum
of $13,300, plus, potentially, some stipend benefits - 70 percent
of the spendable weekly wage - that might be due during the
retraining process. All of the other benefits would still
require board review.
Number 2140
REPRESENTATIVE KERTTULA asked: Would the person be taking the
money instead of the benefits, or is it some other lump sum?
MR. GROSSI answered, "The law doesn't specifically address that.
You could. I don't think there would be anything preventing
that."
REPRESENTATIVE JAMES asked whether the partial permanent
settlement that one would take in cash would be twice the $13,300
maximum amount for reemployment benefits.
MR. GROSSI explained:
It depends. ... The way the permanent partial
impairment works is you're rated under the American
Medical Association (AMA) guides for a whole-person
impairment. And say your impairment was 10 percent.
Presently, that would be $13,500. Under the new law,
it would be $17,700. ... It's whatever percentage that
it is times that number.
MR. GROSSI, in response to a question by Representative James,
restated that approximately 25 people complete the plan out of
the 300 determined eligible.
REPRESENTATIVE JAMES asked whether that is because the others
took a settlement instead.
MR. GROSSI said that is primarily it, for the vast majority.
Number 2215
REPRESENTATIVE JAMES asked: If a person is doing the
reemployment plan and is still unable to work, does this $13,300
- which is the maximum that can be spent - include the training
and the ongoing monthly compensation while waiting?
MR. GROSSI explained that as both present law works and the new
law would work, someone who chooses the reemployment benefit is
paid a permanent partial impairment in weekly increments of
whatever the temporary total disability rate is, which is 80
percent of one's spendable weekly wage. If that is used, then
the "stipend" would kick in and be paid until the end of the
retraining process; under present law, that is 60 percent of the
spendable weekly wage, and under the new law, it would be 70
percent. Therefore, there could be some additional stipend money
as well.
REPRESENTATIVE JAMES said, "Of the 25 out of the 300 potential,
you're assuming that they take the money up-front instead of
going on. Do you have any indication how many people might start
and not finish, or, for some reason or other, the reemployment
plan wasn't a good plan for them?"
MR. GROSSI answered that there are a lot of variables.
Suggesting that some "rehab people" may have a better handle on
it, he then explained that people are basically told what they
can be trained for under the parameters of this law, which those
people may or may not want. If people don't want it, they
usually settle.
REPRESENTATIVE JAMES requested an overview of how much less money
people receive under the settlement as opposed to taking the
reemployment plan. She suggested that a person may get more in
the latter case, because they may still be permanently totally
disabled in the end.
MR. GROSSI said he didn't know, but it could be less. Even
currently, if someone doesn't want retraining in [a particular
field], that person won't take that benefit.
Number 2350
REPRESENTATIVE CROFT returned attention to Section 7. He asked
whether the Administration would have any problem with saying
that one could waive any and all benefits under the compact
without board approval.
MR. GROSSI answered, "We may. ... I'd have to think about that."
REPRESENTATIVE CROFT asked whether it is the Administration's
position that these rates, these benefits, should keep up with
inflation.
MR. GROSSI replied, "As best as possible, yes. I would have to
say that we feel that would be the best thing. ... There's a lot
of variables that have to be considered, ... one of which is ...
how much can be (indisc.)."
REPRESENTATIVE CROFT asked whether having the "whole-body value"
go from $135,000 to $177,000 keeps up with inflation over the
last 12 years.
MR. GROSSI said he would defer to the ad hoc committee, but he
understands that they had used the Anchorage cost-price index
(CPI) for the calculation; they had started on this awhile back,
so as to its present value, he doesn't know.
Number 2409
REPRESENTATIVE ROKEBERG inquired about a change to allow for an
annual readjustment.
MR. GROSSI responded that it is annualized for the maximum and
minimum compensation rates.
REPRESENTATIVE ROKEBERG remarked that they had taken the weekly
caps off of the benefits and put those against the "spendable."
He suggested there would be an automatic increase on that, which
is the stipend or weekly benefit. He asked if that is correct.
MR. GROSSI replied that it has to do with the maximum
compensation rate and the minimum compensation rate.
REPRESENTATIVE ROKEBERG asked whether that is on a weekly basis.
MR. GROSSI affirmed that.
REPRESENTATIVE ROKEBERG commented, "So that goes up
automatically."
Number 2448
REPRESENTATIVE CROFT asked for confirmation about what goes up
automatically and what doesn't. The $177,000 - which is now
$135,000 - wouldn't go up automatically, but other things would
start to be tied to it. Therefore, to the extent that got raised
later, the other items would "float" with it. He asked whether
that is accurate, then specified, "What gets raised automatically
under this new bill, and what continues to need our involvement
to raise it?"
MR. GROSSI answered that the maximum and minimum compensation
rates would be adjusted automatically, yearly. He affirmed that
the $177,000 wouldn't, however, nor would the retraining benefit
or funeral benefits. He thinks that is basically it.
REPRESENTATIVE ROKEBERG asked to hear from the ad hoc committee.
Number 2469
WILLEM (WILLY) VAN HEMERT testified via teleconference, noting
that he is a resident of Alaska who currently is an owner of CRW
Engineering Group. He specified that he was representing WCCA
[Workers' Compensation Committee of Alaska], a management-
supported organization that looks at workers' compensation
issues; he mentioned that there are approximately 150 member
organizations. Mr. Van Hemert further noted that he had served
on the ad hoc committee as co-chair representing management.
TAPE 00-45, SIDE B
Number 0001
MR. VAN HEMERT reported that the ad hoc committee supports the
proposed CS with the exception of Section 20 regarding coverage
for religious nonmedical health care services. He said he agrees
with Representative James that, on first reading, it would seem
to not be an issue. He explained reasons for opposing that
provision:
First of all, it hasn't had a lot of thought. I think
anyone who was on Representative Rokeberg's committee
... seemed to understand that the workers' comp is a
very complex system. There was no review by anyone
other than the committee on that particular issue.
And, to our knowledge, there are no other states that
have similar legislation involving ... nonmedical
health care services.
MR. VAN HEMERT told members that the legislation doesn't really
address a problem at this time. He has talked to Mr. Block (ph),
who will present his position as a Christian Scientist to the
WCCA in two weeks, "and even he admits that there are currently
no problems." No one has been denied benefits, Mr. Van Hemert
said. Mr. Block (ph) just perceives a potential problem that he
is trying to address with legislation. Mr. Van Hemert stated:
We see this as being a significant problem in carrying
out workers' comp Acts. We're going to be looking at a
variety of home remedies while people are receiving
benefits. And Mr. Block (ph) thinks that by putting in
there "relying on good faith," we avoid the problems.
But in the real world, when someone puts in a claim,
the only way that you can undo that or argue against
that claim is to controvert it.
When the insurance carrier controverts that claim, it
has to go before the board. The board will then have
to determine whether Hinduism, Buddhism, [voodooism],
being part of the [Jonestown] cult, being a Christian
Scientist ... are all good-faith religions on which
they can rely for nonmedical treatment. Then you're
going to have a number of experts testify as to whether
prayer, steambaths, marijuana, acupuncture are all
reasonable remedies for whatever the injury is at hand.
Those will all have to be determinations made by the
board, and I think that's what Mr. Grossi was trying to
allude to. Currently, the board has wide discretion in
what they allow for treatment. And I think that's why
it has not been a problem in the past.
The last item ... is the cost factor. When you
consider all these issues that are going to be brought
before the board, we know a lot of these claims will be
respected, and there is going to be cost associated
with them. The cost, if you read in a letter from NCCI
[National Council on Compensation Insurance, Inc.],
does not include this provision. And I think you're
going to have a very difficult time, until the
provision is enacted, determining what the cost is
[because], again, I don't believe any other state has
this provision -- or whether the longshoremen's Act,
which is a workers' compensation (indisc.).
We cannot support this amendment. We think it was
well-intentioned, but we think it needs more time, it
needs more thought. And WCCA and the ad hoc
[committee] cannot ... support its inclusion in the
bill.
Number 0168
MR. VAN HEMERT turned attention to Representative Croft's
question regarding whether "we [are] trading increases to
benefits that should be normally taken into account because of
inflation by giving away benefits to the injured worker." Mr.
Van Hemert declared, "Definitely not." One reason that wages
haven't been adjusted is that for a number of years, the $700
represented the highest weekly maximum of any state. To his
belief, currently that amount is still either the fifth or sixth
highest of the 50 states.
MR. VAN HEMERT explained that management recognizes that some
items need to be negotiated periodically, and there are not a lot
of dollar issues on the management side. Many of these are
implementation issues. Once a law is written, the implementation
is not always similar to what the intent was, and many times the
intent has been eroded either through the court system or the
board's actions. "And I think a lot of the things that we have
are just trying to restore that," Mr. Van Hemert added.
MR. VAN HEMER turned attention to the waiver issue. Asserting
that the waiver is strictly for reemployment benefits, he said:
Part of the reason that we requested this waiver is
that the PPI is paid as a lump sum. ... There are times
when the injured worker really does not want vocational
rehabilitation. And in order to get a PPI payment,
there are a number of steps he has to go through that
the injured worker may not want to; that delays his
payment. So this is also potential benefits to the
injured worker.
The other problem is ... that management does not like
to see double dipping. So what occurs is sometimes if
the PPI payment is made in a lump sum, and the injured
worker comes back several years later and asks for
vocational rehabilition, then the weekly wages that are
paid come off of a separate stipend that's not included
in the PPI. The PPI is basically gone or very
difficult to get [back]. We did try to strengthen that
with this legislation.
Number 0262
REPRESENTATIVE CROFT asked whether there was a labor
representative from the ad hoc committee available, and whether
Mr. Van Hemert was representing the ad hoc committee itself.
MR. VAN HEMERT indicated Kevin Dougherty, the ad hoc committee
member who represents the [District Council of Laborers], was
unavailable; however, the two men had spoken about these issues
and were basically in agreement.
CHAIRMAN KOTT asked whether Mr. Dougherty is also of the
impression that Section 20 should be deleted.
MR. VAN HEMERT answered, "Yes. He basically has no knowledge of
it, and he feels that it needs more study before we can really go
forward with it."
CHAIRMAN KOTT asked, "Would you withdraw your support of the bill
if Section 20 were retained in the bill?"
MR. VAN HEMERT affirmed that.
Number 0316
REPRESENTATIVE ROKEBERG returned attention to subsection (r) in
Section 7 of the bill. He stated his understanding that the
total amount of the benefit package for vocational retraining is
now going to be limited, in the new draft, to $13,300, but that
doesn't include the weekly stipend.
Number 0331
MR. VAN HEMERT said no, it does not. Normally, if someone were
to request vocational rehabilitation, that person's weekly
stipend would be paid from their PPI lump sum until it ran out.
Once the PPI lump sum runs out, they would continue to receive a
stipend that comes from a different pot of money. They would not
be left without a weekly stipend. He thinks there is a two-year
limit on vocational rehabilitation.
Number 0350
REPRESENTATIVE ROKEBERG asked if there has been a problem with
some workers entering into a vocational rehabilitation program,
continuing for a while, dropping out, and then asking to start
another one, so that it goes on and on.
MR. VAN HEMERT said he is an engineer, not a workers'
compensation expert, and doesn't know about that. Nor has he
heard it mentioned before.
REPRESENTATIVE ROKEBERG asked how it benefits workers.
MR. VAN HEMERT explained that the benefit is that the worker can
get a lump-sum PPI payment immediately, without having to go the
board or to have a vocational rehabilitation evaluation.
Number 0401
REPRESENTATIVE ROKEBERG said he had heard in the House L&C
Committee that there is some fear of coercion, such as from an
insurance company that might persuade an injured worker to take a
lump sum "to get rid of him," and the worker then would lose
benefits including the right to come back for retraining. The
implication was that there is a greater total package of benefits
available if one comes back for retraining after a period of
time.
MR. VAN HEMERT responded that there would be no difference in
benefits that he was aware of, other than the fact that an
injured worker who received a PPI payment under the current
system could [later] go back and get vocational rehabilitation
because it is very difficult to retrieve the PPI payment, and
this legislation basically undoes the double dipping.
MR. VAN HEMERT explained that normally the PPI payment would go
toward the weekly stipend. That is the trade-off. If one wants
want vocationally rehabilitation, one doesn't get the PPI in a
lump sum; it just becomes part of the stipend. Anything left
over after paying out the weekly stipend would still go to the
injured worker in a lump sum, but only after the weekly stipend
has been paid during rehabilitation.
Number 0741
REPRESENTATIVE CROFT asked where double dipping is addressed in
the bill.
MR. VAN HEMERT explained that it is not in the bill, which just
sets time limits regarding how long after an injury a worker can
request vocational rehabilitation. It has to be within two
years, and there is some language more strongly reinforcing that;
if a worker take the PPI as a lump sum, that amount will be taken
out of the worker's weekly stipend if that worker later asks for
vocational rehabilitation.
Number 0500
REPRESENTATIVE ROKEBERG recalled an earlier question about the
increase in the PPI. He asked if the committee's analysis was
correct that the weekly benefit goes up and will continue to go
up, but that there is an overall cap on the total benefit and the
retraining benefit.
MR. VAN HEMERT confirmed that that was a correct interpretation.
Number 523
REPRESENTATIVE MURKOWSKI referred to a letter received by the
committee urging rejection of Section 7, subsection (r). The
writer had expressed concern that an employee could waive this
[vocational rehabilitation] without appropriate legal advice or
explanation. Representative Murkowski conveyed her understanding
that the compromise and release form tells workers what they are
waiving. "But is actual legal advice being made available to
them, and is that being eliminated through this provision?" she
asked.
Number 0564
MR. GROSSI said a worker can obtain use of an attorney but isn't
required to have one. If the worker does use an attorney, the
employer may be required to pay for that.
Number 0490
REPRESENTATIVE MURKOWSKI asked: If the division makes an
attorney available to a worker, is that at the worker's own
expense?
MR. GROSSI explained that it could be, but an employer may be
required to pay the attorney under certain conditions.
REPRESENTATIVE MURKOWSKI summarized her understanding that if the
committee were to pass this legislation, individual workers still
would be able to seek their own legal counsel just as they do
now.
MR. GROSSI said that was correct.
REPRESENTATIVE CROFT said the main thing that changes, then, is
that there would no longer be board determination that a waiver
is in the best interest of the worker.
MR. GROSSI affirmed that.
Number 0625
REPRESENTATIVE ROKEBERG inquired about a letter from Mr. Joseph
A. Kalamarides that says currently the reemployment benefit is
paid in a lump sum without [the worker] signing anything.
Number 0545
MR. GROSSI explained that if the employee is not entitled to
retraining benefits, that person is entitled to a lump-sum
payment of PPI; that PPI is paid in weekly increments, as is the
temporary total disability compensation rate, which is 80 percent
of the spendable weekly wage. "The answer," he said, "is
'sometimes,' but only if they have not requested rehab or they
are not in that process." He said that would be the same under
the proposed law.
Number 0690
REPRESENTATIVE ROKEBERG asked whether it is the right of the
injured worker to request the reemployment training, and whether
the worker has to have a certain percentage of impairment before
the request can be made.
MR. GROSSI explained that the worker has to have an impairment,
and there has to have been a prediction that the worker is unable
to return to the job held at the time of injury or any job held
within the past ten years.
Number 0709
REPRESENTATIVE ROKEBERG asked, "So that determination would
already have been made before there is even a chance to grant a
waiver? In other words, you have to qualify for these benefits
before you can waive them, right?"
MR. GROSSI said yes.
Number 0722
REPRESENTATIVE ROKEBERG asked for clarification about the process
of determination of eligibility for retraining, and asked who
makes that determination.
MR. GROSSI explained that the injured worker makes a request and
the division refers the worker to a rehabilitation specialist.
The worker is evaluated, and then there is a determination as to
whether that worker is eligible or ineligible according to the
statute. That determination is made by the reemployment benefits
administrator. At that point, the worker can either go forward
with the retraining or settle the case.
Number 0760
REPRESENTATIVE ROKEBERG observed that this seems to indicate that
a worker does not need a board ruling of medical stability or
retrainability, for instance.
MR. GROSSI replied, "As for as the referral, no. As far as the
ability to return to work, there has to be a prediction by a
doctor at this point."
REPRESENTATIVE ROKEBERG asked whether a dispute between the
worker and the adjuster about the worker's ability to return to
work would go to the board.
MR. GROSSI affirmed that.
REPRESENTATIVE ROKEBERG asked if, when everybody agrees that a
worker needs to be retrained, the adjuster can make that
determination.
MR. GROSSI said the adjuster can make the referral, but still the
worker's eligibility has to be determined.
REPRESENTATIVE ROKEBERG surmised that it would be the same under
the new bill as under existing law.
MR. GROSSI confirmed that it would.
REPRESENTATIVE ROKEBERG said he wanted to clarify that a period
of time had lapsed before this takes place.
MR. GROSSI assured him, "Most of this stuff doesn't occur until
medical stability. There has to be some prediction ...."
REPRESENTATIVE ROKEBERG interjected, "... of whether they can
return to work or not or whether they need retraining, so then
the retraining benefits pop up."
MR. GROSSI said that was correct.
REPRESENTATIVE ROKEBERG summarized, "So the adjuster would say
the retraining benefits are applicable in this case; therefore,
[do] you want to waive these benefits and get them right now or
do you want to go through this whole rigmarole? Okay, I got it."
Number 0875
DON ETHERIDGE, Lobbyist for AFL-CIO for Alaska, said that group
supports the bill as it came out of the ad hoc committee. He has
heard complaints that more changes are needed, but as he was told
years ago, there only way to eat an elephant is one bite at a
time. "We see this as our first bite," he said, "and let's go
for another one at another time, but let's go ahead and take this
bite while we have an opportunity to do so." He noted that there
have not been many other improvements in workers' compensation in
a long time, and this is a step in the right direction.
Number 0933
MARJORIE LINDER, Vocational Rehabilitation Counselor, said she
has worked in the workers' compensation system since 1978, has
served on the rehabilitation committee in 1988, and was
instrumental in helping to draft this law, which she now
considers "a Frankenstein." Back then, she thought the law was
unbalanced in favor of injured workers. "But at this point," she
said, "this law is so out of balance [in the opposite direction]
that if it were put in a washing machine it would dance across
the room."
MS. LINDER told members she had been listening to the committee's
questions and the explanations of what the rehabilitation benefit
is and all that goes into it. She thinks those participating in
the discussion have far more intelligence than the average
injured worker, but even they do not understand it. She does not
see how they expect this to be explained on a board form. The
injured worker will not know what he/she is waiving until he/she
is medically stable. This law allows the worker to waive the
benefits at any time, which could happen before being medically
stable or found eligible, even; the worker may be waiving
benefits that he/she may or may not even have. This law also
allows one to waive the benefit before a rehabilitation plan is
written for it, so the person won't really know how long the
rehabilitation benefit is for, and therefore how much money he or
she would get.
Number 1026
MS. LINDER testified that an injured worker is waiving far more
than $13,000. The worker is waiving [financial] support during
the period of rehabilitation. For instance, if the worker had a
herniated disk, that is a PPI award of about 7 percent, "so we're
talking about seven times $17,070." She said that hypothetical
worker is paid at $500 a week for 17.7. After that, the worker
is paid the rehabilitation stipend for the balance of what could
be a two-year retraining program, which would be for 84.3 weeks.
Under the new law, this would give the worker about $450 a week.
So the worker is paid $450 a week while retraining for the rest
of the 84.3 weeks, then is paid for tuition and supplies up to a
maximum of $13,300. Ms. Linder began doing the math to come up
with the total benefits that would be waived.
Number 1130
REPRESENTATIVE ROKEBERG, citing a letter that Ms. Linder had
written to the House L&C Committee, quoted a total of $51,235 [to
which Ms. Linder concurred] that was what the injured worker was
really waiving.
MS. LINDER again pointed out that when Mr. Grossi had tried to
explain what an injured worker was waiving, the committee members
couldn't even figure it out. She emphasized the complexity. Ms.
Linder expressed concern that an injured worker could be
approached at any time, [perhaps] two weeks or two months after
the injury, when full of optimism and thinking that he or she
would be going back to work; when offered what sounded like a
large cash settlement, the worker probably could not figure out
what would be waived. And what happens to these people? Where
do they go? "They go to the state, they go to other disability
systems," she said, then concluded, "I am simply saying that we
need to make people responsible who should be responsible in the
first place, and get rid of this waiver, and really have a second
look at it because it is an invitation to litigation."
Number 1299
REPRESENTATIVE ROKEBERG asked Ms. Linder if, as a rehabilitation
specialist, she writes rehabilitation plans. If so, he requested
confirmation that she has a vested interest.
MS. LINDER said that to some extent she does because about 10
percent of her practice consists of writing rehabilitation plans.
Number 1320
REPRESENTATIVE ROKEBERG asked: If somebody now enters into a
plan that does not work out, does that person then start another
one?
MS. LINDER said that would be very rare, and she has never had
that happen. She emphasized that she objects to the language "at
any time." If people want to waive this after knowing their
impairment ratings and whether they are eligible for the benefit
or not, she has no objection to that. However, she objects to
their waiving this before knowing the outcome of their injuries
or whether they will be able to return to work.
Number 1389
REPRESENTATIVE JAMES said she understands Ms. Linder's concern.
REPRESENTATIVE ROKEBERG observed that a point being made might
have been missed in the House L&C Committee hearing, regarding
the timing [of the waiver] being "at any time" versus after the
finding of impairment. He suggested there might be an assumption
that a person would wait until the percentage of impairment was
determined before it would even be possible to make the
calculation.
MS. LINDER said that would a lot of sense. If the committee
would remove the "at any time" and have "after medical
stability," she believes that would be quite agreeable.
Number 1493
REPRESENTATIVE ROKEBERG asked Mr. Van Hemert why "at any time"
had been included.
MR. VAN HEMERT said he did not think it was anything intentional,
and actually the ad hoc committee wouldn't oppose an amendment
including "after medical stability"; they want to make sure that
medical stability is obtained either through the injured workers'
physician or the AMA doctor, for example.
MS. LINDER said she did not know, but she thinks it should be
whoever knows this person best and has the most information, for
example; that is a separate issue. She indicated the desire that
this determination could be made after medical stability, when
there is more information. She concluded by saying that "at any
time" is the problem she'd had with this all along.
Number 1573
REPRESENTATIVE MURKOWSKI informed members that she herself had
asked this question in the House L&C Committee. She explained,
"I said, it says 'at any time,' and the assurance I received was
that 'it never happens at any time, it always happens after
medical stability.' I agree with Ms. Linder. I think if that is
the case, then we should specify it."
Number 1602
MR. GROSSI responded that for all practical purposes, he agrees
that this only happens after medical stability occurs because the
permanent partial impairment rating cannot be done until after
medical stability; neither can the determination be made of
whether retraining benefits are due. Mr. Grossi said he could
not speak for the ad hoc committee but did not think they would
have a problem with that.
Number 1708
REPRESENTATIVE ROKEBERG expressed concern about whether there is
a definition of "medical stability" in the statute now.
MR. GROSSI assured him that it is well defined both in statute
and in case law.
REPRESENTATIVE ROKEBERG asked what the definition says.
MR. GROSSI said he thinks AS 23.30 says 45 days without
measurable improvement.
Number 1749
REPRESENTATIVE ROKEBERG suggested that the term shouldn't be
"medical stability," but that the trip wire should be when the
impairment has been approved and so forth.
MR. GROSSI clarified that medical stability basically triggers
the permanent partial impairment rating and the determination as
to whether the person can go back to work or may need retraining.
Number 1803
REPRESENTATIVE MURKOWSKI read the definition [from AS 23.30.395],
which stated:
(21) "medical stability" means the date after which
further objectively measurable improvement from the
effects of the compensable injury is not reasonably
expected to result from additional medical care or
treatment, notwithstanding the possible need for
additional medical care or the possibility of
improvement or deterioration resulting from the passage
of time; medical stability shall be presumed in the
absence of objectively measurable improvement for a
period of 45 days; this presumption may be rebutted by
clear and convincing evidence;
REPRESENTATIVE ROKEBERG said the trouble now is the ability [of
an injured worker] to come back after that. "That statute
doesn't work, I don't think," he added.
Number 1844
MR. GROSSI disagreed. He said he thought Representative Rokeberg
was talking about the idea of whether or not the worker can come
back and ask for reemployment benefits after having received [the
PPI lump-sum payment]. Right now, nothing prevents that. A
person could receive PPI in a lump sum, and, under current case
law, that person could come back in a year or so and might be
entitled to the stipend or the 60 percent of the spendable
[weekly wage] - or 70 percent under the new law - and be paid
that. The waiver would probably prevent that from occurring, he
added.
Number 1895
REPRESENTATIVE JAMES remarked that there is a very good
possibility that someone could meet the criterion of being at the
end of medical stability and, depending on the nature of the
injury, might decide to waive [retraining benefits] and ask for
[the lump-sum payment] because the person assumes there is
another job out there that is different from the old one, but
which he or she can do. But then the person tries the job and
finds he/she cannot do it. Then the worker tries yet another job
and finds he/she cannot do that either. At that point, the
person would realize the need to be retrained. However, he/she
would have given up the retraining benefit.
MR. GROSSI acknowledged that is possible.
Number 1945
REPRESENTATIVE CROFT observed that although people keep saying
this waiver provision is for the benefit of the injured worker,
HB 419 is essentially taking out the board determination. The
reason for board approval is to ensure some check that a waiver
is in the best interests of an injured worker without a job and
with medical bills stacking up, he indicated. Representative
Croft agreed with what Ms. Linder had pointed out. He stated:
The people who are negotiating this on [the employer's]
side can calculate out this $51,000. They know it,
it's their job, they can figure it out. I couldn't do
it now; I probably couldn't do it after another four
hours of this hearing, and I don't know how you can
expect an injured worker to really know what they are
waiving. I thought until Ms. Linder started that it
was $13,300. Now I'm not so sure, but I am more and
more sure that an injured worker is not in a position
to know all the things they are waiving. And all you
get if you leave out Section 7 is the board saying,
"Yes, this is in your best interests to do this. They
have offered you something else. They have offered you
a different plan that makes some sense for you." Or,
"No, you're waiving much more than $13,000," and
explaining it. That's what the board ... is there for,
to make sure that these things are in the best
interests of the worker.
Number 2029
REPRESENTATIVE ROKEBERG said he thought what they were trying to
avoid is having it be protracted and the litigation that comes
with that. He isn't satisfied with "any time" either. But
neither did he want to just regress to the current system, which
isn't working. He added, "But I don't think there is anybody here
other than Mr. Grossi who can explain that."
REPRESENTATIVE JAMES said no one has explained to her why the
current system is not working.
REPRESENTATIVE ROKEBERG asked why [HB 419] had been requested,
then. He suggested that what the ad hoc committee is agreeing to
is use of the term "medical stability" and then allowing the
adjuster to [determine] that, which would avoid the board. "I'm
just concerned about stretching it beyond what they've agreed to
or what they are willing to pay," he concluded.
NUMBER 2206
MIKE JENSEN, Attorney at Law, testified by teleconference from
Anchorage. He said he had been practicing workers' compensation
law in Alaska for 15 years, representing injured workers before
the Workers' Compensation Board as well as [longshoremen] cases
before administrative law judges. He does not do personal injury
law or represent anyone other than in the compensation situation.
Mr. Jensen said it is obvious to him that "everybody here"
started out with the best of intentions, and he thinks HB 419
goes in the right direction, making up for 12 years of neglect as
far as workers' compensation rates. But he has some concerns,
the biggest one being that just referred to by Ms. Linder. To
him, this Act corrects a problem that doesn't exist. For
example, currently workers can waive reemployment benefits if
doing so is in their best interest.
MR. JENSEN stated his belief that there is no cause for concern
about double dipping. If a worker is paid permanent benefits and
later discovers that the need for surgery for a herniated disk,
for example, it is possible to get retraining benefits if unable
to work at a former job. However, the employer gets to take back
a portion of the permanent benefits that were paid out in a lump
sum. There have been board decisions that require those benefits
to be paid out with a deduction for the excess permanent benefits
paid in the past.
Number 2361
MR. JENSEN addressed Representative Rokeberg's concerns about
dropping one plan and then getting into another plan. He said
there is a [state] supreme court case, "Something versus Greek
Corner," in which the injured worker did not finish one
rehabilitation plan and wanted to start another. The supreme
court said that under the circumstances, that worker could start
a new rehabilitation plan but could not use up more than $10,000.
Since the first rehabilitation plan had used up $5,000 of it, the
worker could only get another $5,000. "In other words," he said,
"you don't double dip. There's a maximum and that's it." He
restated that the problems which HB 419 tries to fix are not
really there, having been corrected by board decisions as well as
by the supreme court. The big fault he finds with HB 419 is that
it adds new time lines and makes the system even more complex
because it now allows for at least two or three different ways to
forfeit one's benefits that weren't there before.
TAPE 00-46, SIDE A
MR. JENSEN continued. He said this is not a field of the law
that attorneys are clamoring to get into. With this system,
there is going to be the need for even more attorneys. It makes
it too complex. When he started out 15 years ago, a person could
go through the whole system, have a hearing and get benefits if
so-entitled without meeting an attorney, which is impossible
anymore. His biggest complaint with the proposed changes is the
waiver of the reemployment benefits, which someone could do at
any time. As far as legal advice, injured workers do not come to
see an attorney like himself until something has gone wrong.
With this proposal, once the worker has waived the right it is
too late, because there is no recourse to appeal it or change it.
A worker can waive it at any time without the benefit of advice;
by the time the worker finds out that he/she made a big mistake,
no attorney will get those benefits reinstated. Mr. Jensen
encouraged the committee to propose an amendment to allow for an
informed waiver made only with the appreciation of the
seriousness of the disability.
Number 0225
REPRESENTATIVE CROFT indicated Mr. Jensen used to practice with
Representative Croft's father, who is one of the other five who
still practice workers' compensation law.
REPRESENTATIVE MURKOWSKI surmised that if the committee were to
amend the bill, then Mr. Jensen would also want them to delete
the reference to "at any time."
MR. JENSEN replied, "Yes, definitely." He again proposed that it
should say, "an appreciation of the seriousness of their
disability or injury."
REPRESENTATIVE ROKEBERG commented that it is impossible. He
agrees regarding [removing] "at any time," he said, but thinks it
has to do with trying to determine the standard. If they did use
"medical stability," how would that be determined? He indicated
the need to keep it out of the Workers' Compensation Board
because of cost. He wondered if rehabilitation plan would be
needed, and what the fee would be.
REPRESENTATIVE CROFT indicated the committee could have that
debate under the bill or amendments, but in his opinion they are
going to want Workers' Compensation Board involvement rather than
a bunch of lawyers trying to apprise injured workers of all the
consequences at that time. Workers could be informed beforehand
and sign a waiver indicating complete understanding of the
consequences, or a determination could be made afterwards by a
neutral body that it was done in the worker's best interest. He
added, "That's the system we put in, and it makes some sense."
Number 0407
REPRESENTATIVE JAMES asked whose interest the Workers'
Compensation Board is representing.
REPRESENTATIVE CROFT replied, "We've got one business, one labor,
and one in-between," the latter being a professional who studies
the law.
REPRESENTATIVE ROKEBERG suggested that the Workers' Compensation
Board is a quasi-judicial board funded by the Governor.
CHAIRMAN KOTT asked Mr. Grossi to define the make-up of the
board.
MR. GROSSI clarified that any given panel that makes a decision
on a case consists of a labor member and an industry-seat member.
He said, "It can be the commissioner of [the Department of] Labor
or his designee." The designee is an employee of the state,
often an attorney or someone trained in workers' compensation.
The entire board makes decisions on workers' compensation claims.
The determination on a case would be whether the employee
statutorily has a right to a benefit or whether the employer has
the right to stop a benefit. In answer to further questions from
the committee, he said it is a "pre-court" decision. The board
has a fact-finding role and makes determinations of law. That is
usually where it ends, but a percentage of cases are appealed to
the courts.
Number 0599
REPRESENTATIVE ROKEBERG indicated he can live with "medical
stability" but doesn't think it should go to the board to
adjudicate medical stability.
MR. GROSSI explained that the determinations of medical stability
and permanent impairment are always provided by a physician
because they are medical determinations. With respect to
retraining eligibility, it is a combination of medical issues and
a determination made by a rehabilitation specialist.
REPRESENTATIVE ROKEBERG referred to Mr. Kalamarides' letter
[dated April 3, 2000] in which he states that there is an
automatic lump-sum payment if there is a waiver now. He asked
Mr. Jensen if a worker would have to go to the board for a
determination.
MR. JENSEN responded, "You don't if the doctors all agree that
you don't need retraining - if you don't need retraining or even
if the doctors agree that you do need retraining, but because the
way the statute was written, you can still be denied rehab even
if you can't return back to your regular job." Mr. Jensen
pointed out that two supreme court decisions have asked the
legislature to correct this, but it has not happened yet. If a
person is denied retraining, and if he/she is medically stable
and rated, then that person is automatically paid the lump-sum
benefits.
REPRESENTATIVE ROKEBERG said, "Unless you go into a plan."
MR. JENSEN responded that a person would not go into a plan
unless he/she were found entitled to retraining benefits.
REPRESENTATIVE ROKEBERG asked what entitles a person to
retraining benefits.
MR. JENSEN indicated a person first needs to be found to have
requested retraining within 90 days of the injury or disability.
Then the person has to be declared eligible, which occurs after a
physician determines that the person cannot do his or her regular
job or a job that has been done in the last ten years. Once a
person is eligible, the rehabilitation administrator writes a
letter indicating a counselor needs to be chosen within ten days
in order to prepare a plan. A counselor is chosen and needs to
then be approved by the rehabilitation counselor. The counselor
has 90 days to prepare the plan. After the plan is prepared and
approved by the rehabilitation counselor, either side can appeal
the plan to the board. This process can be very long and drawn
out if the employee or the insurer raises objections along the
line.
REPRESENTATIVE ROKEBERG asked whether, anywhere along that line,
it would be appropriate to make a cut-off and allow the waiver to
occur.
MR. JENSEN restated that he does not think the current system is
broken or needs to be fixed. He said he supposes that the
appropriate time would be, at a minimum, when the injured worker
is determined stable and it is decided whether he/she will suffer
a permanent impairment.
REPRESENTATIVE ROKEBERG inquired whether the person has to be
found eligible for retraining.
MR. JENSEN said yes. The current problem is that a doctor can
say a person is stable, but not all doctors do ratings. Many
injured workers cannot afford to obtain the ratings, so the
injured worker may wait months to get the money or find a doctor
who is willing to do the rating. There can be a huge gap between
the date of stability and the rating date, but the doctor will
know whether the injured worker will have a permanent impairment
at the time that the doctor pronounces the injured worker stable.
Mr. Jensen observed that the doctor just may not do the rating
because of the cost involved or because he/she does not feel
qualified to do it. Mr. Jensen noted that at a minimum the
rating should be stated when the doctor determines that the
injured worker is stable and predicts that the injured worker
will suffer permanent impairment.
Number 0934
REPRESENTATIVE ROKEBERG asked if the rating by a doctor is taken
care of [in the bill] somewhere.
MR. GROSSI answered that the rating is determined either by the
treating doctor, the employer's doctor, or a board doctor under
the proposed law, so there would at least be more opportunity for
the rating to occur in an expedited fashion.
MR. VAN HEMERT, in response to a comment by Representative
Rokeberg, clarified that his position is that he would support
the inclusion of "any time after medical stability." In response
to a further question regarding whether the eligibility is for
retraining, Mr. Van Hemert said no. He emphasized that the base
rate, range two, is medical stability, and Mr. Jensen had
indicated that when a point of medical stability is reached, that
tells whether or not the injured worker has a partial or
permanent impairment.
Number 1031
CHAIRMAN KOTT asked whether anyone else wished to testify. There
being no response, he closed public testimony.
Number 1060
REPRESENTATIVE ROKEBERG made a motion to adopt a conceptual
amendment [Amendment 1] to Section 7, subsection (r), as follows:
on page 5, line 26, to delete the words "at any time" and insert
the phrase "after medical stability has been determined, as
defined by 'AS whatever-it-is, or something to that effect.'"
Representative Rokeberg specified that the intent is to put
medical stability in there, however it can be fitted in. He then
suggested, "... may waive after medical stability has been
determined ... under our statute."
Number 1118
CHAIRMAN KOTT called an at-ease at 3:35 p.m. He called the
meeting back to order at 3:36 p.m.
REPRESENTATIVE JAMES said she has a feeling that what the
employee gives up won't be represented by anybody who has that
employee's best interests at heart.
CHAIRMAN KOTT asked Mr. Grossi whether he wished to comment.
Number 1143
MR. GROSSI said he believes that the proposed language talks
about this waiver being on a form prescribed by the board. Those
various aspects would have to be on that form, which would be
drafted not by the insurance company but by the board. It would
have to be approved by the board at one of their meetings.
REPRESENTATIVE JAMES said that is the form but doesn't say what
is on the form. She doesn't know how much would be preprinted or
added in.
REPRESENTATIVE CROFT pointed out that he hadn't heard any
objection to Representative Rokeberg's conceptual amendment
[Amendment 1] on that, however. Although he doesn't know how
easy it will to draft, the effort can be made. Representative
Croft noted that he would make a motion to delete Section 7
afterwards. He then specified that he has no objection to this
current amendment, taking out "at any time" and adding "after
medical stability," however the drafter believes that it should
be done.
Number 1216
REPRESENTATIVE MURKOWSKI specified that the citation is [AS]
23.30.395(21).
CHAIRMAN KOTT restated conceptual Amendment 1, noting that it
would delete the words "at any time" and say something to the
effect of "may waive after medical stability has been determined,
in accordance with [AS] 23.[30].395(21). There being no
objection, Amendment 1 was adopted.
REPRESENTATIVE CROFT made a motion to adopt Amendment 2, to
delete Section 7 [as amended].
REPRESENTATIVE ROKEBERG objected.
CHAIRMAN KOTT said he would like hear from Mr. Grossi to see what
the net effect would be. He asked Representative Croft to speak
on it while Mr. Grossi came forward.
REPRESENTATIVE CROFT explained that there were two issues. The
first and most fundamental is that he objects to injured workers
having to bargain away substantive rights to give cost-of-living
updates to benefits because of inflation. That is extremely poor
public policy to do to injured workers. It ends up eventually in
a slow whittling away of all their rights if it continues to be
done this way. Five, ten or twelve years from now, in order to
get inflation up from $177,000 to whatever it would be, the
workers need to get rid of this or that. The rights of injured
workers end up being the elephant that gets eaten piece by piece.
He objects on that basis and to the extent that this is the most
substantial objectionable part of what was a concession the other
way.
REPRESENTATIVE CROFT said there hasn't been sufficient evidence
put before the committee that this is substantially broken. He
wants in each of these cases a final look by the board. This
area of law has gotten more and more complicated, to the point
where an attorney probably is needed now. Ideally, it would be
simplified, and the board would be there as a final watch to make
sure that people's rights were protected, things were done
accurately and people had good notice. A shift away from the
board taking a look at this shifts almost into more lawyers and
litigation. This is the board's job; the board already is a
compromise between labor and business in that there is one
representative of each. He isn't sure this section is broken,
and it shouldn't be fixed.
Number 1424
REPRESENTATIVE ROKEBERG remarked that he believes that they had
amended this section to take away some of the biggest problems
voiced by a number of people. Ms. Linder and Mr. Jensen had both
agreed it was an improvement, he said, and there was an agreement
by the ad hoc committee. If it [Section 7] is removed entirely,
the bill may be jeopardized. The primary thrust of the bill is
to raise benefits to the workers. It raises premiums by as much
as 8 percent to the business community in the state; that is no
little concession. He agreed with Representative Croft on the
matrix of a decision that there has to be rationality. He is not
sure what the delicate balance is, but historically the tinkering
has be kept to a minimum. Notwithstanding a responsibility to
the public to assert the rights, power and authority of the
legislature, he said this has had substantial review in the House
L&C Committee, and today has been a good hearing where the bill
has been improved. He would hate to lose this bill down the road
because of this, he concluded.
Number 1502
REPRESENTATIVE JAMES asked Mr. Grossi to delineate the difference
between what exists currently and this, now that it is amended.
There is an attorney on this board, she noted, and she is not
convinced that that attorney does anything else except to see
what side would be more challenged as to whether it is a balanced
decision. One thing this does is say, "This is it." Provide
notice to the people, and ten days later it is over, she said.
She asked how that is different than the current system besides
not having to go in front of the board with this issue.
Number 1570
MR. GROSSI replied that not going before the board is the big
difference. Once someone goes before the board and waives those
[benefits], and the board approves it, it is over. The
difference is this wouldn't require going through that process,
which can be time-consuming and can involve some litigation. The
major difference is it can be done with this relatively simple
form; although it would be on a board-prescribed form, it would
have to indicate the various benefits [being waived].
Substantively, the only difference would be the board's review in
determining whether this would be in the best interest of the
employee.
REPRESENTATIVE GREEN requested clarification about the numbers of
people who go before the board now.
MR. GROSSI restated that of the 300 people found eligible for
reemployment benefits, about 25 complete [the program]. The
percentage that actually go before the board is relatively small.
Most people get their benefits under the formulas and go back to
work. Approximately 28,000 people are injured a year. Of that
number, maybe 1,200 come to the board for anything; most of those
issues are resolved informally, and about 300-350 [cases] are
actually decided by the board. As far as compromises and
releases, approximately 600 of those are done a year.
REPRESENTATIVE GREEN commented that it is still down in the
single-digit as far as percentage. He asked if that would still
constitute a burden to continue that way as opposed to having the
waiver. Since this says "may," he asked Mr. Grossi if he feels
there will be a significant difference in the way things are
handled.
MR. GROSSI stated that he doesn't believe there will be a
significant difference. He suspects that the people who waive
the benefit under the current law will be the ones that will
waive it under the new law. It will just happen in a simpler
fashion. This is a prediction. However, if the support of
either management or labor is lost, the chances of this bill
being passed are probably fairly negligible. He suggested that
the whole bill needs to be looked at to see what it does. It
does make a lot of important improvements for injured workers, he
noted; he would hate to lose those. The windows of opportunity
haven't been numerous over the last 12 years. He is concerned
they would have to go another 12 years or a period of time before
they could again get to this point of being able to make some
substantive changes for injured workers and for those who are
affected by the law. As far as doing business the way they are
now, they're doing it.
REPRESENTATIVE GREEN asked Mr. Grossi whether he feels, as Mr.
Kalamarides' letter says, that this section would provide an
opportunity that isn't there now for an injured employee to be
taken advantage of.
MR. GROSSI said that is hard question. He doesn't like to
believe that of people.
REPRESENTATIVE GREEN mentioned being forced to take a longer time
than just writing on a form.
MR. GROSSI said it could happen. However, he suspects that with
the amendment where one waits until medical stability occurs,
there is probably less chance of that happening because now the
healing process has occurred. Those health problem stressors are
no longer there.
Number 1862
REPRESENTATIVE MURKOWSKI noted that a provision in statutes
allows the board to make modifications of an award. She asked:
If someone finds out that he/she has signed a waiver but really
didn't understand what the disability was going to be, could the
board, on its own, make a retraction for that person?
MR. GROSSI said the way this is written, no, because modification
occurs of AS 23.30.130 and that is taken away. In the current
law, he doesn't believe modification applies.
REPRESENTATIVE MURKOWSKI asked, "So we're eliminating the
modification provision?"
MR. GROSSI said yes. It is also eliminated once the compromise
(indisc.), so one doesn't have the ability to modify under the
current law either.
REPRESENTATIVE MURKOWSKI asked: At no point, for no reason,
would the board have the ability to modify any workers'
compensation award?
MR. GROSSI said no, he believes they could modify [an award].
There would be that potential if fraud, duress or those types of
special situations were to occur.
REPRESENTATIVE MURKOWSKI conveyed her understanding that Mr.
Grossi was saying those provisions are taken out with this law.
MR. GROSSI clarified that modification is under AS 23.30.130. He
indicated AS 23.30.012, regarding agreement, also has a
provision.
Number 1984
REPRESENTATIVE CROFT quoted in part from AS 23.30.130(a), which
read:
Sec. 23.30.130. Modification of awards.
(a) Upon its own initiative, or upon the
application of any party in interest on the ground of a
change in conditions, including, for the purposes of AS
23.30.175, a change in residence, or because of a
mistake in its determination of a fact, the board may,
before one year after the date of the last payment of
compensation benefits under AS 23.30.180, 23.30.185,
23.30.190, 23.30.200, or 23.30.215, whether or not a
compensation order has been issued, or before one year
after the rejection of a claim, review a compensation
case under the procedure prescribed in respect of
claims in AS 23.30.110. Under AS 23.30.110 the board
may issue a new compensation order which terminates,
continues, reinstates, increases, or decreases the
compensation, or award compensation.
REPRESENTATIVE CROFT commented, "So this says it cannot be
modified under this anymore."
MR. GROSSI referred to AS 23.30.012, regarding compromise and
release settlement agreements relating to claims, and restated
that there is a similar provision in that.
REPRESENTATIVE CROFT replied, "But this wouldn't be the subject
of a compromise and release anymore. So that wouldn't apply,
right? This is explicitly outside of any ...."
REPRESENTATIVE JAMES interjected that this is a "done deal."
MR. GROSSI affirmed that.
REPRESENTATIVE CROFT added that it looks irrevocable and
unmodifiable.
MR. GROSS replied, "Yes, but what I'm saying is, if it was
settled under a compromise and release, it would be ...."
Number 2033
REPRESENTATIVE KERTTULA asked whether anyone could provide an
actual example where a waiver had gone awry.
REPRESENTATIVE CROFT further asked whether the board had rejected
a waiver of benefits.
MR. GROSSI answered:
They deny compromise and releases ... for various
reasons, and, yes, I'm sure that waiver of rehab has
been subject -- usually, most compromise and releases
do make it before the board. ... Sometimes they have to
address certain issues to make that happen, and
sometimes it has to be done by way of a hearing. In
fact, the majority of them do get approved ultimately.
REPRESENTATIVE JAMES asked whether the goal here is to avoid a
hearing.
MR. GROSSI affirmed that, saying that is basically what is going
on here.
Number 2092
REPRESENTATIVE ROKEBERG requested confirmation that right now,
all of these waivers would have to come before the board.
MR. GROSSI affirmed that.
REPRESENTATIVE ROKEBERG conveyed his understanding from testimony
that there is a lump-sum payment that is automatic if the
adjuster and everybody agrees to it, which doesn't go to the
board.
MR. GROSSI clarified that the PPI is always due in a lump-sum
payment unless there is a retraining benefit.
REPRESENTATIVE ROKEBERG asked whether it goes to the board now
only if retraining comes into play.
MR. GROSSI answered, "In order to waive it, yes, ... or waive any
benefit, for that matter. It goes to the board."
REPRESENTATIVE ROKEBERG said the effect of Section 7, subsection
(r), is to still provide for a lump-sum benefit but stops the
process from having to go to the board to be reviewed.
MR. GROSSI affirmed that.
Number 2150
REPRESENTATIVE ROKEBERG commented:
And we found that the language makes that waiver
irrevocable. But we've heard testimony today - and I
understand it now a little better - was that it can be
like 90 days or it can be a protracted period, ...
almost like a year to get even to the board sometimes.
And we also heard testimony earlier that this should
benefit the workers, too, because they'll get the money
faster.
REPRESENTATIVE JAMES responded, "But not nearly as much."
REPRESENTATIVE ROKEBERG countered, "No, not necessarily." He
agreed that there is some confusion about it, saying he is
confused himself.
REPRESENTATIVE GREEN said that is reassuring.
REPRESENTATIVE ROKEBERG continued, saying it is only if there is
a vocational rehabilitation put in place where the stipend is
paid out, but that is paid out of the PPI, up to the $13,300, but
can actually go beyond that, according to testimony heard that
day.
MR. GROSSI said under the new law it would be a percentage of the
$177,000, which would make those benefits last longer.
Number 2203
REPRESENTATIVE ROKEBERG commented that the more he looks at this,
the more confused he gets. He said he was trying to get a
benefit to the worker to "cut this thing off," rather than having
it be protracted. It keeps [workers] from having to hire
attorneys, he suggested. He asked whether the employers hire
attorneys to go before the board.
MR. GROSSI affirmed that.
REPRESENTATIVE JAMES requested confirmation that no labor
representative was available to talk on this.
REPRESENTATIVE ROKEBERG replied that Mr. Dougherty was quite
clear in his testimony before the House Labor & Commerce
Committee.
MR. GROSSI added that [Mr. Dougherty] was also co-chair of the ad
hoc committee, along with Mr. Van Hemert.
Number 2247
CHAIRMAN KOTT restated that Amendment 2 was to delete Section 7
in its entirety. He asked Mr. Van Hemert whether, if Section 7
were deleted from the bill, support would be withdrawn.
MR. VAN HEMERT answered that right now, probably yes. Although
it goes a little beyond his own knowledge, in the past this has
been an issue. It eliminates a need to go before the board, and
testimony has indicated it can take up to six months to do that.
He believes that nothing prevents the injured worker from
obtaining all of the benefits under this provision, and there is
no issue of how much of the benefit the worker can obtain.
Referring to confusion expressed about the amount of the
benefits, he said Ms. Linder was referring to how much in actual
benefits a person could obtain under vocational rehabilitation,
yet this isn't something that the injured worker would get in a
lump sum in exchange for not going to vocational rehabilitation.
MR. VAN HEMERT continued. He said at some point, one needs to
respect the injured worker's intelligence level. He believes a
great effort is being made to protect the injured worker, and he
himself has no problem with that, but this is a form prescribed
by the board. If the information isn't correctly documented,
that person can go back to the board because it was fraud or it
wasn't properly explained, Mr. Van Hemert asserted. He
concluded, "I would have to say, at this point in time, that I
think management would object and not support the bill if this
was completely taken out. I think we made a compromise to
(indisc.) 'after medical stability,' and I think that's where
we'd like to leave it."
CHAIRMAN KOTT noted that there was an objection to Amendment 2.
A roll call vote was taken. Voting to adopt Amendment 2 were
Representatives Croft, Kerttula and Kott. Voting against it were
Representatives Murkowski, Rokeberg and James. [Representative
Green was absent.] Therefore, Amendment 2 failed by a vote of 3-
3.
Number 2414
REPRESENTATIVE CROFT made a motion to adopt Amendment 3, to
replace "$177,000" on page 10, line 9, with "$189,662". He
explained that on page 10, line 9, the amount of $135,000 had
been changed to $177,000; however, the legislative audit on the
Workers' Compensation Division, on page 43, says that "the value
of the 1988 whole-body compensation of $135,000 would equal
$189,662 in today's dollars." Representative Croft emphasized
the need to update for inflation correctly. He added to the
amendment, "I guess I'll combine it, that that number, the
reemployment number of $13,300 and the funeral number of $3,300
be indexed for inflation." He suggested these should be at the
appropriate number and then indexed so that the legislature
doesn't have to mess with this every five, ten or twenty years.
Number 2448
REPRESENTATIVE ROKEBERG objected to Amendment 3. He provided the
following reasons: the committee had just done away with
indexing on another bill; the amendment is incomplete in terms of
what index is being used or how it would be calculated; there is
no footnote showing the calculation [in the audit], which he
suggested is a "throwaway figure" without support for the dollar
figure; the calculation is based on "the delicate negotiations in
the ad hoc committee"; and the amendment would kill the bill.
TAPE 00-46, SIDE B
Number 0001
REPRESENTATIVE JAMES explained that she had struggled to say "no"
on that last amendment because of testimony that management would
pull out of it. Now, if she does something on [Amendment 3], the
other side will be "out of balance." She announced that she
wasn't interested in doing any more amendments.
REPRESENTATIVE CROFT said that was his last one anyway. He then
emphasized the need to look at these to see whether they make
public policy sense and, more importantly, to see whether they
strike the right balance. Although it is fine to have an ad hoc
group provide a proposal, he said, it is objectionable to him to
have that group insist upon that as the only proposal the
legislature can look at. As for killing the bill, the only thing
that can do that is lack of votes in the House and Senate. He
again emphasized the need to approach this on its merits, not
merely on whether it has the stamp of labor or business.
Number 0084
REPRESENTATIVE ROKEBERG, in response to a query from Chairman
Kott, affirmed that he maintained his objection. He said the
bill has been amended in the previous committee and this one, and
he doesn't buy that argument.
CHAIRMAN KOTT pointed out that as these bills have come before
the legislature in the past, they have tinkered with them to some
degree, "but there have never been any substantive changes from
both the ad hoc committee or the WCCA group." He said he had sat
in on some of those meetings. However, this bill has a House
Finance Committee referral, and his own vote will reflect [the
desire to have it] go on to that committee to deal with that
particular issue.
A roll call vote was taken. Voting to adopt Amendment 3 was
Representative Croft. Voting against it were Representatives
Kerttula, Rokeberg, Murkowski and Kott. [Representatives Green
and James were not present.] Therefore, Amendment 3 failed by a
vote of 4-1.
Number 0135
REPRESENTATIVE KERTTULA offered Amendment 4, to delete Section 20
of the bill.
REPRESENTATIVE JAMES objected.
CHAIRMAN KOTT said he couldn't recall whether earlier testimony
had indicated that inclusion of Section 20 would diminish support
from both sides.
REPRESENTATIVE ROKEBERG responded, "In the affirmative."
Number 0160
REPRESENTATIVE KERTTULA replied that she believes that is a
terrible argument, but she doesn't know, for instance, what
religious nonmedical nursing services encompasses. It is too
amorphous. For that reason, she would like to see it deleted.
REPRESENTATIVE ROKEBERG remarked that testimony of the director
of the Division of Workers' Compensation was that they weren't
sure what the cost ramifications would be.
REPRESENTATIVE KERTTULA acknowledged that testimony, but
specified that the argument she likes is that she doesn't know
what these items are or what the impact will be. She feels very
uncomfortable including [Section 20].
REPRESENTATIVE JAMES affirmed that she maintained her objection.
A roll call vote was taken. Voting to adopt Amendment 4 were
Representatives Kerttula, Rokeberg, Murkowski and Kott. Voting
against it were Representatives James and Croft. [Representative
Green was absent.] Therefore, Amendment 4, deleting Section 20,
was adopted by a vote of 4-2.
Number 0261
REPRESENTATIVE ROKEBERG offered conceptual Amendment 5. Noting
that page 5, line 31, says "a statement may be in a form
prescribed or approved by the board", he specified that the
amendment would be to insert, following "board", the phrase "and
include a statement informing the applicant that it should seek
legal counsel before waiver, in a follow-up statement."
REPRESENTATIVE CROFT commented, "Take out the board and put in
the lawyers."
AN UNIDENTIFIED MEMBER asked whether it would be "should" or
"may."
REPRESENTATIVE ROKEBERG responded, "Should."
Number 0290
CHAIRMAN KOTT objected to the motion.
REPRESENTATIVE ROKEBERG explained that this had been discussed in
the House L&C Committee by others too, just as a form to make
sure that people who were waiving [their rights] were notified.
CHAIRMAN KOTT said he thinks it is a good idea but he would
probably hold the bill over in order to check with a few people.
REPRESENTATIVE ROKEBERG responded that in that case, he would
just remove the amendment. [Amendment 5 was thus withdrawn.]
Number 0325
REPRESENTATIVE KERTTULA made a motion to move CSHB 419(L&C), as
amended, from the committee with individual recommendations and
the attached fiscal notes. There being no objection, CSHB
419(JUD) moved from the House Judiciary Standing Committee.
CHAIRMAN KOTT indicated he was adjourning the meeting at 4:15
p.m. but called the meeting back to order almost immediately
thereafter in order to take up another bill.
HB 58 - OIL & GAS AUDITS
CHAIRMAN KOTT announced that the final order of business would be
HOUSE BILL NO. 58, "An Act relating to certain audits regarding
oil and gas royalty and net profits and to audits regarding costs
relating to exploration incentive credits and oil and gas
exploration licenses; and providing for an effective date."
Number 0342
CAROL CARROLL, Director, Central Office, Division of Support
Services, Department of Natural Resources, came forward to
explain HB 58. She advised members that the bill simply
transfers some oil and gas auditors from the Department of
Revenue back to the Department of Natural Resources. Both
departments agree this should be done, and it will increase
efficiency and productivity. She noted that Mike Barnhill was
present from the Department of Law to answer legal questions.
[End of tape 00-46; no testimony is missing.]
TAPE 00-47, SIDE A
REPRESENTATIVE KERTTULA asked if the written amendment in packets
was necessary to change the title. That amendment read:
Change title by adding the underlined
An Act relating to certain audits regarding oil and gas
royalty and net profits and to audits regarding costs
relating to exploration incentive credits and oil and
gas exploration licenses; repealing the notice
requirement for the issuance of final written findings
regarding sale, lease, or disposal of an interest in
state land or resources for oil and gas subject to AS
38.05.180(b); and providing for an effective date.
Add to page 4 line 28 the underlined
Sec. 7. AS 38.05.036(d), 38.05.036(e),
38.05.945(a)(3)(B), and AS 43.05.010(15) are repealed.
MS. CARROLL answered that it is an amendment from the department,
but she didn't necessarily believe it had to be adopted because
HB 259, which is in this committee, does the same thing. She
then advised members that since [HB 58] was introduced last year,
it has an effective date of 1999 that, if the committee wishes,
should be changed to 2000.
CHAIRMAN KOTT noted that his staff had pointed that out to him
earlier. [It was then indicated that a proposed committee
substitute (CS) had already been requested regarding the updated
effective date.]
Number 0167
REPRESENTATIVE JAMES made a motion to move HB 58 from the
committee with individual recommendations and the attached zero
fiscal note. There being no objection, it was so ordered and
[because of the technical amendment changing the effective date]
CSHB 58(JUD) was moved from the House Judiciary Standing
Committee.
ADJOURNMENT
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 4:20 p.m.
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