Legislature(2015 - 2016)BILL RAY CENTER 208

06/06/2016 08:00 AM LABOR & COMMERCE

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Audio Topic
10:05:01 AM Start
10:05:16 AM HB4002
10:56:40 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 10:00 a.m. Today --
Waived Out of Committee
-- Testimony <Invitation Only> --
**Streamed live on AKL.tv**
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                          June 6, 2016                                                                                          
                           10:05 a.m.                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Kurt Olson, Chair                                                                                                
Representative Shelley Hughes, Vice Chair                                                                                       
Representative Jim Colver                                                                                                       
Representative Gabrielle LeDoux                                                                                                 
Representative Cathy Tilton                                                                                                     
Representative Andy Josephson                                                                                                   
Representative Sam Kito                                                                                                         
MEMBERS ABSENT                                                                                                                
Representative Mike Chenault (alternate)                                                                                        
OTHER LEGISLATORS PRESENT                                                                                                     
Representative Lora Reinbold                                                                                                    
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 4002                                                                                                             
"An Act  relating to major  medical insurance coverage  under the                                                               
Public  Employees'  Retirement  System   of  Alaska  for  certain                                                               
surviving spouses  and dependent  children of peace  officers and                                                               
firefighters; and providing for an effective date."                                                                             
     - WAIVED OUT OF COMMITTEE                                                                                                  
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 4002                                                                                                                 
SHORT TITLE: INS. FOR DEPENDS. OF DECEASED FIRE/POLICE                                                                          
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
05/23/16       (H)       READ THE FIRST TIME - REFERRALS                                                                        
05/23/16       (H)       L&C, FIN                                                                                               
05/26/16       (H)       L&C AT 11:00 AM BILL RAY CENTER 208                                                                    
05/26/16       (H)       Heard & Held                                                                                           
05/26/16       (H)       MINUTE(L&C)                                                                                            
05/31/16       (H)       L&C AT 1:15 PM BILL RAY CENTER 208                                                                     
05/31/16       (H)       -- MEETING CANCELED --                                                                                 
06/01/16       (H)       L&C AT 1:15 PM BILL RAY CENTER 208                                                                     
06/01/16       (H)       Heard & Held                                                                                           
06/01/16       (H)       MINUTE(L&C)                                                                                            
06/02/16       (H)       L&C AT 1:15 PM BILL RAY CENTER 208                                                                     
06/02/16       (H)       -- MEETING CANCELED --                                                                                 
06/03/16       (H)       L&C AT 11:00 AM BILL RAY CENTER 208                                                                    
06/03/16       (H)       Heard & Held                                                                                           
06/03/16       (H)       MINUTE(L&C)                                                                                            
06/04/16       (H)       L&C AT 11:00 AM BILL RAY CENTER 208                                                                    
06/04/16       (H)       Heard & Held                                                                                           
06/04/16       (H)       MINUTE(L&C)                                                                                            
06/06/16       (H)       L&C AT 8:00 AM BILL RAY CENTER 208                                                                     
WITNESS REGISTER                                                                                                              
MARIE MARKS, Director                                                                                                           
Division of Workers' Compensation                                                                                               
Department of Labor & Workforce Development                                                                                     
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions  during the hearing on HB                                                             
SCOTT JORDAN, Director                                                                                                          
Division of Risk Management                                                                                                     
Department of Administration                                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions  during the hearing on HB                                                             
KONRAD JACKSON, Staff                                                                                                           
Representative Kurt Olson                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Speaking on  behalf of Representative Olson,                                                             
answered questions during the hearing on HB 4002.                                                                               
ACTION NARRATIVE                                                                                                              
10:05:01 AM                                                                                                                   
CHAIR KURT  OLSON called  the House  Labor and  Commerce Standing                                                             
Committee meeting to order at  10:05 a.m.  Representatives Olson,                                                               
Colver, Tilton, Kito,  Josephson, and LeDoux were  present at the                                                               
call to order.  Representative  Hughes arrived as the meeting was                                                               
in progress.  Also present was Representative Reinbold.                                                                         
        HB4002-INS. FOR DEPENDS. OF DECEASED FIRE/POLICE                                                                    
10:05:16 AM                                                                                                                   
CHAIR OLSON  announced that the  only order of business  would be                                                               
HOUSE BILL NO. 4002, "An  Act relating to major medical insurance                                                               
coverage under the Public Employees'  Retirement System of Alaska                                                               
for  certain surviving  spouses and  dependent children  of peace                                                               
officers and firefighters; and providing for an effective date."                                                                
10:06:47 AM                                                                                                                   
MARIE  MARKS,   Director,  Division  of   Workers'  Compensation,                                                               
Department  of  Labor &  Workforce  Development,  in response  to                                                               
Chair  Olson,  said  the  division  is  researching  data  on  22                                                               
fatalities in  2015 in  order to determine  the number  of police                                                               
officers, firefighters, or State of Alaska employees.                                                                           
CHAIR  OLSON said  the completed  data  will be  provided to  the                                                               
House Finance Committee.  He  then asked for information on death                                                               
benefits provided under workers' compensation.                                                                                  
MS.  MARKS informed  the committee  that under  the terms  of the                                                               
Alaska  Workers' Compensation  Act,  when an  employee suffers  a                                                               
work-related [death],  the Act provides  certain benefits  to the                                                               
surviving  spouse   and  any  eligible  dependents   as  follows:                                                               
reasonable and necessary funeral  expenses not exceeding $10,000;                                                               
a lump  sum payment  of $5,000  paid to  the surviving  spouse or                                                               
equally  divided among  surviving  children;  an ongoing  benefit                                                               
paid to  the surviving spouse  and children, which  is calculated                                                               
on  the number  of surviving  children,  and is  paid for  twelve                                                               
years  unless the  spouse remarries  or  reaches retirement  age.                                                               
The benefit  is paid  to the children  until they  reach nineteen                                                               
years of age, or for four more years if attending college.                                                                      
CHAIR  OLSON  asked  whether  the   calculation  is  based  on  a                                                               
percentage of the decedent's salary.                                                                                            
MS. MARKS  said the calculation is  based on a percentage  of the                                                               
spendable  weekly wage.    A surviving  spouse  with no  children                                                               
would receive  80 percent;  if there were  one child,  the spouse                                                               
would  receive  50  percent,  and  the  child  would  receive  40                                                               
percent.   For example, if  an employee earned an  average weekly                                                               
wage of $1,076, the widow or  widower would receive $673 per week                                                               
and the  child would receive $538  per week.  There  is a maximum                                                               
payable for  benefits under workers'  compensation of  $1,211 per                                                               
CHAIR OLSON  asked whether workers' compensation  could subrogate                                                               
payments from an accidental death policy.                                                                                       
10:10:25 AM                                                                                                                   
MS. MARKS  stated that workers'  compensation death  payments are                                                               
paid  regardless of  other  insurance;  however, Social  Security                                                               
Administration  (Social  Security)  payments  may  be  offset  in                                                               
certain circumstances.                                                                                                          
REPRESENTATIVE COLVER  questioned whether there is  an offset for                                                               
children  who  get  Social  Security  benefits  from  a  deceased                                                               
MS.  MARKS said  payments may  be  reduced by  a Social  Security                                                               
offset, and offered to research this issue.                                                                                     
REPRESENTATIVE JOSEPHSON restated that  if the deceased is single                                                               
without  dependents,  their  estate  would  receive  $10,000  for                                                               
expenses, and there would be no other compensation.                                                                             
MS. MARKS affirmed that benefits  are payable to dependents, thus                                                               
if  there  are  no  dependents,  the  benefit  would  be  funeral                                                               
expenses up to $10,000.                                                                                                         
REPRESENTATIVE JOSEPHSON posited that in  the case of an accident                                                               
that  causes the  death of  a single  person without  dependents,                                                               
there  could be  an Occupational  Safety &  Health Administration                                                               
(OSHA), U.S. Department  of Labor, violation, but  there would be                                                               
no further investigation.                                                                                                       
MS.  MARKS confirmed  that the  Alaska Workers'  Compensation Act                                                               
"is the  exclusive liability for workplace,  workplace injuries."                                                               
In  the example  of a  workplace injury  to an  employee with  no                                                               
dependents to  file a claim,  no benefits  would be payable.   In                                                               
further response to Representative Josephson, she remarked:                                                                     
     Under the  Alaska workers' comp. Act,  that is correct.                                                                    
     It is the  exclusive remedy position.   In exchange for                                                                    
     giving  up  the  right  to bring  a  tort  action,  the                                                                    
     dependents  who  are  making  claims  do  not  have  to                                                                    
     provide, or prove, fault.  Or damages, sorry.                                                                              
REPRESENTATIVE   COLVER   clarified   that   the   aforementioned                                                               
provision  of  workers'  compensation  applies  to  any  employee                                                               
MS.  MARKS explained  that the  Alaska Workers'  Compensation Act                                                               
provides benefits  to dependents.   Regarding dependents  who are                                                               
seeking to recover outside the Act,  she said she was unsure what                                                               
dependents' causes of action would be outside of the Act.                                                                       
10:15:35 AM                                                                                                                   
CHAIR OLSON  inquired as to  whether Ms. Marks was  familiar with                                                               
the [remote  site doctrine] which provides  workers' compensation                                                               
coverage to  workers in  remote sites,  such as  the Trans-Alaska                                                               
Pipeline  System and  canneries.   He asked  whether workers  are                                                               
covered "24 hours" when working at a remote site.                                                                               
MS. MARKS said correct.                                                                                                         
There followed  discussion of an  incident at a remote  site, and                                                               
other issues not pertinent to the bill.                                                                                         
REPRESENTATIVE KITO  returned discussion  to coverage  for police                                                               
and  firefighters,   and  asked  whether   workers'  compensation                                                               
provides  a   health  care  benefit   to  surviving   spouses  or                                                               
MS.  MARKS  advised  that  it  does not  provide  a  health  care                                                               
benefit, but  does provide  a continuing  monetary benefit  to be                                                               
used as the surviving spouse sees fit.                                                                                          
REPRESENTATIVE KITO restated that  the bill addresses health care                                                               
benefits  to surviving  spouses  and  dependents, independent  of                                                               
what  workers' compensation  provides.   Although there  are cash                                                               
payments,  he   questioned  the  expectation  that   spouses  and                                                               
dependents  would  be  able  to  use  that  money  for  expensive                                                               
insurance,  when an  existing insurance  plan is  available.   He                                                               
     It does seems  like we have a bill in  front of us that                                                                    
     addresses that,  and I don't  know that,  that workers'                                                                    
     compensation is  the place where  we need to  be really                                                                    
     discussing it ...  we've got a bill  that addresses it,                                                                    
     I think that's very clear, in front of us.                                                                                 
10:20:27 AM                                                                                                                   
SCOTT JORDAN,  Director, Division of Risk  Management, Department                                                               
of Administration  (DOA), in  response to  Chair Olson,  said the                                                               
committee  has heard  correct  answers to  all  of the  questions                                                               
related to workers' compensation.                                                                                               
REPRESENTATIVE  JOSEPHSON posed  the situation  of a  trooper who                                                               
was killed  in an accident, when  not specifically on the  job or                                                               
of a criminal nature, and asked  whether HB 4002 would apply, and                                                               
if there would be coverage for the dependents.                                                                                  
MR. JORDAN  advised that a  trooper at  a remote site  is covered                                                               
[twenty-four hours  per day,  seven days  per week  (24/7)] under                                                               
workers' compensation for injury or loss of life.                                                                               
REPRESENTATIVE JOSEPHSON  clarified his  question is that  if the                                                               
death was  not of a  criminal nature, is the  bill comprehensive,                                                               
and whether it would cover the dependents.                                                                                      
MR.  JORDAN expressed  his understanding  that the  bill provides                                                               
coverage for  a work-related  injury or death;  thus at  a remote                                                               
site,  in the  case  of loss  of life,  there  would be  worker's                                                               
compensation death benefits,  "and I would assume  that this bill                                                               
would, would then come into play."                                                                                              
CHAIR OLSON observed that [troopers  and wildlife officers] often                                                               
take vehicles home,  and asked if a fatal  accident off-duty with                                                               
a state vehicle would be covered.                                                                                               
MR. JORDAN said an employee  in a state-issued vehicle is covered                                                               
until they leave the vehicle.                                                                                                   
REPRESENTATIVE LEDOUX asked whether this  issue is relative to HB                                                               
CHAIR OLSON  explained that  the committee needs  to look  all of                                                               
the benefits available  to one involved in a  fatal incident, and                                                               
workers' compensation is a portion of that.                                                                                     
REPRESENTATIVE  COLVER  suggested  that  the  chair  provide  the                                                               
committee an oral report on  the forthcoming committee substitute                                                               
(CS) for HB 4002.                                                                                                               
CHAIR  OLSON  stated  his  intention   to  release  the  CS  this                                                               
REPRESENTATIVE  KITO asked  who  requested the  CS  and what  the                                                               
issues are involved, because he  had not heard any comments about                                                               
issues in  the bill that  need to be  addressed.  He  pointed out                                                               
the slow  pace of hearings on  what he characterized as  a simple                                                               
bill, and that  if there are changes that have  been requested by                                                               
the chair, the committee needs to be informed.                                                                                  
10:27:42 AM                                                                                                                   
KONRAD JACKSON, Staff to Representative  Kurt Olson, Alaska State                                                               
Legislature,   speaking  on   behalf  of   Representative  Olson,                                                               
explained that some  of the changes made by the  CS will be minor                                                               
technical changes  that are usually  sought by  Legislative Legal                                                               
Services, Legislative Affairs Agency,  to bills that were drafted                                                               
by the Department  of Law, including drafting  and style changes.                                                               
The first change is a time limit  of 10 years to the benefits for                                                               
surviving spouses, which was based  on provisions from some other                                                               
states.   The other change  is that  in the event  of remarriage,                                                               
the surviving  spouse would  no longer  qualify for  free medical                                                               
REPRESENTATIVE  JOSEPHSON surmised  the intent  of the  CS is  to                                                               
meld  concepts  in workers'  compensation  with  the health  care                                                               
death benefit of HB 4002.                                                                                                       
MR.  JACKSON  said there  was  no  intention to  mirror  workers'                                                               
compensation  as  relates  to  the   children,  and  the  current                                                               
language of the bill remains unchanged in that regard.                                                                          
REPRESENTATIVE LEDOUX said she wished  to see the bill advance in                                                               
its  present form,  and  inquired how  the  chair would  schedule                                                               
CHAIR OLSON  responded that amendments  would be  scheduled after                                                               
24  hours.   He  further  explained  that  13 other  states  have                                                               
similar legislation,  and the drafters  took an average  of other                                                               
states' coverage.   The way  the bill  is written now,  one could                                                               
have full medical  up to age 65,  and at that point  in time have                                                               
secondary  insurance.   Regarding the  pace of  the hearings,  he                                                               
pointed  out that  the committee  waited one  year for  the first                                                               
fiscal note,  which he understood to  be about $60 million.   Two                                                               
fiscal notes and  two actuarial studies were  received within the                                                               
last month.                                                                                                                     
REPRESENTATIVE LEDOUX  questioned whether the $60  million fiscal                                                               
note was for  a previous iteration of the bill  and was unrelated                                                               
to the "very narrow" bill before the committee.                                                                                 
10:31:58 AM                                                                                                                   
CHAIR OLSON said:                                                                                                               
     I haven't seen  that fiscal note, but  this one doesn't                                                                    
     include any  other state employees other  than the ones                                                                    
     that  are  listed in  the  current  policy.   The  only                                                                    
     changes that Konrad  just laid out are made  out to ...                                                                    
     the  bill  as  before  us, it  doesn't  add  any  other                                                                    
     classes, it  doesn't change any  of the  definitions of                                                                    
     employees, it's just straight spouse support.                                                                              
REPRESENTATIVE   COLVER  said   he  cannot   support  a   10-year                                                               
limitation on  benefits, because the families'  circumstances are                                                               
unknowable.  He  opined the benefits are  a moral - as  well as a                                                               
financial - obligation to those who  have lost their lives in the                                                               
line  of  duty;  furthermore,  in  today's  world  families  need                                                               
insurance  coverage  for  children  to age  26.    Representative                                                               
Colver expressed his preference to support the original version.                                                                
10:33:57 AM                                                                                                                   
CHAIR OLSON recalled that the bill  had one hearing in the Senate                                                               
in two  years because there  was not a lot  of support.   He said                                                               
his  goal is  to  advance a  bill  that would  be  passed to  the                                                               
Senate, and opined  that HB 4002 would not pass  out of the House                                                               
Finance Committee.                                                                                                              
REPRESENTATIVE JOSEPHSON  agreed with  the foregoing  comments of                                                               
Representatives  LeDoux and  Colver.   He  recalled that  related                                                               
legislation  proposed  in  2014  was  designed  to  do  what  the                                                               
previous administration  was already doing  administratively, and                                                               
received  a   tremendous  amount   of  coverage  by   the  media.                                                               
Representative  Josephson   cautioned  that   legislators  cannot                                                               
"assert that this has caught them  unawares," and said that it is                                                               
time to move the bill.                                                                                                          
10:36:16 AM                                                                                                                   
[The committee took an at ease from 10:36 a.m. to 10:54 a.m.]                                                                   
10:54:32 AM                                                                                                                   
CHAIR  OLSON  announced  that  a  waiver of  the  bill  would  be                                                               
circulated for committee members' signatures.                                                                                   
[Although a  formal motion was not  made, HB 4002 was  waived out                                                               
of committee.]                                                                                                                  
10:54:39 AM                                                                                                                   
The committee took an at ease from 10:54 a.m. to 10:56 a.m.                                                                     
10:56:40 AM                                                                                                                   
There being no further business before the committee, the House                                                                 
Labor and Commerce Standing Committee meeting was adjourned at                                                                  
10:56 a.m.                                                                                                                      

Document Name Date/Time Subjects
HB4002 Opposing Documents-Email Tim Staton 06-04-16.pdf HL&C 6/6/2016 8:00:00 AM
HB4002 Opposing Documents-Email John and Candy Miller 06-04-16.pdf HL&C 6/6/2016 8:00:00 AM
HB4002 Supporting Documents-Assorted Emails 06-06-16.pdf HL&C 6/6/2016 8:00:00 AM
HB4002 Supporting Documents-Assorted Emails and Letters 06-05-16.pdf HL&C 6/6/2016 8:00:00 AM