00 SENATE BILL NO. 278 01 "An Act relating to the Alaska Workers' Compensation Act, including the weekly 02 rate of compensation and minimum and maximum compensation rates, specifying 03 components of a reemployment plan, adjusting benefits for permanent partial 04 impairment, for reemployment plans, for rehabilitation benefits, for widows, 05 widowers and orphans, and for funerals, calculation of gross weekly earnings for 06 seasonal and temporary workers and for workers with overtime or premium pay, 07 setting time limits for requesting a hearing or rehabilitation benefits, setting time 08 limits for claims for compensation and for the rehabilitation process, setting time 09 limits for payment of medical bills, waiver of rehabilitation benefits, obtaining 10 medical releases and resolving discovery disputes, setting an interest rate for late 11 compensation, and providing for updating the medical fee schedule; and providing 12 for an effective date." 13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 14 * Section 1. The uncodified law of the State of Alaska is amended by adding a new 01 section to read: 02 LEGISLATIVE FINDINGS. (a) The legislature affirms its intent stated in sec. 1(a), 03 ch. 79, SLA 1988, that AS 23.30 be interpreted so as to ensure the quick, efficient, fair, and 04 predictable delivery of indemnity and medical benefits to injured workers at a reasonable cost 05 to the employers who are subject to the provisions of AS 23.30. 06 (b) The legislature affirms its intent stated in sec. 1(b), ch. 79, SLA 1988, that the 07 workers' compensation laws must not be construed by the courts in favor of any party and 08 it is the specific intent of the legislature that workers' compensation cases be decided on the 09 merits, except when otherwise provided by statute. 10 (c) It is the intent of the legislature to tie increases in benefits under AS 23.30 to the 11 State of Alaska's Alaska average weekly wage so as to more fairly compensate injured 12 workers. However, it is the intent of the legislature that the benefit rate in effect at the time 13 of injury remains the benefit rate for the life of the claim without regard to any changes that 14 may occur in the Alaska average weekly wage subsequent to the year of injury of the worker. 15 (d) It is the intent of the legislature in amending AS 23.30.041 to clarify existing 16 language and to mandate compliance by the Workers' Compensation Board, the reemployment 17 administrator, and the parties with deadlines contained in AS 23.30. It is further the intent 18 of the legislature to reinforce that vocational rehabilitation is a voluntary process under 19 AS 23.30 that allows claimants to waive their rights to receive reemployment benefits. It is 20 the intent of the legislature that claimants be entitled to permanent impairment benefits and 21 reduced compensation under AS 23.30 while involved in the reemployment process so as to 22 encourage injured workers to complete that process as quickly as possible and return to the 23 work place in an expeditious and efficient manner. 24 (e) It is the intent of the legislature that workers' compensation claimants provide 25 releases of information so that employers and insurers and their agents can promptly obtain 26 information needed to investigate and adjust claims under AS 23.30. It remains the 27 legislature's intent that medical information relevant to a claim is discoverable and should be 28 promptly provided. It is further the intent of the legislature to facilitate discovery and in so 29 doing encourage the quick and efficient resolution of discovery disputes under AS 23.30. 30 * Sec. 2. AS 23.30.041(g) is amended to read: 31 (g) Within 15 [10] days after the employee receives the administrator's 01 notification of eligibility for benefits, an employee who desires to use these benefits 02 shall give written notice to the employer of the employee's selection of a rehabilitation 03 specialist who shall provide a complete reemployment benefits plan. Failure to give 04 notice required by this subsection constitutes noncooperation under (n) of this 05 section. If the employer disagrees with the employee's choice of rehabilitation 06 specialist to develop the plan and the disagreement cannot be resolved, then the 07 administrator shall assign a rehabilitation specialist. The employer and employee each 08 have one right of refusal of a rehabilitation specialist. 09 * Sec. 3. AS 23.30.041(h) is amended to read: 10 (h) Within 90 days after the rehabilitation specialist's selection under (g) of 11 this section, the reemployment plan must be formulated and approved. The 12 reemployment plan must require continuous participation by the employee and 13 must maximize the usage of the employee's transferrable skills. The reemployment 14 plan must include at least the following: 15 (1) a determination of the occupational goal in the labor market; 16 (2) an inventory of the employee's technical skills, transferrable skills, 17 physical and intellectual capacities, academic achievement, emotional condition, and 18 family support; 19 (3) a plan to acquire the occupational skills to be employable; 20 (4) the cost estimate of the reemployment plan, including provider fees; 21 the amount of tuition, books, tools, and supplies; transportation; temporary lodging; or 22 job modification devices; 23 (5) the estimated length of time that the plan will take; 24 (6) the date that the plan will commence; 25 (7) the estimated time of medical stability as predicted by a treating 26 physician, or by a physician who has examined the employee at the request of the 27 employer or the board or by referral of the treating physician; 28 (8) a detailed description and plan schedule; and 29 (9) a finding by the rehabilitation specialist that the inventory under (2) 30 of this subsection indicates that the employee can be reasonably expected to 31 satisfactorily complete the plan and perform in a new occupation within the time and 01 cost limitations of the plan. 02 * Sec. 4. AS 23.30.041(k) is amended to read: 03 (k) Benefits related to the reemployment plan may not extend past two years 04 from date of plan approval or acceptance, whichever date occurs first, at which time 05 the benefits expire. If an employee reaches medical stability before completion of the 06 plan, temporary total disability benefits shall cease and permanent impairment benefits 07 shall then be paid at the employee's temporary total disability rate. If the employee's 08 permanent impairment benefits are exhausted before the completion or termination of 09 the reemployment plan, the employer shall provide compensation [WAGES] equal to 10 70 [60] percent of the employee's spendable weekly wages but not to exceed 105 11 percent of the average weekly wage, [$525] until the completion or termination of 12 the plan except that any compensation paid under this subsection is reduced by 13 wages earned by the employee while participating in the plan to the extent that 14 the wages earned, when combined with the compensation paid under this 15 subsection, exceed the employee's temporary total disability rate. If permanent 16 partial disability benefits have been paid in a lump sum before the employee 17 requested or was found eligible for reemployment benefits, payment of benefits 18 under this subsection is suspended until permanent partial disability benefits 19 would have ceased had those benefits been paid at the employee's temporary total 20 disability rate, notwithstanding the provisions of AS 23.30.155(j) . A permanent 21 impairment benefit remaining unpaid upon the completion or termination of the plan 22 shall be paid to the employee in a single lump sum. A employee may not be 23 considered permanently totally disabled so long as the employee is involved in the 24 rehabilitation process under this chapter. The fees of the rehabilitation specialist 25 or rehabilitation professional shall be paid by the employer and may not be included 26 in determining the cost of the reemployment plan. 27 * Sec. 5. AS 23.30.041(l) is amended to read: 28 (l) The cost of the reemployment plan incurred under this section shall be the 29 responsibility of the employer, shall be paid on an expense incurred basis, and may not 30 exceed $13,300 [$10,000]. 31 * Sec. 6. AS 23.30.041(n) is amended to read: 01 (n) After the employee has elected to participate in reemployment benefits, if 02 the employer believes the employee has not cooperated the employer may terminate 03 reemployment benefits on the date of noncooperation. Noncooperation means 04 unreasonable failure to 05 (1) keep appointments; 06 (2) maintain passing grades; 07 (3) attend designated programs; 08 (4) maintain contact with the rehabilitation specialist; 09 (5) cooperate with the rehabilitation specialist in developing a 10 reemployment plan and participating in activities relating to reemployability on a 11 full-time basis; 12 (6) comply with the employee's responsibilities outlined in the 13 reemployment plan; [OR] 14 (7) participate in any planned reemployment activity as determined by 15 the administrator ; or 16 (8) give written notice to the employer of the employee's choice of 17 rehabilitation specialist within 15 days after receiving notice of eligibility for 18 benefits from the administrator as required by (g) of this section . 19 * Sec. 7. AS 23.30.041 is amended by adding a new subsection to read: 20 (r) Notwithstanding AS 23.30.012, an employee may waive, at any time, any 21 benefits or rights under this section, including an eligibility evaluation and benefits 22 related to a reemployment plan. To waive any benefits or rights under this section, 23 an employee must file a statement under oath with the board to notify the parties of 24 the waiver and to specify the scope of benefits or rights that the employee seeks to 25 waive. The statement must be on a form prescribed or approved by the board. The 26 board shall serve the notice of waiver on all parties to the claim within 10 days after 27 filing. The waiver is effective upon service to the party. A waiver effective under this 28 subsection discharges the liability of the employer for the benefits or rights contained 29 in this section. The waiver may not be modified under AS 23.30.130. 30 * Sec. 8. AS 23.30.095(f) is amended to read: 31 (f) All fees and other charges for medical treatment or service shall be subject 01 to regulation by the board but may not exceed usual, customary, and reasonable fees 02 for the treatment or service in the community in which it is rendered, as determined 03 by the board. An employee may not be required to pay a fee or charge for medical 04 treatment or service. The board shall adopt updated usual, customary, and 05 reasonable medical fee schedules at least once each year. 06 * Sec. 9. AS 23.30.095 is amended by adding new subsections to read: 07 (l) An employer shall make payment for medical bills for an employee's 08 treatment under this chapter, excluding prescription charges or transportation for 09 medical treatment, within 30 days after the date that the employer received the later 10 of the medical provider's bill or a completed report. The report for an employee's 11 medical treatment should preferably be done by the medical provider on a form 12 prescribed by the board. 13 (m) Unless the employer controverts a charge, an employer shall reimburse an 14 employee's prescription charges under this chapter within 30 days after the employer 15 received the medical provider's completed report and an itemization of the prescription 16 charges for the employee. Unless the employer controverts a charge, an employer 17 shall reimburse any transportation expenses for medical treatment under this chapter 18 within 30 days after the employer received the medical provider's completed report 19 and an itemization of the dates, destination, and transportation expenses for each date 20 of travel for medical treatment. If the employer does not plan to make or does not 21 make payment or reimbursement in full in accordance with this subsection, the 22 employer shall notify in writing the employee and the employee's medical provider 23 that payment will not be timely made and the reasons for the nonpayment. The 24 notification must be provided on or before the date on which payment is due under this 25 section. 26 * Sec. 10. AS 23.30.105 is amended to read: 27 (a) The right to compensation for disability under this chapter is barred unless 28 a claim for it is filed within two years after the employee has knowledge of the nature 29 of the employee's disability and its relation to the employment and after disablement. 30 However, the maximum time for filing the claim in any event other than arising out 31 of an occupational disease shall be four years from the date of injury, and the right to 01 compensation for death is barred unless a claim therefor is filed within one year after 02 the death, except that if payment of compensation has been made without an award on 03 account of the injury or death, a claim may be filed within two years after the date of 04 the last payment of benefits under AS 23.30.041, 23.30.180 [AS 23.30.180], 23.30.185, 05 23.30.190, 23.30.200, or 23.30.215. It is additionally provided that, in the case of 06 latent defects pertinent to and causing compensable disability, the injured employee has 07 full right to claim as shall be determined by the board, time limitations 08 notwithstanding. 09 * Sec. 11. AS 23.30.107(a) is amended to read: 10 (a) Upon written request, an employee shall provide written authority to the 11 employer, carrier, rehabilitation specialist, or reemployment benefits administrator to 12 obtain medical and rehabilitation information relative to the employee's injury. The 13 request must include notice of the employee's right to file a petition for a 14 protective order with the board and must be served by certified mail to the 15 employee's address on the notice of injury or by hand delivery to the employee. 16 * Sec. 12. AS 23.30 is amended by adding a new section to read: 17 Sec. 23.30.108. Prehearings on discovery matters; objections to requests 18 for release of information; sanctions for noncompliance. (a) If an employee 19 objects to a request for written authority under AS 23.30.107, the employee must file 20 a petition with the board seeking a protective order within 14 days after service of the 21 request. If the employee fails to file a petition and fails to deliver the written authority 22 in accordance with AS 23.30.107 within 14 days after service of the request, the 23 employee's rights to benefits under this chapter are suspended until the written 24 authority is delivered. 25 (b) If a petition seeking a protective order is filed, the board shall set a 26 prehearing within 21 days after the filing date of the petition. At a prehearing 27 conducted by the board's designee, the board's designee has the authority to resolve 28 disputes concerning release of information. If the board or the board's designee orders 29 delivery of the written authority and if the employee refuses to deliver it within 10 30 days after being ordered to do so, the employee's rights to benefits under this chapter 31 are suspended until the written authority is delivered. The employee's benefits under 01 this chapter during any period of suspension under this section are forfeited unless the 02 board, or the court determining an action brought for the recovery of damages under 03 this chapter, determines that good cause existed for the refusal to provide the written 04 authority. 05 (c) At a prehearing on discovery matters conducted by the board's designee, 06 the board's designee shall direct parties to sign releases or produce documents, or both, 07 if the releases or documents are likely to lead to admissible evidence relative to an 08 employee's injury. If a party refuses to comply with an order by the board's designee 09 or the board concerning discovery matters, the board may impose appropriate sanctions 10 in addition to any forfeiture of benefits, including dismissing the party's claim, 11 petition, or defense. If a discovery dispute comes before the board for review of a 12 determination by the board's designee, the board may not consider any evidence or 13 argument that was not presented to the board's designee, but shall determine the issue 14 solely on the basis of the written record. The decision by the board on a discovery 15 dispute shall be made within 30 days. The board designee's decision shall be upheld 16 by the board, except when the board designee's determination is an abuse of discretion. 17 * Sec. 13. AS 23.30.110 is amended by adding a new subsection to read: 18 (h) The filing of a hearing request under (c) of this section suspends the 19 running of the two-year time period specified in (c) of this section. However, if the 20 employee subsequently requests a continuance of the hearing and the request is 21 approved by the board, the granting of the continuance renders the request for hearing 22 inoperative and the two-year time period specified in (c) of this section continues to 23 run again from the date of the board's notice to the employee of the board's granting 24 of the continuance and of its effect. If the employee fails to again request a hearing 25 before the conclusion of the two-year time period in (c) of this section, the claim is 26 denied. 27 * Sec. 14. AS 23.30.155 is amended by adding a new subsection to read: 28 (p) Interest is payable on all compensation that is not paid when due. Interest 29 shall be paid at the rate specified as AS 09.30.070(a). 30 * Sec. 15. AS 23.30.175(a) is amended to read: 31 (a) The weekly rate of compensation for disability or death may not exceed 01 the maximum compensation rate, may not be less than 22 percent of the 02 maximum compensation rate, [$700] and initially may not be less than $110. 03 However, if the board determines that the employee's spendable weekly wages are less 04 than $110 a week as computed under AS 23.30.220, or less than 22 percent of the 05 maximum compensation rate [$154] a week in the case of an employee who has 06 furnished documentary proof of the employee's wages, it shall issue an order adjusting 07 the weekly rate of compensation to a rate equal to the employee's spendable weekly 08 wages. If the employer can verify that the employee's spendable weekly wages are 09 less than 22 percent of the maximum compensation rate [$154], the employer may 10 adjust the weekly rate of compensation to a rate equal to the employee's spendable 11 weekly wages without an order of the board. If the employee's spendable weekly 12 wages are greater than 22 percent of the maximum compensation rate [$154], but 13 80 percent of the employee's spendable weekly wages is less than 22 percent of the 14 maximum compensation rate [$154], the employee's weekly rate of compensation 15 shall be 22 percent of the maximum compensation rate [$154]. Prior payments 16 made in excess of the adjusted rate shall be deducted from the unpaid compensation 17 in the manner the board determines. In any case, the employer shall pay timely 18 compensation. For purposes of this subsection, "maximum compensation rate" 19 means 120 percent of the Alaska average weekly wage, calculated under (d) of this 20 section, applicable on the date of injury of the employee. 21 * Sec. 16. AS 23.30.175 is amended by adding a new subsection to read: 22 (d) Before December 1 of each year, the commissioner of labor and workforce 23 development shall determine the Alaska average weekly wage by dividing the Alaska 24 average annual wage for the preceding calendar year by 52. The resulting figure is the 25 Alaska average weekly wage applicable for the period beginnining January 1, and 26 ending December 31, of the following calendar year. In this subsection, "Alaska 27 average annual wage" means the average annual wage, as computed by the Department 28 of Labor and Workforce Development, of all employees in the state, both public and 29 private, who are covered by this chapter. 30 * Sec. 17. AS 23.30.190(a) is amended to read: 31 (a) In case of impairment partial in character but permanent in quality, and not 01 resulting in permanent total disability, the compensation is $177,000 [$135,000] 02 multiplied by the employee's percentage of permanent impairment of the whole person. 03 The percentage of permanent impairment of the whole person is the percentage of 04 impairment to the particular body part, system, or function converted to the percentage 05 of impairment to the whole person as provided under (b) of this section. The 06 compensation is payable in a single lump sum, except as otherwise provided in 07 AS 23.30.041, but the compensation may not be discounted for any present value 08 considerations. 09 * Sec. 18. AS 23.30.215(a) is amended to read: 10 (a) If the injury causes death, the compensation is known as a death benefit 11 and is payable in the following amounts to or for the benefit of the following persons: 12 (1) reasonable and necessary funeral expenses not exceeding $3,300 13 [$2,500]; 14 (2) if there is a widow or widower or a child or children of the 15 deceased, the following percentages of the spendable weekly wages of the deceased: 16 (A) 80 percent for the widow or widower with no children; 17 (B) 50 [40] percent for the widow or widower with one child 18 and 40 percent for the child; 19 (C) 30 [25] percent for the widow or widower with two or more 20 children and 70 [55] percent divided equally among the children; 21 (D) 100 [80] percent for an only child when there is no widow 22 or widower; 23 (E) 100 [80] percent, divided equally, if there are two or more 24 children and no widow or widower; 25 (3) if the widow or widower remarries, the widow or widower is 26 entitled to be paid in one sum an amount equal to the compensation to which the 27 widow or widower would otherwise be entitled in the two years commencing on the 28 date of remarriage as full and final settlement of all sums due the widow or widower; 29 (4) if there is no widow or widower or child or children, then for the 30 support of father, mother, grandchildren, brothers and sisters, if dependent upon the 31 deceased at the time of injury, 42 percent of the spendable weekly wage of the 01 deceased to such beneficiaries, share and share alike, not to exceed $20,000 in the 02 aggregate. 03 * Sec. 19. AS 23.30.220(a) is amended to read: 04 (a) Computation of compensation under this chapter shall be on the basis of 05 an employee's spendable weekly wage at the time of injury. An employee's spendable 06 weekly wage is the employee's gross weekly earnings minus payroll tax deductions. 07 An employee's gross weekly earnings shall be calculated as follows: 08 (1) if at the time of injury the employee's earnings are calculated by 09 the week, the weekly amount is the employee's gross weekly earnings; 10 (2) if at the time of injury the employee's earnings are calculated by 11 the month, the employee's gross weekly earnings are the monthly earnings multiplied 12 by 12 and divided by 52; 13 (3) if at the time of injury the employee's earnings are calculated by 14 the year, the employee's gross weekly earnings are the yearly earnings divided by 52; 15 (4) if at the time of injury the 16 (A) employee's earnings are calculated by the day, hour, or by 17 the output of the employee, the employee's gross weekly earnings are the 18 employee's earnings most favorable to the employee computed by dividing by 19 13 the employee's earnings, [NOT] including overtime or premium pay, earned 20 during any period of 13 consecutive calendar weeks within the 52 weeks 21 immediately preceding the injury; 22 (B) employee has been employed for less than 13 calendar 23 weeks immediately preceding the injury, then, notwithstanding (1) - (3) of this 24 subsection and (A) of this paragraph, the employee's gross weekly earnings are 25 computed by determining the amount that the employee would have earned, 26 [NOT] including overtime or premium pay, had the employee been employed 27 by the employer for 13 calendar weeks immediately preceding the injury and 28 dividing this sum by 13; 29 (5) if at the time of injury the employee's earnings have not been fixed 30 or cannot be ascertained, the employee's earnings for the purpose of calculating 31 compensation are the usual wage for similar services when the services are rendered 01 by paid employees; 02 (6) if at the time of injury the employment is exclusively seasonal or 03 temporary, then, notwithstanding (1) - (5) of this subsection, the gross weekly earnings 04 are 1/50th of the total wages that the employee has earned from all occupations during 05 the 12 months [CALENDAR YEAR] immediately preceding the injury; 06 (7) when the employee is working under concurrent contracts with two 07 or more employers, the employee's earnings from all employers is considered as if 08 earned from the employer liable for compensation; 09 (8) if an employee when injured is a minor, an apprentice, or a trainee 10 in a formal training program, as determined by the board, whose wages under normal 11 conditions would increase during the period of disability, the projected increase may 12 be considered by the board in computing the gross weekly earnings of the employee; 13 (9) if the employee is injured while performing duties as a volunteer 14 ambulance attendant, volunteer police officer, or volunteer fire fighter, then, 15 notwithstanding (1) - (6) of this subsection, the gross weekly earnings for calculating 16 compensation shall be the minimum gross weekly earnings paid a full-time ambulance 17 attendant, police officer, or fire fighter employed in the political subdivision where the 18 injury occurred, or, if the political subdivision has no full-time ambulance attendants, 19 police officers, or fire fighters, at a reasonable figure previously set by the political 20 subdivision to make this determination, but in no case may the gross weekly earnings 21 for calculating compensation be less than the minimum wage computed on the basis 22 of 40 hours work per week; 23 (10) if an employee is entitled to compensation under AS 23.30.180 24 and the board determines that calculation of the employee's gross weekly earnings 25 under (1) - (7) of this subsection does not fairly reflect the employee's earnings during 26 the period of disability, the board shall determine gross weekly earnings by considering 27 the nature of the employee's work, work history, and resulting disability, but 28 compensation calculated under this paragraph may not exceed the employee's gross 29 weekly earnings at the time of injury. 30 * Sec. 20. The uncodified law of the State of Alaska is amended by adding a new section 31 to read: 01 APPLICABILITY. The changes made by secs. 3 - 5 and 14 - 19 of this Act apply 02 only to an injury sustained on or after the effective date of secs. 3 - 5 and 14 - 19 of this Act. 03 * Sec. 21. The uncodified law of the State of Alaska is amended by adding a new section 04 to read: 05 TRANSITION: REGULATIONS. The agency affected by the changes made by this 06 Act may proceed to adopt regulations under AS 23.30.005 to implement the changes. The 07 regulations take effect under AS 44.62 (Administrative Procedure Act), but not before the 08 effective date of secs. 2 - 19 of this Act. 09 * Sec. 22. Section 21 of this Act takes effect immediately under AS 01.10.070(c). 10 * Sec. 23. Except as provided in sec. 22 of this Act, this Act takes effect July 1, 2000.