Legislature(2017 - 2018)

2018-01-24 Senate Journal

Full Journal pdf

2018-01-24                     Senate Journal                      Page 1810
SB 156                                                                                                                        
SENATE BILL NO. 156 BY THE SENATE RULES COMMITTEE                                                                               
BY REQUEST OF THE GOVERNOR, entitled:                                                                                           
          "An Act relating to workers' compensation benefits                                                                    
          for the rehabilitation and reemployment of injured                                                                    
was read the first time and referred to the Labor and Commerce and                                                              
Finance Committees.                                                                                                             

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The following fiscal information was published today:                                                                           
 Fiscal Note No. 1, zero, Department of Administration                                                                          
 Fiscal Note No. 2, Department of Labor and Workforce                                                                           
Governor's transmittal letter dated January 23:                                                                                 
Dear President Kelly,                                                                                                           
Under the authority of Article III, Section 18, of the Alaska                                                                   
Constitution, I am transmitting a bill relating to the rehabilitation and                                                       
reemployment of injured employees in the workers’ compensation                                                                  
system. The bill improves the process of determining eligibility and                                                            
developing reemployment plans for workers who cannot return to their                                                            
former jobs as a result of a work-related injury, and proposes services                                                         
to support employers in getting injured workers back on the job                                                                 
The reemployment process is meant to provide severely injured                                                                   
workers with new skills to return to the labor market. However,                                                                 
developing workable reemployment plans within statutory constraints                                                             
has grown increasingly difficult since the reemployment process was                                                             
last reformed over ten years ago. This bill updates an outdated process                                                         
with new approaches to provide adequate benefits while controlling                                                              
costs, and to enhance the system’s efficiency and fairness.                                                                     
This bill would set the maximum cost for a reemployment plan at an                                                              
amount that accounts for inflation since the last statutory increase in                                                         
2000, and provides for annual adjustments of the maximum cost based                                                             
on the consumer price index. The bill would also increase the limited                                                           
cash benefit for job dislocation to account for inflation since the                                                             
benefit was created in 2005. Eligible employees would also have more                                                            
choices in reemployment goals and plans. The law would no longer                                                                
require that plans take the shortest amount of time for completion,                                                             
although statutory time and cost limitations would still apply.                                                                 
At the same time, the bill would help employers control costs by                                                                
setting fees for the services of rehabilitation specialists who evaluate                                                        
eligibility, and develop and monitor plans. The bill would limit the                                                            
payment of stipend benefits that cover living expenses during the                                                               

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reemployment process to not more than one year before a plan is                                                                 
approved and not more than two years after a plan is approved. This                                                             
helps employers control costs and curb abuse of the system by                                                                   
discouraging employees from delaying the reemployment process to                                                                
receive additional stipend. Finally, the bill would also limit liability for                                                    
employers for reemployment benefits by establishing a deadline for a                                                            
worker to request these benefits.                                                                                               
The bill would reduce disputes over an employee’s non-cooperation                                                               
with the process by making participation by employees wholly                                                                    
voluntary. Eligibility evaluations would occur only upon an                                                                     
employee’s written request and are bypassed if the employer and                                                                 
employee agree to the employee’s eligibility. Also, eligible employees                                                          
would have more time to choose the job dislocation benefit over                                                                 
continuing to participate in the reemployment process. Even after the                                                           
period for selecting the job dislocation benefit ends, an employee may                                                          
choose to stop participating in the reemployment process at any time,                                                           
ending an employer’s ongoing liability for reemployment benefits.                                                               
The process may be suspended on request if an employee’s medical                                                                
condition changes or the employee has other unusual and extenuating                                                             
circumstances that prevent the employee from temporarily                                                                        
participating in retraining. Additionally, the bill would permit an                                                             
employer to controvert and stop paying reemployment benefits if the                                                             
employee is not willing to participate in the process.                                                                          
Even though the reemployment process would be voluntary, the bill                                                               
would encourage employees to return to work because it would not                                                                
permit employees to settle reemployment benefits with their                                                                     
employers. Instead, employees eligible for reemployment benefits                                                                
must choose to either complete a reemployment plan or take a job                                                                
dislocation benefit. This avoids injured employees receiving large                                                              
lump sums that they often do not use to complete retraining on their                                                            
The bill would also encourage employees’ return to work by allowing                                                             
the administrator to offer consultation services for employers on early                                                         
return-to-work policies and programs. Returning injured workers to                                                              
the job on light duty while they are recovering from their injury                                                               
maintains their connection to the workforce, and minimizes lost wages                                                           
and downtime. Moreover, studies have shown that the longer an                                                                   

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injured worker remains off work, the less likely that the worker will                                                           
return to the labor market. The proposed consultation services are                                                              
meant to reduce the need for retraining and the overall cost of                                                                 
workers’ compensation benefits by returning injured employees to                                                                
work sooner.                                                                                                                    
Finally, the bill would make the process more efficient in three                                                                
different ways. First, the bill would allow the reemployment benefits                                                           
administrator to reconsider or modify decisions, and rehabilitation                                                             
specialists to help parties modify plans, changing the cumbersome                                                               
process under current law that requires parties to ask the Alaska                                                               
Workers’ Compensation Board for such adjustments. However, parties                                                              
would still be permitted to seek Board review of the administrator’s                                                            
decisions in any matter. Second, because the number of qualified                                                                
rehabilitation specialists is declining, the bill would provide greater                                                         
flexibility for the administrator to assign and manage these specialists                                                        
so that lack of availability does not delay eligibility evaluations and                                                         
plan development. Third, the bill would extend the deadline for                                                                 
specialists to complete eligibility evaluations to 60 days, eliminating                                                         
the requirement that they request more time if an evaluation is not                                                             
completed in 30 days.                                                                                                           
This bill would improve the delivery of reemployment benefits to                                                                
injured workers, ensure reemployment benefits remain adequate,                                                                  
control employers’ costs, and encourage the early return to work of                                                             
injured employees for the benefit of both employees and their                                                                   
I urge your prompt and favorable action on this measure.                                                                        
Bill Walker