Legislature(2019 - 2020)ADAMS 519
03/05/2020 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB127 | |
| HB182 | |
| HB30 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 127 | TELECONFERENCED | |
| += | HB 182 | TELECONFERENCED | |
| += | HB 30 | TELECONFERENCED | |
HOUSE BILL NO. 30
"An Act relating to the exclusiveness of liability of
an employer in the case of death; relating to the
payment of workers' compensation benefits in the case
of permanent partial impairment; relating to notice of
workers' compensation death benefits; relating to the
payment of workers' compensation death benefits
payable to a child of an employee where there is no
surviving spouse; relating to the payment of workers'
compensation death benefits for an employee without a
surviving spouse or child; and providing for an
effective date."
2:00:24 PM
Co-Chair Johnston invited the bill sponsor to the table.
REPRESENTATIVE ANDY JOSEPHSON, SPONSOR, asked if the chair
wanted a reintroduction to the bill. Co-Chair Johnston
responded in the affirmative.
Representative Josephson explained that when a person was
partially injured at work, a doctor declared whether or not
they had a degree of disability. Sometimes a disability was
obvious to the eye and, sometimes further study was
necessary. For example, a back injury might require
additional assessment. The state had a permanent-partial
impairment (PPI) rating and a whole-body multiplier. The
bill changed the whole-body multiplier which had not been
adjusted in 20 years. Alaska ranked between 40th and 50th
place amongst the 50 states in terms of impairment ratings.
The legislation would result in Alaska moving up to 26th
place in ranking in the United States. The bill deleted a
category of death benefit for the single childless worker
and replaced it with a requirement that a new worker in
Alaska received notice of their Worker's Compensation
benefits. The bill was designed to put people who were
single and childless on notice that they might want to
purchase life insurance, as there was no remedy for their
family if they were to pass away.
Representative Josephson indicated the bill made one other
provision change for a child whose parent died at work.
Currently, the child would have 4 years of medical coverage
through Worker's Compensation beginning at age 19 as long
as they were enrolled at a vocational school or college.
The bill removed the provision of having to be enrolled in
school. He provided a couple of examples. He suggested that
by removing the school stipulation, the provision was more
equitable because it captured all different kinds of people
between the ages of 19 and 23.
2:04:55 PM
Representative Wool asked if the purpose of the initial
provision was to help a person up to 23 years of age,
essentially a dependent, while they were attending school
and not earning money. He wondered if there was a
distinction between a person in school and a person in the
workforce relating to their status as a dependent.
Representative Josephson indicated that the language in
AS 23.33.95 was odd and, he was not suggesting making a
change to it. However, the way the statute was written, it
seemed to infer that a dependent could be 40 years old. If
their 65-year-old father died in the workplace because of a
work-related accident, they could be eligible for the
benefit. However, the language suggested the survivor had
to be enrolled in school at the moment of their parent's
death. Instead of making a change to the language, the bill
was stipulating that the benefit would be available from
ages 19-23.
Representative Wool asked for clarification about a
40-year-old dependent who lived with their parents, and
could not live on their own. Representative Josephson
reminded members they were referring to current law. He
opined that it did not require that a person live with
their parent. However, he agreed that there was a category
of dependents who were either cognitively or physically
disabled and could receive their weekly allowance for a
significant amount of time. It would remain the same under
the legislation.
Vice-Chair Ortiz recalled the bill sponsor reporting that
the passage of the bill would place Alaska in the middle of
the ranking of the rest of the United States for
compensation for death.
Representative Josephson responded that he was not talking
about compensation for death, which was a different matter.
The bill was talking about compensation for a permanent
injury. He reported that the Department of Labor and
Workforce Development (DOL) two years prior reported that
for the loss of an arm from the shoulder down Alaska was
32nd in payment rankings. He furthered that Alaska ranked
33rd in compensation for the loss of a hip, 35th for the
loss of an eye, 33rd for the loss of an ear. He believed
Alaska's rankings were worse because there were about 10 or
11 states that had a different way of calculating loss. He
referred to an information sheet which he held up from DOL
that showed the loss of 1 eye at work Alaska was not on
the page. The page had to be flipped to find Alaska. If a
person lost an eye at work in Maryland, the Worker's
Compensation Plan would pay just over $250,000. If a person
were to lose their eye at work in Alaska, they would
receive $44,000 or less than 20 percent of what they would
receive in Maryland.
ELISE SORUM-BIRK, STAFF, REPRESENTATIVE ANDY JOSEPHSON,
noted the number used in the bill was based on inflation.
Co-Chair Johnston invited Mr. Mitchell to discuss the
fiscal notes.
2:10:14 PM
GREY MITCHELL, DIRECTOR, DIVISION OF WORKERS' COMPENSATION,
DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT (via
teleconference), relayed that the department had 2 fiscal
notes. The first dealt with the Worker's Compensation
component. The fiscal note illustrated a revenue increase
associated with increasing the permanent-partial impairment
benefits. The revenue increase was estimated to be $110,000
per year. The fiscal note showed an increase of $55,000 for
FY 21 and an increase of $110,000 per year from FY 22
through FY 26. The amount was based on a 44 percent
increase in PPI benefits. He elaborated that the reason the
revenue increased to the division was because there were 2
taxes. The first tax was collected by the Division of
Insurance on all premiums issued. The increase of 44
percent was expected to increase premiums in a like amount.
The other revenue source was a service fee placed on self-
insured employers such as the State of Alaska and other
large employers that had the resources to self-insure. The
insurers were required to pay 2 percent of all the
indemnity benefits they paid out over the year.
Mr. Mitchell reviewed the second fiscal note which dealt
with the Second Injury Fund. He explained that in Alaska
there was a fund that paid benefits for workers who had
pre-existing conditions and who had claims that met certain
conditions. In order to pay the claims, there was an
assessment against of all of the indemnity benefits that
were paid out over a year by all employers. He expounded
that the assessment was based on the amount of revenue in
the account at a given time over the year. The claims that
were charged against the account determined a reserve rate.
He reported in the previous year the reserve rate was set
at 5 percent. He suggested that for every dollar of
indemnity benefit payment, an employer was required to
submit 5 percent to the Second Injury Fund. The increase
was based on an estimate of an increase of $4.2 million in
indemnity payments. He continued that the amount was based
on indemnity payments that were made in 2018 multiplied by
44 percent. The estimated amount of the increase was
$105,000 in FY 21 and $210,000 each year for FY 22 through
FY 26.
2:14:52 PM
Representative Wool referred to language on the second page
of the fiscal note which stated:
"Studies indicate that significant benefit increases
are typically accompanied by changes in claimant
behavior. Changes in claimant behavior might result in
an increased number of PPI claims."
Representative Wool asked if more people would claim they
lost their eye because they would receive additional money.
He did not see how extra claims would result. He suggested
the loss of a limb would be difficult to fake.
Mr. Mitchell responded that Representative Wool's statement
was true. The National Council of Compensation Insurance
(NCCI) had done an extensive evaluation based on the
previous year's version of HB 30. The language was in the
previous year's analysis. He suggested that changing the
benefits to such a large amount, 44 percent, in a single
year might influence claimant behavior. It was a
consideration. He agreed that no one would fake the loss of
an eye or a similar injury. He reported that because the
language was included in the NCCI analysis, the division
included it in the fiscal note explanation.
Representative Wool just wanted to point it out.
Mr. Mitchell clarified that Mr. Jordan had a separate
fiscal note from the Department of Administration to
review. The fiscal note showed the effect the bill would
have on an employer. The note showed the cost to the state
related to increasing the PPI benefit amount.
2:17:11 PM
SCOTT JORDAN, DIRECTOR, DIVISION OF RISK MANAGEMENT,
DEPARTMENT OF ADMINISTRATION, reported that the
department's fiscal note reflected the 44 percent increase
on what the state paid out for the PPI rating. The fiscal
note reflected a 10-year average of what it paid out which
was $979,286 per year. The amount fluctuated from year-to-
year. He continued that the 44 percent increase would
increase the amount by $434,313 and the fee that Director
Mitchell had mentioned was also included for $26,059. The
fiscal note for FY 21 was half of the amount because the
effective date would be half of the year or $230,200. In
the out years from FY 22 through FY 26 the amount would be
$460,400 per year.
Representative Josephson wanted to see a fiscal note
because the point of the bill was to provide more benefit.
He noted that in the Worker's Compensation Annual Report
from 2018 showed total compensation payments statewide had
decreased from $292 million in 2015 to $225 million in
2018. He was unclear the reason for the change. The
decrease was about $70 million in indemnity and medical
benefit payments.
Co-Chair Johnston reported the amendments were due by
March 9, 2020 at 5:00 PM. She relayed the agenda for the
following day.
HB 30 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 127 Dental Health Provider Shortage Areas 3.3.2020.pdf |
HFIN 3/5/2020 1:30:00 PM |
HB 127 |
| HB127 Letters of Support 05.01.19.pdf |
HFIN 3/5/2020 1:30:00 PM |
HB 127 |
| HB 127 Response to Qusestions HFIN 3.3.2020.pdf |
HFIN 3/5/2020 1:30:00 PM |
HB 127 |
| HB 182 ANDVSA Letter of Support.pdf |
HFIN 3/5/2020 1:30:00 PM |
HB 182 |
| HB 182 RAINN 2.27.20.pdf |
HFIN 3/5/2020 1:30:00 PM |
HB 182 |