Legislature(2005 - 2006)CAPITOL 17
05/04/2005 02:00 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB130 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 295 | TELECONFERENCED | |
| + | SB 130 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
May 4, 2005
5:15 p.m.
MEMBERS PRESENT
Representative Tom Anderson, Chair
Representative Pete Kott
Representative Gabrielle LeDoux
Representative Bob Lynn
Representative Norman Rokeberg
Representative Harry Crawford
Representative David Guttenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 130(FIN) am
"An Act relating to a special deposit for workers' compensation
and employers' liability insurers; relating to assigned risk
pools; relating to workers' compensation insurers; stating the
intent of the legislature, and setting out limitations,
concerning the interpretation, construction, and implementation
of workers' compensation laws; relating to the Alaska Workers'
Compensation Board; assigning certain Alaska Workers'
Compensation Board functions to the division of workers'
compensation in the Department of Labor and Workforce
Development and to that department, and authorizing the board to
delegate administrative and enforcement duties to the division;
providing for workers' compensation hearing officers in workers'
compensation proceedings; establishing a Workers' Compensation
Appeals Commission; relating to workers' compensation medical
benefits and to charges for and payment of fees for the medical
benefits; relating to agreements that discharge workers'
compensation liability; relating to workers' compensation
awards; relating to reemployment benefits and job dislocation
benefits; relating to coordination of workers' compensation and
certain disability benefits; relating to division of workers'
compensation records; relating to release of treatment records;
relating to an employer's failure to insure and keep insured or
provide security; providing for appeals from compensation
orders; relating to workers' compensation proceedings; providing
for supreme court jurisdiction of appeals from the Workers'
Compensation Appeals Commission; providing for a maximum amount
for the cost-of-living adjustment for workers' compensation
benefits; relating to attorney fees with respect to workers'
compensation; providing for the department to enter into
contracts with nonprofit organizations to provide information
services and legal representation to injured employees;
providing for administrative penalties for employers uninsured
or without adequate security for workers' compensation; relating
to fraudulent acts or false or misleading statements in workers'
compensation and penalties for the acts or statements; providing
for members of a limited liability company to be included as an
employee for purposes of workers' compensation; establishing a
workers' compensation benefits guaranty fund; making conforming
amendments; providing for a study and report by the medical
services review committee; establishing the Task Force on
Workers' Compensation; and providing for an effective date."
- MOVED HCS CSSB 130(L&C) OUT OF COMMITTEE; ADOPTED A HOUSE
CONCURRENT RESOLUTION ALLOWING THE TITLE CHANGE
HOUSE BILL NO. 295
"An Act adopting the Uniform Fraudulent Transfer Act and
relating to fraudulent transfers of property."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: SB 130
SHORT TITLE: WORKERS' COMPENSATION/ INSURANCE
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
03/03/05 (S) READ THE FIRST TIME - REFERRALS
03/03/05 (S) L&C, FIN
03/08/05 (S) L&C AT 1:30 PM BELTZ 211
03/08/05 (S) Heard & Held
03/08/05 (S) MINUTE(L&C)
03/10/05 (S) L&C AT 1:30 PM BELTZ 211
03/10/05 (S) Heard & Held
03/10/05 (S) MINUTE(L&C)
03/15/05 (S) L&C AT 1:30 PM BELTZ 211
03/15/05 (S) Heard & Held
03/15/05 (S) MINUTE(L&C)
03/17/05 (S) L&C AT 1:30 PM BELTZ 211
03/17/05 (S) Heard & Held
03/17/05 (S) MINUTE(L&C)
03/22/05 (S) L&C AT 1:30 PM BELTZ 211
03/22/05 (S) Heard & Held
03/22/05 (S) MINUTE(L&C)
03/24/05 (S) L&C AT 2:00 PM BELTZ 211
03/24/05 (S) Heard & Held
03/24/05 (S) MINUTE(L&C)
03/29/05 (S) L&C AT 1:30 PM BELTZ 211
03/29/05 (S) -- Meeting Canceled --
03/31/05 (S) L&C AT 1:30 PM BELTZ 211
03/31/05 (S) Moved CSSB 130(L&C) Out of Committee
03/31/05 (S) MINUTE(L&C)
04/01/05 (S) L&C RPT CS 2DP 1NR 2AM NEW
TITLE
04/01/05 (S) DP: BUNDE, STEVENS B
04/01/05 (S) NR: SEEKINS
04/01/05 (S) AM: DAVIS, ELLIS
04/01/05 (S) JUD REFERRAL ADDED AFTER L&C
04/05/05 (S) JUD AT 8:30 AM BUTROVICH 205
04/05/05 (S) Heard & Held
04/05/05 (S) MINUTE(JUD)
04/06/05 (S) JUD AT 8:30 AM BUTROVICH 205
04/06/05 (S) Heard & Held
04/06/05 (S) MINUTE(JUD)
04/07/05 (S) JUD AT 8:30 AM BUTROVICH 205
04/07/05 (S) Heard & Held
04/07/05 (S) MINUTE(JUD)
04/08/05 (S) JUD RPT CS FORTHCOMING 1DP 4NR
04/08/05 (S) DP: SEEKINS
04/08/05 (S) NR: FRENCH, GUESS, THERRIAULT, HUGGINS
04/08/05 (H) JUD AT 8:00 AM CAPITOL 120
04/08/05 (S) Moved CSSB 130(JUD) Out of Committee
04/08/05 (S) MINUTE(JUD)
04/08/05 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/08/05 (S) <Pending Referral>
04/11/05 (S) FIN RPT CS 5DP 1NR 1AM
NEW TITLE
04/11/05 (S) DP: GREEN, WILKEN, BUNDE, DYSON,
STEDMAN
04/11/05 (S) NR: HOFFMAN
04/11/05 (S) AM: OLSON
04/11/05 (S) JUD CS RECEIVED
NEW TITLE
04/11/05 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/11/05 (S) Moved CSSB 130(FIN) Out of Committee
04/11/05 (S) MINUTE(FIN)
04/14/05 (S) TRANSMITTED TO (H)
04/14/05 (S) VERSION: CSSB 130(FIN) AM
04/15/05 (H) READ THE FIRST TIME - REFERRALS
04/15/05 (H) L&C, JUD, FIN
04/15/05 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/15/05 (S) Moved Out of Committee 4/11
04/15/05 (S) MINUTE(FIN)
05/04/05 (H) L&C AT 2:00 PM CAPITOL 17
WITNESS REGISTER
GREG O'CLARAY, Commissioner
Department of Labor & Workforce Development
Juneau, Alaska
POSITION STATEMENT:
RICHARD CATTANACH, Executive Director
Associated General Contractors of Alaska (ACG);
Management Co-Chair, Workers' Compensation Ad Hoc Committee
(No address provided)
POSITION STATEMENT:
PAUL LISANKIE, Director
Division of Workers' Compensation
Department of Labor & Workforce Development
Juneau, Alaska
POSITION STATEMENT: Reviewed the summary document comparing HCS
CSSB 130, Version I, and CSSB 130(FIN)am.
TIM KELLY, Lobbyist
Alaska State Medical Association
Anchorage, Alaska
POSITION STATEMENT: Provided comments on SB 130.
ACTION NARRATIVE
CHAIR TOM ANDERSON called the House Labor and Commerce Standing
Committee meeting to order at 5:15:53 PM. Representatives
Anderson, Kott, LeDoux, Rokeberg, Crawford, and Guttenberg were
present at the call to order. Representative Lynn arrived as
the meeting was in progress.
SB 130-WORKERS' COMPENSATION/ INSURANCE
CHAIR ANDERSON announced that the only order of business would
be CS FOR SENATE BILL NO. 130(FIN)am [long title provided in
committee calendar].
5:16:45 PM
REPRESENTATIVE KOTT moved to adopt HCS CSSB 130, Version
GS1112\L, Bullock, 5/4/05, as the working document. There being
no objection, Version L was before the committee.
GREG O'CLARAY, Commissioner, Department of Labor & Workforce
Development (DLWD), suggested that since Version L is "hot off
the presses" it should be addressed by a team of the individuals
[involved] in its drafting. He further suggested that someone
from the labor/management group of the ad hoc committee could
address the legislation.
CHAIR ANDERSON agreed with Commissioner O'Claray's suggestion.
5:19:16 PM
REPRESENTATIVE KOTT pointed out that Version L includes several
components that were provided as part of an ad hoc package.
However, he opined that only two-thirds of the legislation
relates to the earlier version.
5:19:56 PM
The committee to a brief at-ease.
5:22:22 PM
CHAIR ANDERSON pointed out that the committee should have a
document entitled, "Summary Comparison of CSSB 130(FIN)am and
Draft HCS 5/1/05". Although the HCS 5/1/05, Version I, isn't
completely parallel with Version L, it's close enough to work
for analysis purposes.
RICHARD CATTANACH, Executive Director, Associated General
Contractors of Alaska (ACG); Management Co-Chair, Workers'
Compensation Ad Hoc Committee, informed the committee that he
prepared the summary document to which Chair Anderson referred.
He noted that the summary document is a comparison of Version
24-GS1112\I, Bullock, 5/1/05, and CSSB 130(FIN)am.
REPRESENTATIVE KOTT interjected that [the majority of Version L]
should be on track with Version I. He suggested that he and
Representative LeDoux could help the committee with the portions
of Version L that diverge from Version I.
PAUL LISANKIE, Director, Division of Workers' Compensation,
Department of Labor & Workforce Development, explained that with
the summary document he noted the following: the corresponding
sections between [Version I] and CSSB 130(FIN)am, the
differences are highlighted in bold. Therefore, he suggested
that he could review the areas where there are differences. The
first section of the summary comparison addresses protecting
workers' benefits and jobs. He noted that Section 2 of CSSB
130(FIN)am has been resolved now.
REPRESENTATIVE LEDOUX asked if the language in Section 2 of CSSB
130(FIN)am is already in the law.
MR. LISANKIE related his understanding that Version L has
addressed the problems with [Section 2 of CSSB 130(FIN)am]. He
added that there was going to be a new section that
collateralized some additional loss reserves, which isn't in the
draft CS. As Representative LeDoux alluded to, there is a
provision in the current statute for deposits that are currently
being made. The language in Version I referred to the wrong
subsection, now that the change has been made to "(b)" it does
track back to the statute.
5:27:13 PM
MR. LISANKIE pointed out that the [HCS, Version I] has increased
the number of the task force members and added representatives
of the Alaska Chiropractic Society and a rehabilitation
specialist. The report back date has been pushed back to
December 1, 2006. Furthermore, the provision specifies that
legislative administrative support staff will be appointed. He
related his understanding that the makeup of the task force has
been slightly changed in Version L.
CHAIR ANDERSON inquired as to where the task force is discussed
in Version L.
MR. LISANKIE specified that it's on page 34, Section 69.
5:28:14 PM
REPRESENTATIVE KOTT explained that there will be an amendment
the intent of which is to identify the major issues for which a
consultant could gather the research. He suspected it would be
done over the summer months and the data would be provided to
the membership of the task force in order that they could
commence work September 1, 2005, and then report back to the
legislature by the end of the year.
5:30:59 PM
REPRESENTATIVE LYNN inquired as to how often there are claims
against chiropractors as opposed to medical doctors.
MR. LISANKIE said that although he didn't have hard numbers,
chiropractors provide a considerable amount of care to injured
workers in the state under the Workers' Compensation Act.
Furthermore, chiropractors have been acknowledged as physicians
in Alaska.
5:31:59 PM
REPRESENTATIVE ROKEBERG related his significant disappointment
with regard to the lack of a small business representative on
the task force. He opined that the task force is out of
balance.
5:32:30 PM
MR. CATTANACH pointed out that with two people being appointed
from the ad hoc committee for the management and labor slots,
the current makeup of the entire ad hoc committee is that all
five members are from small businesses. No large businesses are
represented.
REPRESENTATIVE ROKEBERG said that he would like to see the names
and affiliations of those members [of small businesses].
MR. CATTANACH noted that the University of Alaska is represented
on the task force.
5:33:28 PM
MR. LISANKIE turned attention to page 2 of the summary document
and highlighted that the Public Employees' Retirement System
(PERS) is the same in that it allows the one-time payment of
attorney fees. However, under [Version I] DLWD wouldn't have
the authority to contract with a nonprofit organization in order
to provide information and legal assistance to injured workers
unable to obtain private counsel. Furthermore, there's not a
broad permission of authority to the director of the Division of
Workers' Compensation, although there are a substantial number
of specific delegations that are included in [Version I]. There
is no corresponding provision in Version L, he noted.
The committee took a brief at-ease.
5:36:08 PM
MR. LISANKIE, in response to Chair Anderson, clarified that
under Version L, DLWD would not have authority to contract with
a nonprofit organization to provide information and legal
assistance to injured workers unable to obtain private counsel.
Furthermore, there isn't a corresponding broad delegation of
authority from the Workers' Compensation Board down to the
division director, although there are a significant number of
individual delegations in [Version L].
MR. CATTANACH explained that the ad hoc committee was unanimous
in its belief that the department shouldn't provide legal
assistance to injured workers. The purpose of the legislation
was to speed up the process and reduce the costs. However, the
ad hoc committee didn't see how attorneys could do either. The
ad hoc committee didn't see a need for such, and therefore the
provision was dropped.
5:38:00 PM
REPRESENTATIVE LEDOUX related her understanding that the working
group intended for Section 8 of [CSSB 139(FIN)am] to be
included, although she couldn't find it in [Version L].
5:38:48 PM
REPRESENTATIVE LEDOUX stated that the delegation of authority
was accidentally left out. Therefore, she suggested that it
should be reinserted.
MR. CATTANACH agreed, adding that the delegation of authority
should be included because it speeds the process.
REPRESENTATIVE LEDOUX moved that the committee adopt Conceptual
Amendment 1, which would reinsert Section 8 of [CSSB 130(FIN)am]
into Version L.
REPRESENTATIVE CRAWFORD related his understanding, from Mr.
Cattanach's testimony, that [the ad hoc committee] did not want
the entire Section 8. Furthermore, he didn't believe that was
what Representative LeDoux wanted either.
5:41:42 PM
REPRESENTATIVE LEDOUX clarified her earlier motion such that
[Conceptual] Amendment 1 would insert "The board may, by
regulation, delegate authority to the director to assist the
board in administering and enforcing this chapter."
CHAIR ANDERSON objected. Upon gaining an understanding from
Representative LeDoux as to where this language would be
inserted and acknowledging that the representative of the ad hoc
committee approved of this, Chair Anderson removed his
objection.
There being no further objection, [Conceptual] Amendment 1 was
adopted.
5:43:22 PM
MR. LISANKIE continued with his comparison using the summary
document. He explained that under CSSB 130(FIN)am, Section 10
allows injured workers represented by Alaska-licensed attorneys
to settle their claims without review by the Workers'
Compensation Board, unless the injured worker is a minor,
incompetent, [or unrepresented by counsel]. However, Section 7
of Version I adds to the disputes that may not be settled, even
when represented by an attorney, for a dispute that calls for a
waiver of medical benefits. He indicated that the
aforementioned was maintained in Version L as well.
MR. CATTANACH concurred with the analysis and what's in Section
7 of Version L [page 4, lines 22-23].
CHAIR ANDERSON noted, for the record, that representatives of
the ad hoc committee were indicating support of the
aforementioned change.
5:45:58 PM
MR. LISANKIE pointed out that Section 4 of [Version I] echoes
the requirement for the use of hearing officers and the adoption
of conflict of interest regulations as specified in CSSB
130(FIN)am. However, [Section 4 of Version I] includes a
provision that adds three workers' compensation hearing panels,
which would increase the total to 10.
5:47:19 PM
MR. CATTANACH, in response to Chair Anderson, said that he
wasn't aware of any change to [what was in Section 4 of Version
I].
CHAIR ANDERSON opined that it looks as if [Section 4 of Version
I is the same in Version L].
5:47:55 PM
REPRESENTATIVE KOTT explained that the number of boards was
increased in order to reduce the backlog, which he likened to
what the RCA experienced. He suggested that once the backlog is
reduced, the task force could determine whether the number of
boards should be decreased.
MR. CATTANACH concurred.
5:48:56 PM
MR. LISANKIE turned to the second page of the summary document,
and drew attention to the heading "FAIR BENEFITS AT REASONABLE
EMPLOYER COST". The first two sections specified are identical
under both Version I and CSSB 130(FIN)am. The first significant
benefit is related to the fact that Section 37 of CSSB
130(FIN)am requires a coordination of payments between workers'
compensation benefits and disability benefits that are provided
under a plan to which an employer has also contributed. The
aforementioned is done so that the combined benefit doesn't
exceed the injured workers take-home pay. Version I didn't
maintain that provision.
5:49:47 PM
CHAIR ANDERSON highlighted that on page 25 of Version L, Section
48, states: "(c) The department [BOARD] shall provide by
regulation for the determination and comparison of living costs
for this state and the other areas in which recipients reside
and for the [ANNUAL] redetermination and comparison of these
costs every three years."
MR. CATTANACH noted that he concurred [with the above
provision].
5:50:20 PM
MR. LISANKIE moved on to page 3 of the summary document, and
informed the committee that CSSB 130(FIN)am had a provision that
incrementally reduced benefit costs by redefining compensable
injuries and restricting the compensability of certain injuries
that were the result of aggravations, accelerations, or
combinations of a preexisting condition. The aforementioned was
attempted through the use of a "major contributing cause"
standard. Version I deleted the aforementioned changes.
MR. CATTANACH confirmed that the aforementioned is not in
Version L.
5:51:25 PM
MR. LISANKIE moved on to the anti-fraud provision, which only
changes the definitions of "person" and "compensation" to follow
the language proposed by the ad hoc committee.
CHAIR ANDERSON clarified that Section 56 of Version L seems to
mirror Section 56 of Version I.
5:52:25 PM
REPRESENTATIVE CRAWFORD pointed out that there was a "part (c)"
that was part of the ad hoc bill that's no longer included. He
asked if that was of concern.
MR. CATTANACH said that he was concerned with that. He
explained that "part (c)" addressed civil damages. [Version L]
requires that the department hire two fraud investigators and
also requires the Department of Law to have one attorney
assigned, at least on a half-time basis. Mr. Cattanach informed
the committee that civil damages were desired because the
administration doesn't prosecute these and it was felt that with
civil damages the injured worker might pursue a case on his/her
own. "But I think we should try this," he said.
5:53:25 PM
REPRESENTATIVE KOTT agreed with Mr. Cattanach's thoughts. He
related his understanding that there is one [investigator] in
the department and since he/she didn't have any investigative
authority, it was granted and a second [investigator] was added.
5:54:27 PM
MR. LISANKIE pointed out that [Version I] still has a Section 57
[part (c)]. Unlike CSSB 130(FIN)am, [Version I] does authorize
courts in a civil proceeding to award compensatory damages,
punitive damages, as well as attorneys fees for violations of
fraud.
CHAIR ANDERSON pointed out that Section 57 of Version L is
different than that specified in Section 57 of Version I.
MR. CATTANACH interjected that the subject [of Section 57 in
Version L] is the same [as that in Section 57 of Version I], but
the language [in Version L] is substantially refined.
CHAIR ANDERSON read Section 57 in Version I and Version L.
5:56:17 PM
MR. CATTANACH said that Section 57 in Version L would be fine.
REPRESENTATIVE GUTTENBERG asked if Section 56 pertains to
insurance companies.
REPRESENTATIVE LEDOUX opined that the language "any entity"
would include insurance companies.
REPRESENTATIVE GUTTENBERG asked if that would also include the
insurance company's employees and representatives.
5:57:46 PM
MR. LISANKIE returned the committee's attention to page 3 of the
summary document, which highlights four sections of CSSB
130(FIN)am and Version I that refer to limited liability company
members, release of medical records, confidentiality, and
banning the division from assembling or providing individual
records for commercial purposes. He noted that these four
sections are practically identical. However, Section 34 of
Version I referred to "individually identifiable" information
about employees and employers that are not public record subject
to disclosure under the Public Record Act. The aforementioned
is an addition to CSSB 130(FIN)am.
5:58:43 PM
MR. LISANKIE continued with page 4 of the summary document,
which addressed improving return-to-work benefits. He explained
that CSSB 130(FIN)am allowed reductions in delays in determining
certain reemployment benefits eligibility and costs by workers
and employers to stipulate to the injured workers' eligibility
to that benefit. He related that the aforementioned was deleted
from Version I.
MR. CATTANACH confirmed that the aforementioned provision [isn't
included] in Version L.
5:59:56 PM
MR. LISANKIE explained that since [Section 3 of CSSB 130(FIN)am]
was deleted in Version I, it also deletes the portion of that
provision calling for simplified standards for determining
entitlement to evaluation. He pointed out that Section 15 of
CSSB 130(FIN)am was not included in Version I.
CHAIR ANDERSON noted that [Section 15 of CSSB 130(FIN)am] was
not included in Version L either.
MR. CATTANACH agreed that the aforementioned section isn't in
Version L, but added that he didn't know why it was eliminated.
6:01:30 PM
REPRESENTATIVE LYNN inquired as to the problem if an employer
and an employee both stipulate.
MR. CATTANACH agreed, and then added that [Section 15 of CSSB
130(FIN)am] may have been deleted because it was a subject that
the ad hoc committee hadn't considered. However, he opined that
the aforementioned doesn't mean it's bad.
6:02:21 PM
MR. LISANKIE continued by highlighting that Section 17 of CSSB
130(FIN)am and Section 15 of Version I are the same. He then
pointed out that Version I does not include a corresponding
provision to Section 13 of CSSB 130(FIN)am.
6:03:12 PM
MR. LISANKIE moved on to pages 5-6, which addresses the Workers'
Compensation Appeals Commission that was included in CSSB
130(FIN)am. Version I doesn't include any of the sections
having to do with the aforementioned commission. In response to
Chair Anderson, Mr. Lisankie explained that under CSSB
130(FIN)am the appeals commission would be established.
Therefore, the commission was substituted for the Superior
Court. Version L has deleted the appeals commission, but the
ability to appeal to the Superior Court and the Supreme Court,
if one so chooses, would remain.
CHAIR ANDERSON mentioned that the governor's representatives
have stated that the aforementioned impedes an expeditious
process.
6:04:59 PM
MR. LISANKIE turned the committee's attention to page 7 of the
summary document and the heading, "MAINTAINING MEDICAL BENEFITS
WHILE REDUCING COSTS". He highlighted that Section 51 of CSSB
130(FIN)am repealed all the provisions in Section 27 if no
action was taken by June 30, 2007. There is no Section 27 in
[Version I] so there is no need for Section 51. However,
Section 32 of CSSB 130(FIN)am would cap fees for health care
providers at the current levels established in the Workers'
Compensation Board medical fee schedule dated 12/1/04.
6:06:11 PM
CHAIR ANDERSON inquired as to how far Section 32 of Version L
would reach in regard to a physician's ability to charge.
6:06:40 PM
TIM KELLY, Lobbyist, Alaska State Medical Association, related
his understanding that Section 32 would freeze medical fees at
current rates. He pointed out that a later section repeals the
freeze in June of 2007. He further related his understanding
that Section 32 is a point of discussion that can be worked out
depending upon other sections of SB 130.
6:08:59 PM
REPRESENTATIVE LYNN expressed concern with freezing prices, and
therefore he inquired as to what happens with the pent up demand
once the freeze is lifted. He stressed that there are many
factors that contribute to increased medical cost.
CHAIR ANDERSON highlighted that the next committee of referral
for SB 130 is the House Judiciary Standing Committee. He
related his belief that those effected by this legislation can
bring forward comments in the House Judiciary Standing
Committee.
REPRESENTATIVE CRAWFORD also expressed concern with regard to
freezing medical costs and the pent up demand.
6:11:07 PM
MR. LISANKIE continued with his comparison on page 7 of the
summary document. He pointed out that CSSB 130(FIN)am had the
commissioner of DLWD appoint a medical review committee.
However, Version I specifies that the AWCB will appoint the
medical review committee and the makeup of the AWCB, and Version
L eliminates language in current statute indicating that the
AWCB can contract with organizations to assist it.
REPRESENTATIVE ROKEBERG questioned whether the aforementioned is
like having the fox guard the henhouse.
6:12:39 PM
MR. LISANKIE turned attention to Section 71 of Version I, which
changes the date that the report must be given from the first
week of the Twenty-Fifth Legislative Session to May 15, 2006.
CHAIR ANDERSON informed the committee that the aforementioned is
now encompassed in Section 74 in Version L.
MR. CATTANACH opined that [May 15, 2006] isn't soon enough.
6:13:56 PM
REPRESENTATIVE KOTT commented that much of this is going to be
contingent on a couple of amendments that address the task force
and reporting. Representative Kott said that he wouldn't be
adverse to the reporting date being earlier. The main charge of
the medical review panel was to establish guidelines and then
report those to the task force. Therefore, there would also
need to be amendments to require the medical review panel's
report to be submitted earlier, such as September 15 [2006].
6:15:25 PM
MR. LISANKIE, still referring to page 7 of the summary document,
turned to Section 24 of CSSB 130(FIN)am, which proposed to
incrementally restrict compensable palliative care under certain
limitations. However, that section was not included in Version
I.
MR. CATTANACH noted that he concurred with the deletion.
MR. LISANKIE continued with page 8 of the summary document.
Section 26 of CSSB 130(FIN)am proposed that the state adopt the
American College of Occupational Environmental Medicine (ACOEM)
treatment guidelines and to provide that injuries not covered by
that would then have other guidelines determined and adopted by
the Workers' Compensation Board. Version I doesn't include that
provision.
6:16:49 PM
REPRESENTATIVE GUTTENBERG inquired as to the guidelines that are
used in its place.
MR. CATTANACH explained that the idea is to have some treatment
guidelines. However, he informed the committee of a Rand study
that found that in California, the only state that has adopted
ACOEM guidelines, ACOEM guidelines worked for just under 50
percent of the workers' compensation injuries. Therefore, the
ad hoc committee felt that a full set of guidelines should be
defined, Mr. Cattanach related.
6:18:06 PM
REPRESENTATIVE ROKEBERG asked if the 50 percent to which the
Rand study referred was in reference to the caseload or the
diagnostics.
MR. CATTANACH said that he could provide the committee a copy of
the Rand study. He noted that the study reviewed a number of
treatment guidelines and weighed them in terms of effectiveness.
6:18:51 PM
MR. LISANKIE concluded with page 9 of the summary document,
which documents provisions that were not in CSSB 130(FIN)am, but
were added to Version I.
6:19:32 PM
MR. CATTANACH pointed out that Section 6 of Version I came out
of the ad hoc process and was intended to speed the process.
Hearings on things that are perfunctory and pro forma take time,
and therefore it was agreed that some of these could be agreed
on beforehand and the hearing officer could hear them. He then
turned to Section 24 of Version I and related that the ad hoc
committee was concerned with regard to employers without
insurance. The desire was to speed the process by which the
[employer without insurance] is stopped and made to obtain
insurance. Therefore, Section 24 allows the director to make
the decision to move along the process.
6:20:41 PM
REPRESENTATIVE KOTT interjected that under both cases one still
has to go through a hearing. Those cases that are more
administrative are brought to the attention of the director
before the board, and therefore [Section 24] would speed up the
process.
6:21:35 PM
REPRESENTATIVE CRAWFORD informed the committee that he would
like to add [to Section 24 in Version L] the following language:
"An employer who fails to properly classify an employee for the
purposes of obtaining workers' compensation insurance or to
furnish to the division". He explained that he wanted to add
that language because those who are knowingly misclassifying
employees in order to obtain cheaper workers' compensation rates
are robbing the system. Therefore, the director should have the
ability to do something about that. Such an amendment would
save a lot of money.
6:23:21 PM
REPRESENTATIVE CRAWFORD moved that the committee adopt
Conceptual Amendment 2, which read:
Page 12, following line 5:
Insert a new bill section to read:
"*Sec. 24. AS 23.30.075 is amended by adding a new
subsection to read:
(c) An employer who fails to properly
classify an employee for the purpose of obtaining
workers' compensation insurance or to furnish proof to
the division of the employer's financial ability to
pay compensation directly fails to comply with the
requirements in (a) of this section."
6:24:05 PM
MR. CATTANACH opined that workers' compensation is very complex
and an employer may unintentionally misclassify an employee.
The problem, he further opined, is with intent. However, Mr.
Cattanach said that at this time he doesn't have a problem with
Conceptual Amendment 2.
The committee took an at-ease from 6:25 p.m. to 6:27 p.m.
6:27:48 PM
REPRESENTATIVE CRAWFORD explained that Conceptual Amendment 2
allows the director, if he so chooses, the power to use the
provision suggested. He opined that it would only be used in an
egregious case.
6:28:53 PM
CHAIR ANDERSON objected for discussion purposes.
MR. CATTANACH turned to Section 56 paragraph (3) of Version L,
which he believes covers [what Representative Crawford is
attempting to address].
REPRESENTATIVE KOTT agreed with Mr. Cattanach, and added that
Conceptual Amendment 2 isn't necessary.
6:31:01 PM
REPRESENTATIVE CRAWFORD highlighted that once employees are
misclassified, the employer is only ever required to makeup the
premiums when someone is hurt. Therefore, he said he wanted the
director to have the ability to stop such practices. Although
Representative Crawford characterized the language in Section 56
paragraph (3) to be great language, he emphasized that thus far
it hasn't been enforced.
6:32:27 PM
REPRESENTATIVE GUTTENBERG suggested that inserting language that
relates that the employer has "frequently, often, consistently"
misclassified employees in order to get at flagrant violators.
Therefore, Representative Guttenberg moved that the committee
adopt the following amendment to Conceptual Amendment 2, such
that subsection (c) would read:
(c) An employer who flagrantly fails to properly
classify an employee for the purpose of obtaining
workers' compensation insurance or to furnish proof to
the division of the employer's financial ability to
pay compensation directly fails to comply with the
requirements in (a) of this section.
There being no objection, the amendment to Conceptual Amendment
2 was adopted.
6:33:07 PM
REPRESENTATIVE LEDOUX opined that the difference between
Sections 24 and 56 is that Section 56 allows for civil remedies
while Section 24 allows for the director to shut down the
employer who is misclassifying employees. Furthermore, Section
56 refers to "knowingly misclassifies employees".
6:34:06 PM
REPRESENTATIVE GUTTENBERG opined that employers have been
consistently misclassifying employees and have paid decreased
[workers' compensation] rates, which results in an uneven
playing field for contactors.
REPRESENTATIVE CRAWFORD moved that the committee adopt an
amendment to Conceptual Amendment 2 such that subsection (c)
would delete "flagrantly" and insert "knowingly" in its place.
There being no objection, the amendment to Conceptual Amendment
2 was adopted.
CHAIR ANDERSON maintained his objection to Conceptual Amendment
2, as amended.
REPRESENTATIVE ROKEBERG related his belief that the statutory
provisions specify that misclassification is illegal, although
he indicated that there is an enforcement issue. However, he
pointed out that the legislation calls for two investigators and
an attorney.
REPRESENTATIVE CRAWFORD related his understanding that the
language in Section 56 refers to fraud related to unfair
billings rather than "shutting people down on the job." All the
proposed Conceptual Amendment 2 would do is allow the director
the ability to shut down an employer found to be knowingly
misclassifying employees.
6:36:14 PM
MR. CATTANACH deferred to the committee's wishes.
A roll call vote was taken. Representatives Lynn, LeDoux,
Guttenberg, and Crawford voted in favor of Conceptual Amendment
2, as amended. Representatives Rokeberg, Kott, and Anderson
voted against it. Therefore, Conceptual Amendment 2, as
amended, was adopted by a vote of 4-3.
6:37:20 PM
REPRESENTATIVE ROKEBERG directed the committee's attention to
Section 23 of Version L, which references [AS 23.30.075(a)]. He
opined that it doesn't accomplish what was desired with
Conceptual Amendment 2, [as amended], and doesn't provide any
sanction.
CHAIR ANDERSON suggested that the aforementioned could be
addressed as the legislation moves to the House Judiciary
Standing Committee.
MR. LISANKIE then continued with Section 31 in Version I, and it
was determined that it still remains in Version L.
6:39:04 PM
REPRESENTATIVE KOTT moved that the committee adopt Conceptual
Amendment 3, which would delete Section 31 of Version L. He
explained that the provision is convoluted, and furthermore the
entity which will pay isn't defined.
There being no objection, Conceptual Amendment 3 was adopted.
6:40:10 PM
MR. LISANKIE moved on to Section 41 of Version I, which
establishes penalties for late payment for compensation due
without a board order and specifies that it will be paid to the
person who should've been paid in the first place.
MR. CATTANACH said that he didn't have any problem with that.
MR. LISANKIE explained that under Section 42 of Version I is the
parallel provision for the payment of compensation for
compensation due under a board order.
6:40:50 PM
MR. LISANKIE moved on to Section 49 of Version I, which
indicates that an employer need not make retroactive
compensation rate adjustments if the annual recalculation of the
state average weekly wage that DLWD is required to do by
December of each year is instead done between January 1 and
April 1 of the following year.
6:41:13 PM
MR. CATTANACH explained that the aforementioned is an issue
because, for a variety of reasons, the recalculation of the
state average weekly wage isn't [provided by December 1].
However, the employer is still required to make the payments
effective January 1. Therefore, the employer continues to make
the payments and when the state issues the new wages, the
employer has to issue small checks. The aforementioned results
in a costly system to the employers through no fault of their
own. Section 49 allows for the reality of the first quarter
such that the employer doesn't have to makeup payments if the
state takes that long, but any time after the first quarter the
employer will have to makeup the difference.
6:42:21 PM
MR. LISANKIE turned attention to Section 51, which includes a
phase out of the second injury fund.
CHAIR ANDERSON noted that it seems to be consistent with
[Section 51] of Version L.
6:43:09 PM
REPRESENTATIVE CRAWFORD related his preference for the second
injury fund, and therefore he preferred to delete Section 51.
6:43:48 PM
MR. CATTANACH explained that the ad hoc committee recommended
phasing out the second injury fund because in order to qualify
for the second injury fund, the employer has to knowingly hire
someone who was previously injured. If that person reinjures
the original injury, the second injury fund takes over after one
year of payments. However, due to federal law an [employer]
can't ask [a prospective employee] whether he/she has been
previously injured because it's viewed as screening employees.
Therefore, very few new cases are going into the second injury
fund. Mr. Cattanach emphasized that although the idea for a
second injury fund is good, what is currently in place isn't
working. He noted that he had spoken with Representative Kott
about reviewing the entire issue of reemployment.
MR. CATTANACH opined that eliminating the second injury fund
admits that it isn't working.
REPRESENTATIVE CRAWFORD agreed to continue to work on that
issue.
6:45:37 PM
REPRESENTATIVE GUTTENBERG inquired as to how often [employees]
who have applied for the second injury fund have received funds
from it. He related his impression that it's difficult to get
to the second injury fund.
MR. LISANKIE agreed with that impression. He informed the
committee that currently about 130 individuals are being
reimbursed from the second injury fund. However, he noted that
those would be over a significant number of years because these
are usually the most serious cases.
6:46:54 PM
MR. LISANKIE continued his review of page 9 of the summary
document. He turned to Section 52 of Version I, which addresses
how certain compensation rates will be calculated for certain
groups of workers. He specified that the groups of workers
addressed are as follows: workers paid by the hour/day/output;
workers in exclusively seasonal or temporary employment; workers
who are minors, apprentices, and trainees in a formalized
training program.
MR. CATTANACH informed the committee that [Section 52 of Version
I] is a proposal of the ad hoc committee and was part of its
legislation, although it wasn't included in CSSB 130(FIN)am.
REPRESENTATIVE GUTTENBERG requested that the model of how those
compensation rates are calculated be provided at some point.
6:48:24 PM
REPRESENTATIVE ROKEBERG, turning attention to the notes on the
analysis for [Section 52], said that it appears that the Alaska
Supreme Court overturned an earlier 1995 statutory change and
recently affirmed that. Therefore, he surmised that [Section
52] is a reaction to the final judgment by the Alaska Supreme
Court.
MR. LISANKIE explained that there was a version of how
compensation rates should be calculated for state workers, and
that was overturned by the Alaska Supreme Court. In 1995, the
legislature adopted what are essentially the current provisions
in statute. Those provisions were taken from a model act that
was published a number of years ago. Subsequently, the Alaska
Supreme Court said that the legislature's adoption of the model
act was appropriate and correct. Therefore, Mr. Lisankie said
that [Section 52] is a departure from what the Supreme Court
said is acceptable.
6:50:12 PM
MR. LISANKIE reminded the committee that Sections 60 and 64
address requiring the division to have the following: two full-
time investigators investigating fraud, sufficient staff
support, a publicized toll free report number, as well as not
less than one-half of an attorney position.
MR. CATTANACH concurred [with Sections 60 and 64].
6:51:34 PM
REPRESENTATIVE KOTT moved that the committee adopt Conceptual
Amendment 4, which read [original punctuation provided]:
Page 34, Line 6;
Delete, "and insurance"
Page 34, Lines 8-9;
Delete, "an analysis and assessment of proposals for
workers' compensation and workers' compensation
liability insurance reform in Alaska;
(3)"
Page 34, Line 10;
Delete, "benefits and"
Insert, "medical"
Page 34, Line 13;
Delete, "(4) a review of compliance with current
Alaska workers' compensation laws;"
Insert, "(3) a review of the ACOM guidelines and
effect in other states;"
Page 34, Line 14;
Delete, "(5)"
Insert, "(4)"
Page 34, Line 16;
Insert, "(6) review of current Alaska, and other
states', vocational rehabilitation and return to work
programs."
Page 34, Line 16;
Delete, "(6)"
Insert, "(7)"
CHAIR ANDERSON objected for discussion purposes.
REPRESENTATIVE KOTT explained that Conceptual Amendment 4 would
establish some clear guidelines with regard to what the task
force is to review.
6:52:11 PM
MR. CATTANACH said that the ad hoc committee concurs with
Conceptual Amendment 4, but suggested that the inserted language
on page 34, line 13, should refer to medical treatment
guidelines not just ACOM guidelines.
REPRESENTATIVE KOTT said that was an oversight.
6:52:56 PM
REPRESENTATIVE ROKEBERG offered an amendment to Conceptual
Amendment 4, such that the language being inserted on page 34,
line 13, would say "a review of medical guidelines including the
ACOM guidelines ...;"
There being no objection, the aforementioned amendment to
Conceptual Amendment 4 was adopted. Therefore, Conceptual
Amendment 4, as amended, was before the committee.
CHAIR ANDERSON removed his objection to Conceptual Amendment 4,
as amended.
There being no further objection, Conceptual Amendment 4, as
amended, was adopted.
6:53:58 PM
REPRESENTATIVE KOTT moved that the committee adopt Conceptual
Amendment 5, which read [original punctuation provided]:
Page 35, Line 12;
Insert, "(4) The Task Force on Workers' Compensation
shall contract with a consultant specializing in
workers' compensation issues for the purpose of
researching information and conducting a comparative
analysis from other states on topics listed in section
(a). Such information shall be presented to the Task
Force on or before September 1, 2005.
Renumber subsections accordingly
REPRESENTATIVE KOTT explained that the consultant would analyze
the statement of work specified on [page 34 of Version L] and
thus the task force would have the information available.
Therefore, the process could be sped up such that the task force
would be able to report back to the legislature by the end of
December. He suggested that much information will be submitted.
There being no objection, Conceptual Amendment 5 was adopted.
REPRESENTATIVE KOTT moved that the committee adopt Conceptual
Amendment 6, which read as follows:
Page 36, line 31:
Delete "May 15, 2006"
Insert "September 30, 2005"
REPRESENTATIVE KOTT explained that with the adoption of
Conceptual Amendment 6 the information from [the medical
services review committee] would be provided around the same
time the consultant would be expected to provide his/her
information.
There being no objection, Conceptual Amendment 6 was adopted.
CHAIR ANDERSON closed public testimony.
6:57:21 PM
REPRESENTATIVE ROKEBERG reiterated his concern with regard to
the composition of the task force and the date of its report,
which is December 1, 2006. Therefore, he offered to work with
the drafter and the House Judiciary Standing Committee on those
matters. He opined that it's inappropriate to wait until the
session is over to make a report to the legislature.
6:58:14 PM
MR. CATTANACH suggested that due to the change encompassed in
Conceptual Amendment 6, the same date needs to be changed on
page 37, lines 4-5, in order to be consistent.
REPRESENTATIVE KOTT moved that the committee adopt Conceptual
Amendment 7, which read as follows:
Page 37, lines 4-5:
Delete "May 15, 2006"
Insert "September 30, 2005"
REPRESENTATIVE LEDOUX objected for discussion purposes. She
pointed out that the date on page 37, lines 4-5, refers to the
medical services review committee that has to provide a report
to the task force.
6:59:53 PM
REPRESENTATIVE KOTT withdrew Conceptual Amendment 7.
7:00:21 PM
REPRESENTATIVE KOTT turned to Representative Rokeberg's concern
and offered New Conceptual Amendment 7, as follows:
Page 35, line 14:
Delete "December 1"
Insert "prior to the first day of the convening of the
Twenty-Fifth Legislature"
REPRESENTATIVE KOTT explained that the task force would have its
work completed by the end of [2005] and then submit a report to
the legislature.
There being no objection, New Conceptual Amendment 7 was
adopted.
7:02:06 PM
REPRESENTATIVE KOTT moved that the committee adopt Conceptual
Amendment 8, as follows:
Page 35, line 15
Delete "2007"
Insert "2006"
REPRESENTATIVE CRAWFORD objected for discussion purposes. He
questioned whether any legislation [addressing this] would be
prepared in that first month of the Twenty-Fifth Legislature.
Therefore, he suggested maintaining the task force until the end
of the legislature.
REPRESENTATIVE KOTT opined that the report would be available
before the legislature convenes, and therefore the task force
members could be available for questions in that first month of
session.
REPRESENTATIVE CRAWFORD withdrew his objection.
There being no further objection, Conceptual Amendment 8 was
adopted.
[There was discussion regarding whether the date on the next
page, page 37, was changed. The discussion indicated that it
was changed, although the motion to do so was withdrawn.]
7:05:06 PM
MR. CATTANACH pointed out that [Version L] seems to have dropped
a provision addressing [AS 23.30.041(c)] that was included in
[Version I and CSSB 130(FIN)am]. The aforementioned provision
allows an employer and an employee to stipulate to an employee's
eligibility for reemployment benefit. The aforementioned speeds
up the qualification time of an injured worker by allowing the
employer to say that there is no question that the worker will
qualify and start the process.
7:06:30 PM
MR. LISANKIE clarified that the aforementioned statute was
interpreted to not be in statute and thus was included in CSSB
130(FIN)am, but not maintained in Version L.
REPRESENTATIVE KOTT pointed out that it was Section 13 of CSSB
130(FIN)am.
The committee took a brief at-ease from 7:07 p.m. to 7:08 p.m.
7:08:58 PM
REPRESENTATIVE ROKEBERG [moved that the committee adopt]
Conceptual Amendment 9, as follows:
Page 7, after line 30:
Insert the following new section;
"* Sec. 13. AS 23.30.041(c) is repealed and reenacted
to read:
(c) An employee and an employer may stipulate to the
employee's eligibility for reemployment benefits at
any time. If an employee suffers a compensable injury
and, as a result of the injury, the employee is
totally unable, for 45 consecutive days, to return to
the employee's employment at the time of injury, the
administrator shall notify the employee of the
employee's rights under this section within 14 days
after the 45th day. If the employee is totally unable
to return to the employee's employment for 60
consecutive days as a result of the injury, the
employee or employer may request an eligibility
evaluation. The administrator may approve the
request if the employee's injury may permanently
preclude the employee's return to the employee's
occupation at the time of the injury. If the employee
is totally unable to return to the employee's
employment at the time of the injury for 90
consecutive days as a result of the injury, the
administrator shall, without a request, order an
eligibility evaluation unless a stipulation of
eligibility was submitted. If the administrator
approves a request or orders an evaluation, the
administrator shall, on a rotating and geographic
basis, select a rehabilitation specialist from the
list maintained under (b)(6) of this section to
perform the eligibility evaluation. If the person
that employs a rehabilitation specialist selected by
the administrator to perform an eligibility evaluation
under this subsection is performing any other work on
the same workers' compensation claim involving the
injured employee, the administrator shall select a
different rehabilitation specialist."
There being no objection, Conceptual Amendment 9 was adopted.
7:11:57 PM
REPRESENTATIVE CRAWFORD remarked that he has lots of trepidation
about forwarding this legislation, although he characterized it
as a much better bill. He noted his appreciation to everyone
who has worked on this and expressed his hope that the ultimate
legislation looks like Version L.
7:13:13 PM
REPRESENTATIVE CRAWFORD moved to report HCS CSSB 130, Version
24-GS1112\L, Bullock, 5/4/05, as amended, out of committee with
individual recommendations, the accompanying fiscal notes, and
[HCR 19] allowing the title change. There being no objection,
HCS CSSB 130(L&C) was reported from the House Labor and Commerce
Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
7:14:30 PM.
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