Legislature(2017 - 2018)BARNES 124
02/23/2018 03:15 PM House LABOR & COMMERCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB340 | |
| HB341 | |
| HB342 | |
| HB343 | |
| HB346 | |
| HB303 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 340 | TELECONFERENCED | |
| *+ | HB 341 | TELECONFERENCED | |
| *+ | HB 342 | TELECONFERENCED | |
| *+ | HB 343 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 346 | TELECONFERENCED | |
| += | HB 303 | TELECONFERENCED | |
HB 303-WORKERS' COMP; REHAB/REEMPLOYMENT
4:04:40 PM
CHAIR KITO announced that the final order of business would be
HOUSE BILL NO. 303, "An Act relating to workers' compensation
benefits for the rehabilitation and reemployment of injured
employees."
4:05:13 PM
GREG CASHEN, Acting Commissioner, introduced HB 303 on behalf of
the House Rules Committee by request of the governor. He gave a
brief introduction of the proposed bill. He said HB 303 would
improve the process of determining eligibility and developing
reemployment plans for workers who cannot return to their
previous jobs due to work-related injury. He stated HB 303
would update an outdated system for getting workers back to work
quickly.
4:06:17 PM
REPRESENTATIVE STUTES asked who makes the determination of
whether $19,300 is enough money for rehabilitation services.
4:06:43 PM
MARIE MARX, Director, Alaska Workers' Compensation Division,
Department of Labor & Workforce Development (DLWD), answered
questions in the hearing on HB 303. She answered the amount was
set in statute at $13,300 and that amount was adjusted for
inflation.
REPRESENTATIVE STUTES asked whether the cost of the service
could exceed that amount.
MS. MARX said that $19,300 would be the maximum amount that the
parties can pay. She added that the parties can always agree to
pay more via a settlement agreement. She gave the example of a
case in which the parties agreed to pay the full amount of the
service in the interest of getting the employee back to work.
4:08:30 PM
REPRESENTATIVE JOSEPHSON asked whether a person gets temporary
disability prior to medical stabilization.
MS. MARX answered in the affirmative. She explained that under
workers compensation law, a person with personal partial
impairment received temporary total disability every two weeks
until they can return to work.
REPRESENTATIVE JOSEPHSON asked for confirmation that an injured
employee would have to use permanent partial impairment money
for their living expenses.
MS. MARX said that an injured worker will always get wage loss
benefits while they are recovering. If they are owed a
permanent partial impairment amount, that must be paid out every
two weeks and that would not change in the proposed bill. She
added the proposed bill would allow injured employees to choose
when to enter the reemployment program starting 90 days from
when the benefits ceased.
4:10:48 PM
REPRESENTATIVE STUTES asked for confirmation that it would be
the attending physician who would make the determination of
whether an individual is medically stable.
MS. MARX said the reemployment benefit administrator is the one
who makes a determination on eligibility based on the
recommendation of the rehabilitation specialist in charge.
There is no requirement for the doctor, although generally the
treating doctor's opinion is given deference.
4:11:59 PM
REPRESENTATIVE JOSEPHSON said that even though there is a
requirement that a reemployment plan begin at the 91st day, it
seems to him that people are not moving forward in a timely way.
MS. MARX said that part of the bill does provide clear
timeframes within which a plan has to move forward. She said
that currently, if a specialist comes up with a plan, the
parties must either agree with or deny the plan within 30 days.
If there is a denial, the plan administrator has to make a
determination. She said currently there is no requirement to
take action and the proposed bill would fix that problem. She
added in fiscal year 2017 [FY 17], 564 injured workers were
referred for the evaluation process, and 148 were found
eligible. She explained that many were not ready for the
evaluation. She added that 14 workers had completed
reemployment plans. She said the primary driver was workers
settling for benefits and not reentering the reemployment
system. She underlined the primary goal is returning injured
workers to work.
4:15:05 PM
REPRESENTATIVE JOSEPHSON asked how the stakeholders would manage
the system and why so few workers are found eligible.
MS. MARX answered the first question by stating the proposed
bill would change the system to a voluntary system that begins
once the worker is medically stable. She added there is a
declining pool of certified specialists in the state.
REPRESENTATIVE JOSEPHSON restated his question.
MS. MARX answered the question was why so many people are
referred for an evaluation. She stated if an individual returns
to work on the 91st day, they still have to go through the time
and expense of a reemployment evaluation.
4:18:32 PM
REPRESENTATIVE KNOPP asked how long the total temporary
disability (TTD) payments continue.
MS. MARX said TTD is outside the reemployment system. She
listed the benefits as medical, lost wages, death benefits in
the case of loss of life, and retraining.
REPRESENTATIVE KNOPP suggested the continuation of payments may
be a motivator not to reenter employment. He asked when the 90-
day time period begins.
MS. MARX said it is 90 days of consecutive time off work.
REPRESENTATIVE KNOPP asked if the time frame is why the employee
does not meet the eligibility requirement.
MS. MARX answered that some have already returned to work or
simply do not want to go through the training program and there
is no way for them to exit the system.
REPRESENTATIVE KNOPP said that what they are required to do is
go through the evaluation.
MS. MARX described the process and stated it takes quite a long
time. She reiterated the process may be going on once the
individual is already back at work.
4:23:50 PM
CHAIR KITO asked if the evaluation has to take place after 90
days from filing of the injury.
MS. MARX said the 90 days refers to days off work. She added
once the division is informed that the employee has been off
work 90 days, the process begins.
CHAIR KITO asked if the process was mandated to begin at day 91.
MS. MARX said that process has to begin even if "everyone knows"
the person is back at work, recovering from back surgery, or
simply does not want to go through the program.
CHAIR KITO said that with this change the department has the
discretion to determine whether a reevaluation has to take place
and therefore focus on the individuals that do want to
participate.
MS. MARX answered the proposed bill would change it to a
voluntary system. The department would still have a mandatory
meeting with the employee to explain the system.
4:26:22 PM
REPRESENTATIVE JOSEPHSON provided a hypothetical situation in
which a plumber breaks an arm and then returns to work on the
90th day. He asked whether that person is still eligible for
the money even though they are fine for work.
MS. MARX clarified that an individual is ineligible [for
payments] under statute when they return to work, however
currently they still have to go through the evaluation process.
The proposed bill would change that and focus on the goal of
aiding workers who cannot return to work.
4:28:28 PM
REPRESENTATIVE SULLIVAN-LEONARD asked about the change in date
on page 2, line 30 of the proposed bill from May 1 to October 1.
MS. MARX answered that currently data collection is part of the
system. She added the insurance companies are relied upon for
that data. She said audits have to be carried out on those
reports and May was too early for the one person in the
department to complete those audits.
4:30:12 PM
REPRESENTATIVE KNOPP asked why the department is involved in the
process when the insurance companies are paying out.
MS. MARX said ideally, they would not be needed, but the
department was there to ensure any issues are resolved.
4:31:53 PM
CHAIR KITO, after ascertaining that there was no one who wished
to testify, closed public testimony on HB 303.
CHAIR KITO said there are amendments to be offered to HB 303.
Before continuing with the amendments, he stated the following:
This bill was drafted by the Department of Law, which
is not the same as having our Legislative Legal
Department draft it; so, there will be something in
motion when we get to the point of being able to move
the bill that will just say that we request our legal
department to make our legislative drafting manual
conforming amendments to the bill. Those amendments
will not have the impact of substantively changing
anything we're doing; they are just the technical way
we write bills different than the Department of Law.
So, that will be part of our motion when we move
forward.
4:33:07 PM
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 1, labeled 30-
GH2709\A.1, Wallace, 2/20/18, which read as follows:
Page 11, line 2:
Delete "$19,300"
Insert "$30,000"
REPRESENTATIVE JOSEPHSON explained Amendment 1. He said there
was testimony from rehabilitation specialists saying the
increase in the amount to $19,300 was still too low. He
remarked that tuition has outpaced the rate of inflation. He
said it does not account for tools and equipment, tuition, or
transportation.
4:36:50 PM
REPRESENTATIVE WOOL asked if the benefit is for tuition and
training or for equipment.
MS. MARX shared her understanding that the amount is for the
cost of the plan.
4:38:50 PM
BETH TUSTEN, Reemployment Benefits Manager, Workers Compensation
Division, Department of Labor & Workforce Development (DLWD),
answered questions in the hearing on HB 303. She answered that
the amount is for costs incurred as a result of participating in
the plan and could be for such things as transportation costs,
books and supplies, or tuition for a two-week certification
course.
4:39:58 PM
CHAIR KITO asked whether the amount in the proposed bill is a
lower limit or a maximum amount.
MS. TUSTEN said the amount in the bill is the maximum amount for
a plan submitted for plan review.
4:40:30 PM
REPRESENTATIVE WOOL asked whether someone might select a
costlier program if the limit is higher.
MS. MARX answered in the affirmative. She added the amount of
$19,300 would generally cover the cost of an associate degree.
REPRESENTATIVE WOOL asked about the 50 percent increase in the
amount of the benefit.
MS. MARX answered that there is a balance between benefits to
injured workers and the cost to the system. She added it is too
speculative to say how many would take advantage of system.
REPRESENTATIVE WOOL asked whether employee [expenses] often went
to the maximum at $13,300.
MS. MARX said she didn't have the data before her, but the
amount was not effective at $13,300. She surmised most people
will probably opt for the higher amount, raising the system
costs.
4:44:24 PM
REPRESENTATIVE KNOPP asked if there was data of how many of the
1,200 cases had reached an agreement to pay out more than the
maximum.
MS. MARX clarified there were 20,000 reports of injuries and of
those, 1,200 a year were those cases with a dispute. She
suggested the question was how many injured workers settled for
reemployment benefits. She answered in FY 17, 148 workers were
found eligible for reemployment benefits. In the same fiscal
year, 164 received settlement funds. She explained that 44 were
never referred for an evaluation but settled reemployment
benefits; 4 settled reemployment benefits before an evaluation
was completed; 36 were found not eligible but still settled for
reemployment benefits; 23 were found eligible and settled before
developing a plan; 43 agreed to a plan and then settled before
the plan was approved; and 14 had a plan approved and settled
and exited the system. She added the division had no control
over settlements.
REPRESENTATIVE KNOPP said it sounds like most people were
settling for a cash settlement. He suggested the number offered
in the amendment would inspire more to settle reemployment
benefits.
MS. MARX said no, because under HB 303 injured workers can no
longer settle for a lump sum. She added the amount was not
intended to cover more than retraining costs.
4:49:06 PM
REPRESENTATIVE STUTES said she was hearing there would be no
more permanent partial disability benefits.
MS. MARX clarified the proposed bill was not intended to affect
an injured workers' ability to settle non-reemployment benefits.
REPRESENTATIVE WOOL asked whether the money received would only
be used for retraining purposes and how the money would be
disbursed to the individual.
4:50:51 PM
MS. MARX said that when the money is paid through a plan there
is accountability. She specified that with a settlement, the
department is no longer involved.
REPRESENTATIVE WOOL asked about the cash settlement for training
and whether that could be taken and not applied to training.
MS. MARX said that currently that was not an option.
4:52:29 PM
MS. TUSTEN added that plan expenses are paid as incurred through
reimbursement and are not simply handed over to the injured
worker.
4:53:03 PM
CHAIR KITO asked for a roll call vote on Amendment 1
A roll call vote was taken. Representative Josephson voted in
favor of Amendment 1. Representatives Sullivan-Leonard, Wool,
Stutes, Birch, Knopp, Stutes, and Kito voted against it.
Therefore, Amendment 1 failed by a vote of 6-1.
4:54:07 PM
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 2, labeled 30-
GH2709\A.2, Wallace, 2/21/18, which read as follows:
Page 12, lines 21 - 26:
Delete all material and insert:
* Sec. 15. AS 23.30.041(q) is amended to read:
"(q) Notwithstanding AS 23.30.012, after medical
stability has been determined and a physician has
predicted that the employee may have a permanent
impairment that may cause the employee to have
permanent physical capacities that are less than the
physical demands of the employee's job at the time of
injury, and, upon approval of the board and the
assigned rehabilitation specialist, an employee may
waive any benefits or rights under this section,
including an eligibility evaluation and benefits
related to a reemployment plan. To waive any benefits
or rights under this section, an employee must file a
statement under oath with the division to notify the
parties of the waiver and to specify the scope of
benefits or rights that the employee seeks to waive.
The statement must be on a form prescribed or approved
by the director. The division shall serve the notice
of waiver on all parties to the claim within 10 days
after filing. The waiver is effective upon approval of
the board and the assigned rehabilitation specialist
[SERVICE TO THE PARTY]. A waiver effective under this
subsection discharges the liability of the employer
for the benefits or rights contained in this section.
The waiver may not be modified under AS 23.30.130."
Page 16, lines 3 - 4:
Delete "repealed and reenacted"
Insert "amended"
REPRESENTATIVE JOSEPHSON explained that Amendment 2 would allow
for settlement of all benefits and would require the board to
find settlement is in the worker's best interest in all
circumstances. He underlined that in current law there is a
presumption that settling is not in the worker's best interest.
He said that some injured workers use the lump sum to start a
new business or pay medical bills. He said he was concerned the
proposed bill would leave the worker less well off.
CHAIR KITO maintained his objection.
A roll call vote was taken. Representative Josephson voted in
favor of Amendment 2. Representatives Wool, Stutes, Birch,
Knopp, Sullivan-Leonard, and Kito voted against it. Therefore,
Amendment 2 failed by a vote of 6-1.
4:58:51 PM
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 3, labeled 30-
GH2709\A.3, Wallace, 2/20/18, which read as follows:
Page 12, following line 31:
Insert a new bill section to read:
"* Sec. 17. AS 23.30.041(r)(7) is amended to read:
(7) "remunerative employability" means
having the skills that allow a worker to be
compensated with wages or other earnings equivalent to
at least 75 [60] percent of the worker's gross hourly
wages at the time of injury; if the employment is
outside the state, the stated 75 [60] percent shall be
adjusted to account for the difference between the
applicable state average weekly wage and the Alaska
average weekly wage."
Renumber the following bill sections accordingly.
Page 16, line 4:
Delete "sec. 17"
Insert "sec. 18"
Page 16, line 5:
Delete "sec. 19"
Insert "sec. 20"
Page 16, line 6:
Delete "17, and 19"
Insert "18, and 20"
Page 16, line 12:
Delete "sec. 17"
Insert "sec. 18"
Delete "sec. 18"
Insert "sec. 19"
Page 16, line 14:
Delete "17, and 18"
Insert "18, and 19"
Page 16, line 23:
Delete "sec. 17"
Insert "sec. 18"
Delete "sec. 18"
Insert "sec. 19"
Page 16, line 24:
Delete "17, and 18"
Insert "18, and 19"
Page 16, line 26:
Delete "sec. 17"
Insert "sec. 18"
Page 16, line 27:
Delete "sec. 17"
Insert "sec. 18"
CHAIR KITO objected for the purpose of discussion.
4:58:54 PM
REPRESENTATIVE JOSEPHSON explained Amendment 3. He stated the
proposed bill would determine a benefit of 60 percent of the
injured employee's wage. He said the goal for remunerative
employment would be 75 percent in Amendment 3.
REPRESENTATIVE KNOPP said he would support Amendment 3 but for
the fact that the employee might be comfortable with the job
type. He said he was not sure how the amendment would work if
the employee sought to be trained in a different job.
REPRESENTATIVE JOSEPHSON responded he feels the targets should
be more ambitious than 60 percent of the prevailing wage.
REPRESENTATIVE WOOL asked if Amendment 3 would create a target
for when the individual returns to work.
5:03:31 PM
MS. MARX said that 60 percent is the target for a plan. She
gave the example of someone working on the North Slope earning
$68 per hour. She remarked finding an entry level job at $68
per hour is difficult to accomplish. She underlined that due to
the problem, workers are allowed to enter plans that are lower
than 60 percent. She added that changing the target 75 percent
would mean fewer plans would be approved.
REPRESENTATIVE WOOL asked whether there is a preponderance of
North Slope employees in the program.
MS. MARX said that heavy jobs such as North Slope work or
nursing do build up a lot of overtime and the amounts to be
considered can be quite high.
5:06:39 PM
MS. TUSTEN reiterated that 75 percent would put retraining for
other jobs out of reach for most workers.
CHAIR KITO asked how the 60 percent amount was arrived at
initially.
MS. MARX deferred to Ms. Tusten.
MS. TUSTEN stated she did not know.
5:08:07 PM
A roll call vote was taken. Representative Josephson voted in
favor of Amendment 3. Representatives Stutes, Knopp, Birch,
Sullivan-Leonard, Wool, and Kito voted against it. Therefore,
Amendment 3 failed a vote of 6-1.
5:08:56 PM
REPRESENTATIVE JOSEPHSON advised that Amendment 4 would not be
offered.
5:09:08 PM
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 5, labeled 30-
GH2709\A.4, Wallace, 2/21/18, which read as follows:
Page 9, line 28, following "subsection.":
Insert "However, if the board determines that
benefits under this section should not have been
denied, the board may award the stipend compensation
that would have been paid but for the employer's
controversion and the award may include more than one
year of stipend compensation for the period before the
date of plan approval."
REPRESENTATIVE JOSEPHSON spoke to appeals of workers'
compensation claims. He gave the example of the case of
Branchflower v. Anchorage School District and said the decision
had been that the employee had been wrongfully denied a claim
and had remained without benefits due to the erroneous decision
made by an insurance company. He explained that Amendment 5
would prevent such a circumstance.
5:11:33 PM
MS. MARX said she had just received Amendment 5 and so was
neither for nor against it.
REPRESENTATIVE JOSEPHSON asked whether the scenario he had
described is possible.
MS. MARX said that if an injured worker is found not eligible
and successfully appeals, they would not have been paid benefits
in the interim period as they were not approved. She said HB
303 limits benefits before a plan is approved to one year. She
specified HB 303 would not provide for a retroactive lump sum.
She added current law provides for two years of biweekly wage
benefits. She added that the benefits would continue until the
issue is resolved. She said the injured worker could get
benefits retroactively. She suggested providing a lump sum was
a policy call. She reiterated that the department had not had
time to examine the impacts of the amendment.
5:14:37 PM
REPRESENTATIVE KNOPP asked whether the employee can appeal the
board and beyond that to the insurance company and on to the
superior court.
MS. MARX answered that every decision can be appealed to the
[Alaska Workers' Compensation] Appeals Commission and beyond
that to the Alaska Supreme Court.
REPRESENTATIVE KNOPP asked whether, if it were determined the
board had erred in its decision, the court could award the
compensation amount in Amendment 5.
MS. MARX answered that the division had not had time to examine
the impacts of Amendment 5.
5:16:41 PM
REPRESENTATIVE WOOL asked whether the injured worker who is
denied and then awarded compensation would get less than the
amount that the Amendment would compensate.
MS. MARX said the intent of Amendment 5 appeared to be a
retroactive lump sum for the time without benefits. She pointed
out "the clock is not ticking yet" during an appeals process.
REPRESENTATIVE WOOL asked what the benefit would be during the
appeals process.
MS. MARX answered there is no benefit unless an appeal is
successful.
REPRESENTATIVE WOOL asked whether an injured worker who is
denied benefits would get nothing unless the appeal is
successful.
5:19:27 PM
MS. MARX said that under the current law a worker who is denied
benefits does not receive compensation. She added the issue is
what happens in the time of the appeal. She said there is a
one-year limit before a plan is approved, and a two-year limit
from when the plan is approved.
5:21:13 PM
REPRESENTATIVE STUTES asked what would happen if the appeal
takes three years. She surmised she would receive nothing for
the three years.
MS. MARX said the time limit is always two years for a plan.
REPRESENTATIVE STUTES suggested an appeal takes three years to
determine, and the limit is two years.
REPRESENTATIVE KITO said that it seems this is an issue that was
not addressed when the House Rules Committee brought the
proposed bill forward.
REPRESENTATIVE KITO maintained his objection.
5:23:45 PM
A roll call vote was taken. Representatives Josephson and
Stutes voted in favor of Amendment 5. Representatives Knopp,
Sullivan-Leonard, Wool, and Kito voted against it. Therefore,
Amendment 5 failed by a vote of 4-2.
5:24:25 PM
REPRESENTATIVE JOSEPHSON stated his concerns with the bill. He
gave examples of workers who were not awarded reemployment
benefits. He said he did not think the proposed bill was
ungenerous but could be a better bill.
5:28:34 PM
REPRESENTATIVE SULLIVAN-LEONARD commented she felt the bill was
good and would help the workers' compensation process.
5:29:44 PM
REPRESENTATIVE WOOL moved to report HB 303 out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, it was so ordered.
CHAIR KITO added, "We will make sure that we authorize
Legislative Legal [and Research] Services to make any technical
and conforming changes as necessary to comply with the
legislative drafting manual."
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB303 A.1.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 303 |
| HB303 A.2.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 303 |
| HB303 A.3.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 303 |
| HB303 A.4.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 303 |
| HB346 Ver D.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 346 |
| HB 340 Sectional Analysis 2.13.18.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 340 |
| HB 340 Ver A 2.13.18.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 340 |
| HB 340 Transmittal Letter 2.13.18.PDF |
HL&C 2/23/2018 3:15:00 PM |
HB 340 |
| HB340 Fiscal Note DCCED-DBS 2.2.18.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 340 |
| HB 341 Sectional Analysis 2.13.18.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 341 |
| HB 341 ver A 2.13.18.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 341 |
| HB 341 Transmittal Letter 2.13.18.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 341 |
| HB 341 Hearing Request 2.13.18.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 341 |
| HB 342 Transmittal Letter 2.13.18.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 342 |
| HB 342 Hearing Request 2.13.18.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 342 |
| HB 342 ver A 2.13.18.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 342 |
| HB 342 Sectional Analysis 2.13.18.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 342 |
| HB 343 Transmittal Letter 2.13.18.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 343 |
| HB 343 ver A 2.13.18.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 343 |
| HB343 Fiscal Note DCCED-DBS 1.24.18.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 343 |
| HB 343 Sectional 2.13.18.pdf |
HL&C 2/23/2018 3:15:00 PM |
HB 343 |