Legislature(2005 - 2006)BELTZ 211
03/24/2005 02:00 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB137 | |
| SB140 | |
| SB2 | |
| SB130 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 2 | TELECONFERENCED | |
| = | SB 130 | ||
| = | SB 140 | ||
| = | SB 137 | ||
SB 130-WORKERS' COMPENSATION
CHAIR CON BUNDE announced SB 130 to be up for consideration.
BARBARA HUFF-TUCKNESS, Alaska Labor Management Ad Hoc Committee,
referenced its letter in the committee packets. The Ad Hoc
Committee wanted her to explain 13 concerns regarding SB 130.
2:24:16 PM
Many of the Ad Hoc ideas are in SB 130, many other items are
included also that it has great concerns with. The first is
reimbursement of medical costs. The administration proposes to
roll back rates to 1999 rates. "We do not believe this is
reasonable." Medial costs are the largest driving factor in
workers' comp costs.
The Ad Hoc Committee requested information from both insurance
companies regarding the medical costs in November and have not
received that information and, therefore, can't make a
reasonable recommendation and deferred the issue until next
year. Language in SB 130 would impact the medical community in
such a way that physicians might decide to no longer serve
injured workers.
2:26:28 PM
The second letter had to do with the ACOM guidelines. The
committee decided it needed more information on this issue as
well. What little information it has received came from
California that recently adopted ACOM guidelines. There are
problems with how insurance companies are applying the
guidelines and denying medical claims. Either they are not being
clearly defined or are not being addressed at all.
2:28:01 PM
The third item is voc rehab and it is another issue the
committee did not receive information on. It is a huge cost
factor within the workers' comp system. Members discussed
turning it into a return to work program, but didn't receive
available information.
2:29:20 PM
Item four addresses the return to work program that she
mentioned in conjunction with the voc rehab. The committee was
looking at it in conjunction with deleting the second injury
fund. It did not believe the fund services the employer and
believes that there needs to be a truly responsive return to
work program for injured people.
2:30:03 PM
CHAIR BUNDE asked her to flesh that out.
2:30:13 PM
MS. HUFF-TUCKNESS responded that some states actually have a
return to work program. Some employers within the state of
Alaska have established a return to work program or modified
work within their own corporate structure. Some states have
formalized those programs with their workers' comp programs.
2:31:29 PM
She went on to item 5 that did not have much discussion in the
Ad Hoc Committee. But there is some concern that this would
actually increase costs to the Workers' Comp program even though
it addresses hiring attorneys to represent the injured workers.
The committee has not seen any statistical information that
would prove that one way or the other.
2:32:46 PM
The sixth item deals with the commission and the de novo review.
The committee has concerns with replacing the superior court
with a new layer of bureaucracy. A less costly idea the Ad Hoc
Committee had is having a super-senior workers' comp board
consisting of two labor and two management with a Workers' Comp
hearing officer. They would hear the appeals of decisions from
the Workers' Comp Board and would have the ability to decide
questions limited to specific issues of law. The senior members
of the board would have more knowledge of the law and would
follow the intent of the statutes without adding the cost of the
bureaucracy.
2:35:08 PM
CHAIR BUNDE asked about item 7, the fraud statute.
MS. HUFF-TUCKNESS didn't think the fraud language went far
enough. The department has never followed up on fraud that had
proof. Ad Hoc wanted greater enforcement.
2:38:06 PM
She said the temporary seasonal definition, item 8 in the
letter, affects employers around the state, but affects
construction workers the most. She noted that Ad Hoc language in
the letter was fair for the injured worker as well as the
business.
2:38:54 PM
She said she looked forward to working with the committee and
administration.
2:40:17 PM
PAUL LISANKIE, Director, Division of Workers' Compensation,
Department of Labor and Workforce Development (DOLWD), had no
further remarks.
CHAIR BUNDE asked him to comment on the fraud provisions in item
7 of the Ad Hoc Committee letter. He also asked to know if the
return to work program was successful in other states.
2:41:43 PM
SENATOR DAVIS said she wanted to know if other states had set up
a commission to bypass the superior court.
MR. LISANKIE replied that he has looked at other states'
statutes and some have an executive branch committee that hears
appeals of workers' compensation matters. He is not sure any
have precisely the type of proposal the Ad Hoc Committee
envisioned. That is more of a reconsideration by a different
group of the same board that made the original decision as
opposed to sending the decision to separate entity like an
appeals commission. The major difference is that under SB 130,
the appeals commission would take the place of Superior Court
and he believed that would be somewhat quicker.
2:43:56 PM
KEVIN SMITH, Executive Director, Alaska Municipal League Joint
Insurance Association (AMLJIA), said it represents 140 different
municipalities and school districts in Alaska. It permits those
public entities to self-insure as a group when they may not have
the resources to self-insure as individual entities. He said:
As far as risk financing mechanisms go, being able to
self insure as a group is a fairly efficient way to do
this. Essentially, to pay the cost of losses and pay
the cost of reinsurance and pay the cost of overhead,
that's about what goes into calculating rates. So,
there's no shareholder profit necessary as you get in
a commercial insurance arrangement. The AMLJIA has a
$300,000 self-insured retention. So, for every
workers' compensation loss that we have, we have to
fund enough to cover at least the first $300,000 of
the loss. Above and beyond that, we purchase
reinsurance or insurance for insurance companies to
make sure that if somebody is seriously injured, that
there's adequate resources to cover it.
But despite the efficiencies in the system, itself,
the costs continue to rise for the public sector in
Alaska just as they have risen for the private sector
in Alaska. The Workers' Compensation system from our
perspective is broken and needs to be fixed. The cost
has gotten to a point where a number of municipalities
can't afford to purchase the insurance any more. With
the PERS TRS problems on their plate, lack of
municipal assistance and revenue sharing, increased
fuel costs, utility costs, the increased demands
essentially on the public coffers with less resources
have forced me to cancel at least 10 municipalities in
December from coverage for Workers' comp for property
and for liability and I have canceled several more
since then.... It's a serious situation.
He said that SB 130 is a step in the right direction for
containing the increasing costs for Workers' Compensation. Some
of the positives are the ability to stipulate to agreements when
both parties are represented without getting board approval,
streamlining the voc rehab process and having a preferred
provider list for employers that is voluntary for employees.
Generic drugs are a good thing and guidelines for medical care
is a positive step. Some offset for PERS and TRS or occupational
disability is another good idea as well as phasing out the
second injury fund.
2:47:40 PM
CHAIR BUNDE asked what the public entities who are going without
workers' comp doing.
MR. SMITH replied that some of them are bending state law, but
most are scrambling to find the resources to get back into the
program. "A number of the communities have gotten to the point
where there's not a lot of employees getting hurt."
2:49:29 PM
CHAIR BUNDE reflected that no one is happy with the current
situation and he hopes to find something to make it better.
COMMISSIONER GREG O'CLARAY, Department of Labor and Workforce
Development (DOLWD), thanked the chair for having hours of
testimony on this issue.
CHAIR BUNDE said he hoped to have a CS next week. He adjourned
the meeting at 2:52:16 PM.
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