04/07/2010 03:15 PM House LABOR & COMMERCE

         SB 159-WORKERS' COMPENSATION FUNERAL EXPENSES                                                                      
                                                                                                                                
3:23:45 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON announced  that the first order of  business would be                                                               
SENATE  BILL NO.  159,  "An Act  increasing  the maximum  funeral                                                               
expenses payable  as a workers'  compensation death  benefit; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
3:23:58 PM                                                                                                                    
                                                                                                                                
SENATOR JOE  PASKVAN, Alaska  State Legislature,  paraphrased his                                                               
sponsor statement,  which read  as follows  [original punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
                                                                                                                                
     Senate Bill  159 addresses one section  of the Workers'                                                                    
     Compensation  Statutes  in  Alaska  and  proposes  that                                                                    
     reasonable  and  necessary  funeral  expenses  will  be                                                                    
     increased from $5,000 to $10,000.                                                                                          
                                                                                                                                
     The funeral expense for a worker who is killed on the                                                                      
     job has not been adjusted since 2000, even though the                                                                      
     cost of a  funeral has risen significantly  in the last                                                                    
     decade.                                                                                                                    
                                                                                                                                
     Last  year, according  to the  Department of  Labor and                                                                    
     Workforce Development, there were  17 fatalities in the                                                                    
     State of  Alaska that required payment  of the workers'                                                                    
     compensation funeral expenses.                                                                                             
                                                                                                                                
     As  a result  of  this legislation,  there  will be  no                                                                    
     financial impact to the state  and the National Council                                                                    
     on  Compensation  Insurance   estimates  that  "overall                                                                    
     workers  compensation  system   costs  in  Alaska  will                                                                    
     increase by less than 0.1%."                                                                                               
                                                                                                                                
SENATOR PASKVAN reported on  worker-related fatalities during the                                                               
past decade.  The highest  number of worker-related fatalities in                                                               
one year totaled 26 while the  fewest numbered 15 fatalities.  He                                                               
explained that the cost of  embalming, caskets, urns, tombstones,                                                               
transportation of the  body, plot fees, are among  a wide variety                                                               
of reasonable and  necessary funeral expenses.   The expenses are                                                               
significant,  he stated.   This  bill  is not  designed to  cover                                                               
expenses  for  an extravagant  funeral,  but  one that  would  be                                                               
considered as  adequate or reasonable.   This bill will  not have                                                               
any fiscal impact to the state,  he stated.  The overall Workers'                                                               
Compensation  costs  in Alaska  are  over  $200 million  and  the                                                               
proposed increase  in funeral  costs would be  paid for  from the                                                               
system  costs.     The  current  funeral   benefit  has  remained                                                               
unchanged  in the  last decade,  while the  cost of  funerals has                                                               
continued  to increase.    He  explained this  bill  came to  his                                                               
attention when  parents whose son  was killed contacted  him when                                                               
they received $5,000 to cover a $14,000 funeral bill.                                                                           
                                                                                                                                
3:29:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NEUMAN asked  the reason  why Alaska  has highest                                                               
Workers' Compensation premiums in the U.S.                                                                                      
                                                                                                                                
SENATOR  PASKVAN stated  that  he  was unsure.    He thought  the                                                               
reason for  the higher Workers'  Compensation costs in  Alaska is                                                               
that Alaska is a rugged land  so workers tend to hold higher risk                                                               
jobs.   He pointed out that  the projected effect of  .01 percent                                                               
effect  would  not  have  a material  effect  on  increasing  the                                                               
Workers'   Compensation  costs.     However,   this  bill   would                                                               
significantly affect the overall  reimbursement of funeral costs.                                                               
He believed  this represents prudent  activity and the  intent of                                                               
SB 159 is to address funeral  expenses for workers who are killed                                                               
on the job.   The larger issue of Workers'  Compensation costs is                                                               
not addressed in this bill, he stated.                                                                                          
                                                                                                                                
CHAIR  OLSON  offered  another  bill  will  address  the  medical                                                               
components of Workers' Compensation costs.                                                                                      
                                                                                                                                
3:31:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE T.  WILSON asked  of the  17 fatalities,  how many                                                               
estates  received   only  $5,000,  and  whether   another  policy                                                               
provided additional coverage.                                                                                                   
                                                                                                                                
SENATOR PASKVAN  related that  in all  17 instances,  the estates                                                               
would  have  received  up  to  $5,000  in  Workers'  Compensation                                                               
funeral expenses.   However, if families had  any other coverage,                                                               
this coverage  would be in  addition to it.   This bill  will not                                                               
affect  marketplace  contracts  nor  does the  bill  affect  life                                                               
insurance or any ancillary union benefits.                                                                                      
                                                                                                                                
REPRESENTATIVE T.  WILSON expressed concern over  the differences                                                               
in  the percentage  of compensation  for a  widower or  a widower                                                               
with one  child.  She asked  for an explanation of  the different                                                               
rates of coverage.                                                                                                              
                                                                                                                                
SENATOR PASKVAN offered to address  that point later.  The intent                                                               
of  the bill  is not  to address  the component  of the  Workers'                                                               
Compensation system, he stated.                                                                                                 
                                                                                                                                
3:33:15 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON   offered  to  answer  Representative   T.  Wilson's                                                               
question.    He  explained  that  the  rates  represent  standard                                                               
industry practice  and are  similar to  how it  is done  in other                                                               
states, which he  believed was wording from  the National Council                                                               
on Compensation Insurance,  Inc. (NCII).  He  concurred that this                                                               
bill  would only  increase the  funeral benefits  from $5,000  to                                                               
$10,000.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  T.  WILSON suggested  while  this  bill does  not                                                               
specifically address  the Workers' Compensation rates  that it is                                                               
possible to fix the issue.                                                                                                      
                                                                                                                                
3:33:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LYNN  asked whether  this  coverage  is over  and                                                               
above any Veterans' benefits.                                                                                                   
                                                                                                                                
SENATOR PASKVAN offered  his belief that this  would not displace                                                               
the veterans' benefits.   This would cover  anyone injured during                                                               
the scope of their service.                                                                                                     
                                                                                                                                
[SB 159 was held over.]