Legislature(2005 - 2006)BELTZ 211
05/02/2006 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB150 | |
| HB31 | |
| HB392 | |
| HB382 | |
| HCR34 | |
| SB241 | |
| HCR4 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 392 | TELECONFERENCED | |
| + | HB 382 | TELECONFERENCED | |
| + | HCR 34 | TELECONFERENCED | |
| HCR 4 | |||
| + | TELECONFERENCED | ||
| += | HB 150 | TELECONFERENCED | |
| += | HB 31 | TELECONFERENCED | |
| += | SB 241 | TELECONFERENCED | |
1:45:24 PM CSSSHB 31(FIN)-WORKERS' COMP: DISEASE PRESUMPTION CHAIR CON BUNDE announced CSSSHB 31(FIN) to be up for consideration. REPRESENTATIVE TOM ANDERSON, sponsor of HB 31, said he didn't have any more information to add. HEATH HILYARD, staff to Representative Anderson, added that the sponsor's office hadn't received any new materials. JOHN COMBS, Mayor, City of Palmer, said he had previously been in the insurance business for 23 years. He noted that his brother, Michael Combs, as president of the Alaska Independent Insurance Agents and Brokers, wrote a letter in opposition to HB 31. MAYOR COMBS said the primary problem in putting the impetus on the municipality for presumption of illness in certain classes of occupations is that the municipalities' attorneys and doctors would have no defense to prove someone didn't develop a disease on the job. He thought the intent of this legislation was noble, but medical coverage is already available to his workers and it is much more appropriate than workers' compensation in cases where something is done over a period of time and it's presumed that it was because of the job. 1:48:09 PM CHAIR BUNDE asked if Palmer has a city fire department. MAYOR COMBS replied yes. CHAIR BUNDE asked if they have good health insurance coverage in addition to workers' compensation. MAYOR COMBS replied yes. He explained that workers' compensation was designed for incidents that were sudden and accidental and so the employee doesn't have to sue the employer for coverage. Adopting this legislation would make workers' compensation rates go up and prescreening could also lead to big problems, because the municipality currently doesn't do that for any employee. 1:50:36 PM CHAIR BUNDE asked if a firefighter in his community was diagnosed with lung cancer and this bill passed, at what point would he decide it goes to workers' compensation. MAYOR COMBS replied that person would be on medical leave if he developed lung cancer; a workers' compensation claim would not be submitted. CHAIR BUNDE asked if passing this bill would make that possible. MAYOR COMBS replied yes. CHAIR BUNDE wanted to know if he would still have the option to use the health insurance and would it automatically be a workers' compensation claim. MAYOR COMBS replied no; workers' compensation covers sudden and accidental and on-the-job claims. 1:52:14 PM MIKE DAVIDSON, Professional Firefighters Association, said he is a firefighter and paramedic in the Municipality of Anchorage. He was testifying on the municipalities' behalf today. He wanted to correct some erroneous statements that have been made. The first was that this bill requires medical screening, but it simply says if your city doesn't do medical screening prior to employment, you don't qualify for the presumption. No one in that city would qualify. However, he encouraged those municipalities to start doing medical screenings anyhow for things like hepatitis, tuberculosis and AIDS, because those employees are frequently interacting with the public, often in medical settings, and he felt the public had a right to ensure that those employees were disease-free. MR. DAVIDSON said he has also heard that the employees can acquire these illnesses through the course of their work, but here are ways to avoid exposures prior to engaging in those activities. In his line of work, despite the best efforts, the largest exposure to disease still occurs through their skin system. He elaborated that he can't wear a plastic suit around his body when he goes into a fire, because the temperature is somewhere between the temperature of your oven and 2000 F. Every time he is in those atmospheres, he is exposed to known carcinogens at a rate much higher than the general public. Some testimony said that other people can acquire these diseases and that is true, but many of them do not acquire them at rates like 319 percent greater than the average populace for bladder cancer, 270 percent greater than a healthy populace of workers for leukemia, and 227 percent greater than a healthy populace of workers for non-Hodgkin's lymphoma. He concluded: It's clear from those rates that certainly there must be some connection and the connection in that case would be that all those people acquiring those much greater rates were firefighters versus people who were not. MR. DAVIDSON said he understood employers' concerns that this could cause an increase in their insurance rates; he also understood them to say they want the firefighters and their families to bear these costs. He agreed that, as Mayor Combs said, there would be no way for the employer to defend himself, but there would be no way for him under the current system to defend himself particularly given the resources that would be limited essentially to his family. As the head of his family, he has a limited lifespan and his choice is to either spend it with his family versus fighting the red tape of the system. He supplied the committee with examples of claim numbers from other communities as follows: according to Joseph Martin, Deputy Director of the Public Employee Retirement Agency in Massachusetts, when cancer provisions were enacted in their retirements, over a four-year period, the state had 15 disability claims and 19 death benefit claims. Massachusetts had 14,500 career and 11,000 volunteer firefighters for an average claim rate of .03 percent. Dave Dubois with the California Department of Contract Services stated that when California passed similar legislation, it had 63,000 firefighters with an average claim rate of .07 percent. Bob Hollander, Executive Director, Oklahoma Firefighters Pension Retirement System, said Oklahoma has 12,420 firefighters with an average claim rate of .03 percent. These all result in an average predicted claim rate of .034 percent. Alaska has approximately 1,000 career and volunteer firefighters, many of whom, because they don't have health screening or don't have ten years of service, would not qualify for any of this coverage. But if all those qualified for this coverage, the average predicted claim rate would be less than one firefighter per year and approximately one firefighter every three years. The cost per claim would be much more difficult to determine and he couldn't come up with figures that he felt were accurate at this time. 1:58:54 PM MARK ERENST, City Manager, Whittier, shared Mayor Combs' concerns with increasing the cost of workers' compensation insurance, which is the biggest component of his budget. His city has had large tax increases just to maintain the status quo for providing local services. For instance in the last year, moorage fees went up 50 percent, water and sewer rates went up 65 percent and an ordinance would go before the voters in the next election asking to increase property tax by 140 percent - all just to deal with the status quo. MR. ERENST said that the presumption in HB 31 goes too far and that health insurance was the proper avenue for dealing with non-work related injuries. 2:01:16 PM CHAIR BUNDE asked him to estimate how much his workers' compensation premium would increase with passage of this bill. MR. ERENST replied that he would get those figures for him. He said Whittier is one of the smallest municipalities in the state that has a property tax and any serious claim would have a tremendous impact on it. 2:02:26 PM CHAIR BUNDE asked if its health plan included a long-term disability option. MR. ERENST replied yes. It has the same program as the State of Alaska - at no cost to the employee. 2:02:49 PM TERRY MCFARLANE, Risk Manager, North Star Borough, was concerned about the increased cost of workers' compensation premium if this passes. She said the North Star Borough has four volunteer/paid combination fire departments. Last year it paid about $180,000 for workers' compensation premium and was given an estimate that this measure could raise rates as much as 20 percent per year. 2:03:47 PM MARK DRYGAS, Battalion Chief with the Fairbanks Fire Department, said he is also president of the statewide Alaska Professional Firefights Association. He pointed out that the presumption that already exists in 38 other states is only in a small number of cases and they are very serious illnesses and after a long time of employment. He related a story about Skip Causey, who rose through the ranks and became a battalion chief at the Fairbanks Fire Department and who developed non-Hodgkin's lymphoma. He was one of the healthiest individuals he had ever known. There was no doubt that his disease came from firefighting; its rate is four times greater in firefighters than the general public. He died after a year and a half battle with the disease. He came under the city health care that was self-funded and it raised the average rate per employee greatly. While he was alive, the city tried to provide some light duty employment for him and firefighters contributed leave to him. But still, there is a big difference between being on health care and being on workers' compensation, because he had no disability, no death benefit. For months he would be outside in hospitals. There was no coverage for his family for loss of wages. It had a huge impact on him and his primary concern was taking care of himself, his three boys, and like Mike Davidson said, there is no time in here to put on a legal battle as to whether it happened on the job or didn't. Certainly, this is the only case that I am aware of that would be under this presumption. But this would have made a tremendous difference to Skip Causey and his family. This bill is important; it's important for firefighters. What we do is a dangerous job.... MR. DRYGAS said safeguards for employers were built into the bill. Cancer coverage required 10 years of employment. He said the bill is focused on specific diseases that have a much higher rate amongst firefighters and couldn't be abused. 2:08:38 PM CHAIR BUNDE summarized that the difference wasn't in the health care, but the wages and disability benefits. MR. DRYGAS responded that workers' compensation includes rehabilitation provisions, but one of the primary differences is that is covers income from loss of work. 2:09:16 PM LARRY SEMMENS, Finance Director, City of Kenai, opposed HB 31. As with other municipalities, it would impose increased costs. It primarily would affect municipalities, not state agencies. He said: Municipalities are already struggling with rising insurance costs, notably workers' compensation, as well as health care costs and PERS costs. From my perspective, municipalities need help from the state, not further increased costs. He said a presumption ignores other possibilities as to how those diseases were contracted. Why wouldn't lifestyle of the employee be considered, for instance? He had the unfortunate experience of dealing with a death on-the-job workers' compensation claim and he did not want anyone to be unfairly treated for an on-the-job accident. But they cost $1 million to $2 million. That has a big impact on workers' compensation rates. That is why he opposed to this bill. CHAIR BUNDE asked if he had an estimate of what the impact would be on his workers' compensation rate would if this bill became law. MR. DRYGAS replied he did not. 2:11:48 PM KEVIN SMITH, Executive Director, Alaska Municipal League's Joint Insurance Association (AMLJIA), said the association is a not-for-profit self-insurance mechanism for schools, cities and boroughs in Alaska. He said he also serves on the Medical Services Review Committee, a committee that was reconstituted in SB 130 last year to advise the Department of Labor and the Alaska Workers' Compensation Board on the appropriateness, necessity and costliness of medical care and related services. He said that the increasing costs of medical care continue to hobble progress. While the Alaska workers' compensation system continues to need reform, he opposed HB 31. It does nothing to improve the situation. HB 31 really focuses on a single class of employees - municipalities and local governments. The National Counsel on Compensation Insurance has set the manual base rates that are used across the country and estimate the cost would increase by 10 to 20 percent. That estimate excludes section 2 of the bill that is retroactive. Public safety and rescue personnel represent one-third of Anchorage's employees and a large part of the overall workforce for local government. Raising the workers' compensation rates by another 20 percent for a third of your workforce is a bitter pill to swallow - no matter what community you are in - particularly in light of other challenges faced by municipalities as Mr. Semmens pointed out - PERS, TRS, tax caps, cost of fuel, senior citizens tax exemptions and the like. The situation is further complicated by the retroactive aspect of the bill. Section 2 applies to the presumption of coverage to claims made on or after the effective date even if the exposure leading to the occupational disease occurred before the effective date of this act. He said that life-long liability for former employees was never really contemplated in the development of these rates. It represents an unfunded liability. Coverage for legitimate workers' compensation claims already exists for this class of workers. The statistical relevance of the incident rates of these diseases is inconclusive in many instances. Providing a blanket presumption for communicable diseases like AIDS, HIV, TB, meningitis and hepatitis is also a real stretch. In fact, when the public safety personnel follow departmental procedures, the incidence rate should be lower than the general population. Cancer presumptions are offered only if the employee has been shown to be clear of cancer by a qualifying medical exam, which is a good idea. While municipalities may not be required to give the medical exam, I would think employees would insist on having a medical exam in order to take advantage of the presumption. In the past, I had misunderstood that EMTs might also be included in the medical screening. If it's only firefighters, I would say that we have roughly 5,600 volunteer and professional paid firefighters in the state of Alaska. We tried to pencil this out last year in terms of how much would cost per medical screening. The rates vary from $750 to $1,500 depending on the age of the applicant. If we say 5,600 times $900, which I think is probably a low estimate on medical screening, you're looking at somewhere upwards north of $5 million for the medical screening in the first year. The cancer presumptions are offered if you have this qualifying medical exam, but if you go to the doctor today - if any of us go to the doctor today - there is no guarantee that we won't come out clean and when we come out clean, there is no guarantee we're not going to have cancer. In fact, the American Cancer Society says there is a little less than one out of two chance for men to contract or die of cancer in their lifetime - for women, the statistic is more than one in three. This is across all categories in all occupations. As I said, these claims are already covered by the workers' compensation system when they are clearly work-related, but many of the illnesses contemplated here have at their core a genetic or lifestyle component. If a firefighter has a heart attack while lugging a hose or carrying a pump, these claims are covered, but if a firefighter has a heart attack three days after the response to a fire, I think it's a stretch to presume the heart condition is job-related, particularly in light of America's demographics where we're all getting older and we're in general getting heavier. If they are not covered by the comp system, they will generally be covered by the employer- provided health care system. The International Association of Firefighters Union also makes available a catastrophic health plan. Therefore, if passed, this bill would assure that the cost shifts from the employer-provided or union- provided health care system to the less-efficient and more expensive workers' compensation system. 2:18:57 PM You have heard that 38 other states have similar legislation. To be more accurate, that number includes states where these presumptions are included in pension and retirement plans. Up until recently, the Anchorage police and firefighter pension plan included an occupational disability for a heart lung presumption. As best as I can determine, the real number of states whose workers' compensation presumption - it's a workers' comp presumption - is closer to nine. I think I speak for all the municipalities in Alaska when I say municipalities appreciate our firefighters, our EMTs, our policemen. However, the coverage is already in place for legitimate claims. The cost of complying with presumption in this bill without providing the accompanying funding must not be ignored. It's for these reasons that we oppose HB 31. 2:19:45 PM SENATOR BEN STEVENS asked if this subject was discussed in the Medical Services Review Committee for workers' compensation. MR. SMITH replied no. SENATOR BEN STEVENS asked if the statistic that one in two men die from cancer referred to men in general or just firefighters. MR. SMITH replied that statistic was from the American Cancer Society's website. It referred to men across all occupations. Cancer and heart disease are problems for all Americans, not just firefighters. SENATOR BEN STEVENS asked him to explain what he meant by death and disability coverage is available now for presumption causes in the retirement and pension plans of 38 states versus the nine states. MR. SMITH explained that Mr. Drygas testified that 38 states had passed legislation similar to HB 31, but as best as he could determine, those 38 states are inclusive of retirement and pension plans, not a peer workers' compensation presumption - the type of workers' compensation that was considered in just nine other states. SENATOR BEN STEVENS asked if there could be an option in a retirement plan to buy additional coverage for getting cancer later in life. MR. SMITH replied that it's not so much an option as a negotiated item in the pensions themselves. For example, the Anchorage firefighter and police pension plan has a heart lung disability. Then they moved to the PERS system and he didn't know if that same disability existed under that system. He mentioned that he could almost guarantee that any new hires under Tier 4 would not be offered a pension that included that occupational disability. 2:23:16 PM PAUL LISANKIE, Director, Division of Workers' Compensation, Department of Labor and Workforce Development (DOLWD), said he wasn't sure if long-term disability was available. He knew there were non-occupational disability provisions as well as occupational. He said he wanted them to base this serious policy decision on a clear understanding of what exists and how it would change. He said it is not absolutely correct to say that workers' compensation is only aimed at traumatic injuries. Since 1959, our definition of injury under the Workers' Compensation Act has included occupational diseases. The way I would characterize it, Mr. Chairman and members of the committee, is that this would kind of stand on its head how an occupational disease is proven and who has to prove it. Currently, if someone wants to make a claim that they have an occupational disease, they have to carry the burden of proof to persuade someone that the disease was caused by the conditions of their employment and that those employment conditions carry with them a greater risk of incurring that disease than those that prevail in employment and living conditions generally. As you might expect, that can be a very difficult burden to carry. It takes some evidence and when you deal with some of these diseases that we're talking about, I'm not sure that science really understands what causes them definitively anyway. What the bill would do is, in essence, take four major groups of diseases and say, as a matter of law, for the two groups that are impacted by this bill, these diseases are occupational diseases. So, it would remove the burden of making that association. It would be made by matter of law to their employment conditions. And then it would require that to defeat such a claim for benefits, that the self insured employer or the insurer, as the case may be, would have to come forward with a preponderance of the evidence - essentially to prove to someone that it's more likely than not - not withstanding the presumption that it's not caused by the work. I think it's unfair to characterize the bill as saying that the self-insured employers or insurers have no capability of defeating the claim. I might personally, based on my experience, say that it's going to be difficult, but I don't think that it's fair to say that it's impossible, because the sponsor has made sure to put in the bill that the presumption may be rebutted by a preponderance of the evidence and that evidence could include personal use of tobacco products, physical fitness, weight, lifestyle, hereditary factors and the other things that you have heard from the some of the testimony that are associated with some of these diseases. So, while I'm not trying to minimize how difficult it might be to rebut such a presumption, the sponsor has given them an opportunity to address it. 2:27:49 PM There has also been some testimony about the, I guess I would call it, the four groups of conditions that the bill envisions becoming occupational diseases and what you have to do to bring yourself under that presumption. I would like to clarify a few points. The four groups of conditions are - respiratory disease is one, certain cardio vascular events within a 72-hour period is the second, certain cancers is the third and certain infectious diseases is the fourth. Only one of them, the certain cancer one is the one that requires that you have X-number of years of - I believe it's 10 years of experience - on the job and some type of a baseline physical to establish - I presume in the absence of that condition. The other, as I read the bill, the others do not have either a requirement for a baseline examination of any sort or a requirement that it only happen after so many years. That, in my experience, is a little bit different than some of the states that I was looking at when I did try and educate myself on this.... I would also like to clarify one thing that's come up in some of the testimony. As I read the bill under that list of certain cancers that would become occupational diseases, lung cancer is not on that list. So, while I don't want to say the entirety of the testimony about the concerns about cancer is erroneous, it just so happens that lung cancer, as I read the bill, is like one cancer that is not actually subject to the presumption you are being asked to put in law. The two groups that are affected are obviously firefighters. They get the presumption for all four of these disease groups and then there is a final group, peace officers, emergency, medical and rescue personnel - and they are only on line to get a presumption for those infectious diseases. I tried to find if there were definitions somewhere of firefighters, peace officers and emergency medical and rescue personnel. The last one has been included in the bill. There is a definition. Peace officers - I found two definitions in Alaska statutes. One is in Title 01, which applies to all legislations. So, I think there is certainly a valid definition of peace officer. Firefighters - I did not actually find a definition that's broadly applicable although there is a definition in Title 9 that has to do with certain liability cases. And that is a fairly broad definition, but is basically if you are employed by a fire department or a volunteer fire department. 2:31:17 PM Finally, there have been some questions about the scope of the examinations. As I read the bill, Mr. Chairman, the Department of Labor, if this bill becomes law, will be required to make up a determination and publish it, I guess, in a regulation about what type of examination will be a qualifying examination. That will be, I think, kind of an interesting question as it's explored.... On the one hand, the more - I guess what I'm trying to say is I'm not sure how you rule out the existence of certain cancers, but I imagine it could be pretty expensive. For example, brain cancer might be a CAT scan. I mean, that would be pretty expensive. On the other hand, if we make a very broad watered-down thing and say if you had your basic physical, that it was sufficient; then I could see municipalities having a concern there and saying you haven't really ruled out the existence of kidney cancer if you've had a basic physical. So, that will be kind of a conundrum for us. 2:32:20 PM The other thing is that there is a provision that says.... the nature and quantity of a person's tobacco product use needs to be defined, again, by the Department of Labor. And certain personal use of tobacco would cause that person to lose the presumption for respiratory diseases and cardio vascular events. MR. LISANKIE said that Washington State has similar language and they have published a grid that says if you have asthma, for instance, you cannot be currently a smoker and you must have been off of cigarettes for at least two years. For the more serious conditions, it says you can't be a smoker and you must have quit at least 15 years ago. 2:33:50 PM CHAIR BUNDE asked him to guess what the financial impact would be on rates. MR. LISANKIE replied that Director Hall usually carries the rate questions. 2:34:35 PM SENATOR BEN STEVENS questioned whether qualification for the 10- year exemption on page 2, line 17, applied to cancer only. MR. LISANKIE replied that was his understanding. SENATOR BEN STEVENS said it also states that the individual has to have a medical exam either prior to or during employment. MR. LISANKIE replied yes, that was his reading of the bill. SENATOR BEN STEVENS asked if an individual had an exam and found he had heart disease or a respiratory disease under (a) and (b), would he still be under the presumption - even if he hadn't worked for the employer for 10 years. MR. LISANKIE replied that was his understanding of the bill. REPRESENTATIVE ANDERSON said he would entertain an amendment adding 1(a) and 1(b) to page 2, line 17 so that a presumption wouldn't be applied. He also said he wouldn't oppose deleting peace officers from the bill on page 2, line 28. He would, however, add peace officers to page 3, lines 4 through 8. He intended to target firefighters. 2:38:35 PM SENATOR SEEKINS arrived. CHAIR BUNDE asked if he was suggesting the 10-year employment apply to all presumption for all diseases. REPRESENTATIVE ANDERSON replied that he would like to confer with Mike Davidson on that. CHAIR BUNDE said he would like to set HB 31 aside for work on amendments. CSSSHB 31(FIN)-WORKERS' COMP: DISEASE PRESUMPTION CHAIR CON BUNDE announced CSSSHB 31(FIN) to be back up for consideration. He moved to adopt conceptual Amendment 1 and objected for discussion purposes. CONCEPTUAL AMENDMENT 1 To CSSSHB 31(FIN) Page 2, line 17: Replace "(1)(C)" with "(1)(A)-(C)" Page 2, line 28 Delete "Peace Officers" Page 3, line 11 (conceptual) Insert "(e) The provisions of (c)(1)-(5) apply to fire fighters covered under AS 23.30243, peace officers and emergency medical rescue personnel;" Renumber the remaining sections appropriately Page 3, line 13 (conceptual) Insert "(1) for purposes of (b)(1)-(5) of this section..." HEATH HILYARD, staff to Representative Anderson, sponsor of HB 31, said the amendment was consistent with the sponsor's suggestion. On page 2, line 17, there was some concern that the presumption and the 10-year employment requirement applied only to the cancers listed in (b)(1)(c) through (7), so that presumption was applied to all of the diseases listed on page 2, lines 2 through 12. On page 2, line 28, peace officers were removed from the presumption for diseases found on page 2. So now that section applies to only firefighters and emergency medical personnel. The two conceptual pieces say that the presumption applies to peace officers for the infectious diseases found on page 3, lines 4 through 8. That is primarily because those diseases can be acquired on a single exposure at any given time, whereas the cancers and cardio vascular disease are generally after repeated exposure. Lastly, language on page 3, line 13, was amended to say there must be a pre-employment medical examination to screen for all of the medical conditions included in the bill rather than only those on page 2. This was suggested by the firefighters. 3:31:16 PM at ease 3:31:33 PM CHAIR BUNDE noted that Senator Ben Stevens had stepped out. SENATOR SEEKINS asked how infectious diseases that are acquired through reckless behavior (like HIV), not as a result of their employment, were addressed on page 3. MR. HILYARD replied that clearly a pre-employment medical exam would indicate that a person has not been infected with any of those prior to employment. However, verifying the source once a person is employed would be difficult. SENATOR SEEKINS asked if someone who didn't have contact as part of their job, but did have contact because of their own sexual activity, would still get the presumption. MR. HILYARD replied yes; that was his understanding. The bill did not have a specific provision that would exempt the exposure. 3:33:37 PM at ease 3:33:50 PM CHAIR BUNDE announced that he would hold HB 31 and adjourned the meeting at 3:34:09 PM.
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