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.]