SENATE BILL NO. 159 "An Act increasing the maximum funeral expenses payable as a workers' compensation death benefit; and providing for an effective date." 10:00:51 AM SENATOR JOE PASKVAN presented the legislation and the merits of SB 159. He gave a statement including history about the workers' compensation death benefit. He discussed the cost of funeral expenses. The payment of the death benefit is granted to the survivors. The act increases the maximum funeral expense payable as a workers' compensation death benefit and provides for an effective date. The bill addresses Section 1 of the statute stating that reasonable and necessary funeral expenses are increased from $5000 to a more appropriate level of $10,000. During the last ten years there have been an average of 26 fatalities per year in Alaska that require payment of funeral expenses under the workers' compensation statutes. In that decade, the most number of deaths in a year was 39 and the fewest number of deaths was 15. Last year there were 17 fatalities in Alaska that required the payment of workers' compensation funeral expenses. He mentioned the wide range of necessary services involved in a funeral. These funeral services easily surpass the maximum death benefit. If SB 159 is implemented, there is no fiscal impact to the state. System costs will increase by less than 0.1 percent. Current funeral benefit has been unchanged for a decade, and since then the cost of funeral expenses has risen significantly. 10:03:58 AM Co-Chair Stedman asked for an approximation of funeral costs. Senator Paskvan responded that funeral expenses are estimated at $12 to $15 thousand. The $10 thousand benefit is designed to compensate for reasonable and moderate funeral services. Co-Chair Stedman noted the zero fiscal note from the Department of Labor and Workforce Development. 10:05:37 AM TRENA HEIKES, DIRECTOR, DIVISION OF WORKERS' COMPENSATION, DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT stated that the department does not have a position on the bill. She researched the average funeral cost excluding burial and cemetery charges and the cost is between $6 and $7 thousand for the casket and the funeral home cost. Co-Chair Stedman requested various amounts of funeral expenses comparing cremation versus burial. Senator Huggins asked if insurance is available to workers in the state. He asked about insurance offered by unions or recurring employers. Ms. Heikes responded that for work related deaths, workers' compensation would pay up to $5000. She supposed that private insurance and unions might also contribute if a person participated in them. Senator Huggins asked if the payment is doubled from $5 to $10 thousand, who pays for the additional amount. 10:09:40 AM Ms. Heikes answered that the workers' compensation insurance carrier who contracts with the employer to provide workers' compensation insurance. The overall increase in premium is 0.1 percent. She clarified that if an employer paid $1000 premium per year, the cost would be an additional dollar for the increase from $5 to $10 thousand. Senator Thomas asked if private benefits would compromise the ability to collect workers' compensation benefits. Ms. Heikes answered that if the person has private insurance for funerals, then the first $5000 would be covered by workers' compensation. 10:11:25 AM DON ETHERIDGE, ALASKA, AFL, CIO spoke in support of the legislation. He acknowledged that funeral costs have increased dramatically. Typically when a person is lost on the job, the income is lost for the family. He opined that the increase is appropriate. Senator Huggins asked about the percentage increase for the employees. Mr. Etheridge responded that he was not aware of the percentage increase for individuals. Senator Huggins thought that the information was important to determine exactly how the legislation would impact those involved. 10:13:29 AM BARBARA HUFF TUCKNESS, DIRECTOR OF LEGISLATIVE and GOVERNMENTAL AFFAIRS, GENERAL TEAMSTERS LOCAL 959, spoke in support of the legislation. She noted the safety perspective and the history of members lost though work related efforts. She noted that the impact and focus on safety issues is greater. She added that despite the choice of casket versus burial, the act of transporting the body adds additional expense. 10:16:10 AM Co-Chair Stedman pointed out questions regarding data retrieval about the number of deaths that occurred in the workplace. He requested data about the cost of funerals and additional expenses. He expressed curiosity about the employees in union and out of union. KEVIN DOUGHERTY, ALASKA LABORERS, EAGLE RIVER (via teleconference) spoke in favor of the legislation. He pointed out that the amount of work related deaths has declined. He opined that the legislation is of benefit to workers and also saves insurance funding for workers' compensation. He stated that he sent price data to the committee from various funeral homes around Alaska. The data shows that a typical funeral has escalated from $6 to $10 thousand. The bill would allow the workers' compensation insurance to cover up to $10 thousand, but a funeral charge that is less would only receive the amount necessary. He noted that the benefit has not increased for approximately 10 years, yet the cost of funerals has increased considerably. STACY ALLEN, LOBORERS LOCAL 341, ANCHORAGE (via teleconference) relayed a recent experience where a union member was lost and she was privy to the financial worries that greatly affect families and compound the tragedy. She noted that collections and resources were received from other union members, but she could not imagine the absence of the union family. 10:21:27 AM Senator Thomas asked about the fatalities listed in the documentation provided by the Department of Labor and Workforce Development, "Total Filings by Type" (Copy on File). He was uncertain about the fatality numbers listed in the lower section of the table beginning with number 224 in FY99 running to FY08. Ms. Heikes responded that the upper portion of the data sheet indicates the actual numbers of injuries reported in the division. The lower portion represents the number of files open by insurers. She noted that ongoing death benefits were payable to the survivors under the statute. The insurance carriers would have open files because they continue to pay benefits. The numbers cited by Senator Thomas indicate the ongoing files through which benefits are paid. The questions address the issue of whether or not the workers' compensation act had jurisdiction over the reported injuries. SB 159 was HEARD and HELD in Committee for further consideration. 10:29:10 AM Co-Chair Stedman provided an overview of the upcoming committee meetings.