SB 130-WORKERS' COMPENSATION    CHAIR CON BUNDE announced SB 130 to be up for consideration. MIKE JENSON, attorney, said he exclusively represents injured workers with workers' compensation cases. He said his colleagues had faxed the committee with their concerns today. MR. JENSON said he has heard a lot of testimony about premium increases, but he hasn't ever heard an explanation that accounts for the increases. When you look at the annual reports that the commissioner and the Governor are relying upon, they show, in fact, that time-loss claims have decreased. Injuries have decreased over 5 percent in the last annual report. Employee legal expenses have decreased over 10 percent. Incidentally, we've enjoyed the greatest decrease in expense for the workers' comp system. Our colleagues on the insurance side, on the other hand, have seen an increase in legal expenses and, in fact, received approximately three times as much in legal expense reimbursements as employees do. In addition, the annual report shows reemployment benefits have decreased medical costs. They have shown an increase, but that's only 8 percent and total benefits are only up 7 percent. So, it's difficult for me as a lay person to understand why employers are facing up to 400 percent premium increases when the total benefits have only gone up 7 percent. I have not heard any discussion or explanation from the Governor's office, the commissioner or the director, which addresses that concern. In addition to representing injured workers, I'm also an employer and I also have to face increased premiums, but as an employer, I would like to know that if we are to reform the compensation system, that my premiums are, in fact, reduced. If total benefits are only up 7 percent, it's difficult for me to comprehend how reforming a workers' compensation system will address the problems that other employers are facing with as much as 400 percent increases. He wanted to address the creation of a commission in section 10 that creates a court without calling it a court and creates judges without calling them judges. Judges will be mere political appointees, not subject to the standards of judicial conduct. Preemption would not be allowed; the commission would not be subject to the present standards of judicial review. It will decide cases de novo and the judges will never be evaluated for their ability or fairness. Section 29, which is part of this creation of the commission, takes away current power of the board to determine the credibility of medical reports. A board finding concerning the weight to be accorded witness testimony including medical testimony will no longer be conclusive. The board's determination of credibility will be exclusively limited to testimony presented by a witness at a hearing. This will increase, not decrease, the cost of litigation to employers and employees alike, since medical reports will no longer have the weight currently accorded by the present act. The board will lose, in fact, its power to determine credibility of medical reports or other evidence not presented by a witness at hearing. In addition, it makes clear the commission, since it will review de novo all prior board decisions, it makes clear that instead of resolving a case with one hearing, now all cases will require two hearings. How this will decrease litigation costs that employers are facing is difficult for me to comprehend. It permits parties to present new or additional evidence at this second hearing. It permits an easier granting of stays without requiring any bonds - increasing the likelihood of having two hearings. It makes certain that all adverse board decisions will be appealed by the party who lost at the board level. All of this will greatly increase litigation costs. Every party who loses at the board will be compelled to appeal for a chance at two bites of the apple. Me, as an employer, would be certainly troubled by hearing a case that went to a hearing in which I prevailed. I would only have to face another hearing where I would have to defend, face additional and new evidence. This does not benefit employers and it certainly doesn't benefit injured workers. It creates another hurdle that both employers and employees have to jump through. It certainly doesn't address, in light of the annual report statistics, the increased premiums that employers here in Alaska face. 3:17:06 PM MARK KLINE, representing himself, said reduced fees in section 25 might reduce the quality of health care already available through existing law. Studies done during the Clinton administration found that regulation of health care to control costs decreased the quality of it. He also thought the majority of cost problems employers are having is because of the lack of appropriate pursuit of safety that in turn causes a significant quantity of injuries and illnesses. The national estimate rate is five injuries per hundred employees, but Alaska's is seven injuries per hundred employees. That makes it 40 percent higher than the national average according to the Bureau of Labor statistics. This higher incidence could likely cause increased prices in insurance premiums. He favored increased involvement by OSHA, employers and employees who should have meetings pertaining to safety issues. This would keep injuries and insurance premiums down. 3:21:10 PM Section 16 reduces the amount of permanent impairment capital an employee is entitled to, which might encourage employers who have little or no interest in safety to reduce their efforts even further in preservation of the working environment. They could afford to take more chances because of a lesser amount of penalty they would be subjected to. CHAIR BUNDE thanked him for his testimony. 3:21:53 PM LANCE BUSH said he works at Fred Meyer in Anchorage and agreed with Mr. Kline. A garage door came down and hit him on the shoulder and broke his foot in six places. His wife, six children and he are going through a living hell. Loopholes in the law are being used against him. He thinks the Legislature is increasing corporate protection in Alaska. He sees Alaskans with injuries that require minimal medical attention and said: But seriously injured Alaskans are swept under corporate America's rug, left to be ignored in litigation because the liability is too costly and they don't want to take accountability.... Now I feel me and my family's American dream is altered and we've begun to live the workman's comp nightmare. I would like to know when we are going to hold corporate Alaska, corporate America, accountable for illegal practices, bullying, intimidation and outright lies - to us as truly proven cases of injured Alaskans.... CHAIR BUNDE thanked everyone for their testimony and said the committee ran out of time and adjourned the meeting at 3:27:24 PM.