ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 8, 2015
4:16 p.m.
MEMBERS PRESENT
Representative Kurt Olson, Chair
Representative Shelley Hughes, Vice Chair
Representative Jim Colver
Representative Gabrielle LeDoux
Representative Cathy Tilton
Representative Andy Josephson
Representative Sam Kito
MEMBERS ABSENT
Representative Mike Chenault (alternate)
COMMITTEE CALENDAR
CONFIRMATION HEARING(S):
Board of Massage Therapists
David Edwards-Smith - Soldotna
Ron Gibbs - Akhiok
Traci Gilmour - Juneau
Shirley Nelson - Anchorage
Amanda Unser- Anchorage
- CONFIRMATION(S) ADVANCED
Board of Examiners in Optometry
Dr. Stephen Stralka - Anchorage
- CONFIRMATION(S) ADVANCED
Board of Certified Real Estate Appraisers
Renee Piszczek - Fairbanks
- CONFIRMATION(S) ADVANCED
Alaska Workers' Compensation Board
Lake Williams - Fairbanks
- CONFIRMATION(S) ADVANCED
HOUSE BILL NO. 178
"An Act relating to workers' compensation fees for medical
treatment and services; providing for an effective date by
amending the effective date of sec. 5, ch. 63, SLA 2014; and
providing for an effective date."
- MOVED HB 178 OUT OF COMMITTEE
HOUSE BILL NO. 66
"An Act relating to providing medical insurance coverage under
the Teachers' Retirement System of Alaska and the Public
Employees' Retirement System of Alaska; and providing for an
effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 178
SHORT TITLE: WORKERS' COMP MEDICAL FEES; DELAY
SPONSOR(s): LABOR & COMMERCE
04/01/15 (H) READ THE FIRST TIME - REFERRALS
04/01/15 (H) L&C
04/08/15 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 66
SHORT TITLE: INS. FOR DEPENDENTS OF DECEASED TEACHERS
SPONSOR(s): MILLETT
01/21/15 (H) READ THE FIRST TIME - REFERRALS
01/21/15 (H) L&C, FIN
04/08/15 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
KONRAD JACKSON, Staff
Representative Kurt Olson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of the House Labor and
Commerce Standing Committee, Kurt Olson, Chair, on the
appointees to the various boards and commissions as well as
HB 178.
MICHAEL MONAGLE, Director
Central Office
Division of Workers' Compensation
Department of Labor & Workforce Development (DLWD)
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions during the
discussion of HB 178.
REPRESENTATIVE CHARISSE MILLETT
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as prime sponsor of HB 66.
GRACE ABBOTT, Staff
Representative Charisse Millett
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: On behalf of the prime sponsor,
Representative Charisse Millett, testified and answered
questions on HB 66.
JAKE METCALFE, Executive Director
Public Safety Employees Association, Inc. (PSEA)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 66.
JEFF BRINK, Officer
Juneau Police Department (JPD)
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 66.
ACTION NARRATIVE
4:16:46 PM
CHAIR KURT OLSON called the House Labor and Commerce Standing
Committee meeting to order at 4:16 p.m. Representatives Hughes,
Colver, Kito, Olson were present at the call to order.
Representatives LeDoux and Tilton arrived as the meeting was in
progress.
^CONFIRMATION HEARING(S)
CONFIRMATION HEARING(S)
Board of Massage Therapists
Board of Examiners in Optometry
Board of Certified Real Estate Appraisers
Alaska Workers' Compensation Board
4:17:13 PM
CHAIR OLSON announced that the first order of business would be
the confirmation hearings of various boards and commissions.
4:17:36 PM
KONRAD JACKSON, Staff, Representative Kurt Olson, Alaska State
Legislature, on behalf of the House Labor & Commerce Committee,
stated that some of the appointees for four boards were not
taken up during the April 1, 2015 hearing. He indicated that
committee members have had an opportunity to review the
qualifications and resumes for the appointees, but [no committee
members] expressed concern with the appointees' qualifications
or requested anyone appear at today's hearing.
MR. JACKSON read into the record the names of the appointees [as
listed in the Committee Calendar] to the Board of Massage
Therapists, Board of Examiners in Optometry, Board of Certified
Real Estate Appraisers, and Alaska Workers' Compensation Board.
4:19:21 PM
REPRESENTATIVE HUGHES moved to advance the confirmations of the
appointees for the four aforementioned boards and commissions
referred to the House Labor and Commerce Standing Committee to a
joint session of the House and Senate for consideration. There
being no objection, the confirmations were advanced.
REPRESENTATIVE HUGHES reminded members that signing the reports
regarding appointments to boards and commissions in no way
reflects individual members' approval or disapproval of the
appointees, and that the nominations are merely forwarded to the
full legislature for confirmation or rejection.
4:19:41 PM
The committee took an at-ease from 4:19 p.m. to 4:21 p.m.
HB 178-WORKERS' COMP MEDICAL FEES; DELAY
4:21:22 PM
CHAIR OLSON announced that the first order of business would be
HOUSE BILL NO. 178, "An Act relating to workers' compensation
fees for medical treatment and services; providing for an
effective date by amending the effective date of sec. 5, ch. 63,
SLA 2014; and providing for an effective date."
CHAIR OLSON reported that the initial bill last legislature,
House Bill 316, passed the Twenty-Eighth Alaska State
Legislature unanimously, except for those absent.
4:21:52 PM
KONRAD JACKSON, Staff, Representative Kurt Olson, Alaska State
Legislature, stated that HB 178 would offer a five-month
extension to the time constraints set by House Bill 316 [Twenty-
eighth legislature] for the creation of a new Workers'
Compensation Medical Services Review Committee (MSRC) tasked
with establishing a conversion factor and geographic
differential to be used in conjunction with a basic fee schedule
and a relative value unit methodology and implemented by
regulation. He said this bill could be likened to a simple
board extension with a zero fiscal note. Last year the
legislature passed House Bill 316, which asked the Medical
Services Review Committee (MSRC) to create a fee schedule based
on Medicaid rates with a multiplier for various services. Once
a conversion factor was set, the bill required the commissioner
of Department of Labor & Workforce Development approve the
multiplier and draft regulations, which the workers'
compensation board would implement. The bill envisioned this
work would be completed by July 1, 2015. The Medical Services
Review Committee (MSRC) has met numerous times and is very close
to completing its work, but does not anticipate completing its
work by July 1, 2015.
4:23:08 PM
CHAIR OLSON asked for the current Medical Services Review
Committee (MSRC) membership.
MR. JACKSON replied that the Medical Services Review Committee
(MSRC) consists of nine members, as follows: (1) one member who
is a member of the Alaska State Medical Association; (2) one
member who is a member of the Alaska Chiropractic Society; (3)
one member who is a member of the Alaska State Hospital and
Nursing Home Association; (4) one member who is a health care
provider, as defined in AS 09.55.560; (5) four public members
who are not within the definition of "health care provider" in
AS 09.55.560; and (6) one member who is the designee of the
commissioner and who shall serve as chair. He stated that all
of the stakeholders have a seat at the table in the discussion
to set the conversion factors. He reported that the department
requested the extension since the Medical Services Review
Committee (MSRC) was very close to completing its work, but the
July 1, 2015 completion date would not likely allow enough time
to complete the regulatory process. The bill has a zero fiscal
note since the costs were previously addressed in House Bill
316, which passed the legislature last year.
CHAIR OLSON said that he has not attended any of the MSRC
meetings, choosing to leave it to the Department of Labor &
Workforce Development.
4:24:46 PM
MICHAEL MONAGLE, Director, Central Office, Division of Workers'
Compensation, Department of Labor & Workforce Development
(DLWD), provided some background information on the Medical
Services Review Committee (MSRC), which began meeting in July
2014. The committee was established by statute in 2005 and met
for several years, making some recommendations in 2009. The
MSRC somewhat faded from activity so when House Bill 316 passed
last year, the committee was resurrected, including finding new
committee members to develop a request for proposal (RFP) for
subject matter expert contractor, obtain data from several data
sources, including the National Council on Compensation
Insurance and Fair Health, as well as to get approval for
contracts and develop non-disclosure agreements. It took until
November 2014 before the committee started its work. He
described the committee's work thus far, including that the MSRC
has held good discussions, but are still one conversion factor
away from completing its work, with the next meeting scheduled
for April 20, 2015. He anticipated that the last decision will
be made soon. As previously mentioned, the MSRC must provide the
commissioner with a written report, followed by public comment,
and recommendations would then be forwarded to the workers'
compensation board, who would notice a public meeting for 30
days. The Workers' Compensation Board would likely meet in
June, propose regulations and allow 30 days for the public
comment period. The board would adopt the regulations project,
send it to the Department of Law for review and on to the
Lieutenant Governor's office. He anticipated that the
regulations will be in place by the end of summer, which will
allow billers and payers three months to program their systems
with the new conversion factors ready for the new CMS [Centers
for Medicare & Medicaid Services] rates that will be published
on January 1, 2016. He expressed concern that the fee schedule
will not be ready by July 1, 2015, which he described as a
disastrous outcome.
4:28:06 PM
CHAIR OLSON said one member of the Medical Services Review
Committee (MSRC) remarked that he had initially been skeptical
about the committee, but after first meetings he began to enjoy
the process. He told members that he previously had
contemplated that the Medical Services Review Committee (MSRC)
could be on a tight schedule.
CHAIR OLSON, after first determining no one wished to testify,
closed public testimony on HB 178.
4:29:32 PM
REPRESENTATIVE HUGHES moved to report HB 178 out of committee
with individual recommendations and the accompanying fiscal
note. There being no objection, HB 178 was reported from the
House Labor and Commerce Standing Committee.
4:30:00 PM
The committee took an at-ease from 4:30 p.m. to 4:32 p.m.
HB 66-INS. FOR DEPENDENTS OF DECEASED TEACHERS
4:31:58 PM
CHAIR OLSON announced that the final order of business would be
HOUSE BILL NO. 66, "An Act relating to providing medical
insurance coverage under the Teachers' Retirement System of
Alaska and the Public Employees' Retirement System of Alaska;
and providing for an effective date."
CHAIR OLSON stated that this was the first hearing on this bill.
He said the state would conduct an actuarial study to help
develop the fiscal note.
4:32:32 PM
REPRESENTATIVE CHARISSE MILLETT, Alaska State Legislature,
stated that this bill raised an uncomfortable topic, but one the
legislature needed to address. She said that HB 66 seeks to
address a side effect of a state employee dying in the line of
duty. Currently, the state does not provide any health care for
dependents whose parents die in the line of duty. These
families are subsequently faced not only with the loss of a
loved one, but also the termination of their medical coverage.
The state asks its employees in public safety, across all
fields, to provide for health and safety for our communities,
she said, so it is only fair when these employees give the
ultimate sacrifice that the state honors them by supporting
family members who have been left behind. She said that HB 66
would provide spouses and children of state employees who have
been killed in the line of duty with secure, stable health care
coverage in the PERS [Public Employees Retirement System] and
TRS [Teachers' Retirement System] health plans insurance. She
explained that this bill was not a defined benefit bill, but
addresses line of duty death benefits.
4:33:52 PM
REPRESENTATIVE MILLETT paraphrased from the following sponsor
statement, [original punctuation provided]:
The PERS/TRS retiree health plans ensure coverage that
is common to all departments and positions and allows
families to benefit from low deductibles and pharmacy
costs.
Families would be subject to all policies associated
with the plan, and would be able to elect additional
coverage available to plan members.
This approach not only provides a level of comfort for
families, but also provides clarity in the state's
budget. Currently, the Department of Public Safety,
through executive direction, covers the cost of health
care premiums for the families of fallen employees.
REPRESENTATIVE MILLETT added that the department has a line item
in the operating budget that covers the medical coverage for
those families. For families coping with the loss of a loved
one, their last concern should be losing their state medical
coverage. This bill, HB 66, will provide security for families
and clarity for the state when approaching a line of duty death
of a state employee, she said.
REPRESENTATIVE MILLETT explained that this bill was a
collaboration between the Department of Administration (DOA),
the Department of Law (DOL), and the Department of Public Safety
(DPS), and representative are ready to answer committee
questions. She explained that this bill has taken considerable
time to develop. Since the state has been doing this by
proclamation and by executive order, it seemed appropriate to
codify it and add to the state health coverage plan so members
serving in the line of duty will know their families will have
health coverage. She stated that the state has experienced line
of duty deaths in all aspects of the state, including those
killed in a helicopter crash, in fish and game airplane crashes,
as well as public safety officers killed in the line of duty,
which is defined in statute.
4:36:53 PM
GRACE ABBOTT, Staff, Representative Charisse Millett, Alaska
State Legislature, on behalf of the prime sponsor,
Representative Charisse Millett, introduced herself.
4:37:15 PM
REPRESENTATIVE HUGHES moved to adopt the proposed committee
substitute (CS) for HB 66, labeled 29-LS0357\N, Wayne, 3/25/15
as the working document. There being no objection, Version N
was before the committee.
4:37:37 PM
MS. ABBOTT explained that this bill has sections for the
Teachers' Retirement System (TRS) health care benefits and the
Public Employees' Retirement health care benefits so sections
may appear identical, but apply to the specific health care
system.
MS. ABBOTT referred to page 2, lines 1-3, and line 13 of Version
N, which would clarify when major medical benefits are available
to dependent children of deceased teachers under AS 14.25.168
(a). These changes eliminate a requirement for the children to
be dependent on the surviving spouse in order to qualify. This
also protects in the instance of no surviving spouse with only a
surviving dependent.
MS. ABBOTT directed attention to page 2, lines 14-19, to
provisions that clarify under AS 14.25.168(a)(3), that major
medical benefits are available to spouses, independent children
of deceased teachers who are eligible for any type of pension
under AS 14.25.157, not just the monthly survivor pension. She
related her understanding that this change was intended to
prevent the benefit plan administrator from interpreting certain
provisions of AS 14.25.157 to require a cessation of major
medical benefits provided under AS 14.25.168 (a) on the date
when, if the deceased teacher had survived, the deceased teacher
would have qualified for normal retirement, accounting for
different age categories between the spouse and the member who
was killed in the line of duty. The monthly survivor's pension
would therefore terminate, and, without the changed language,
the survivor's eligibility for major medical insurance would
cease.
4:39:54 PM
MS. ABBOTT directed attention to page 2, line 30 through page 3,
line 7[to proposed Sec. 3 AS 14.25.470(a)], would add a new
section eliminating the requirement that an active member of the
defined contribution plan in the TRS has to retire directly from
that plan in order to qualify for medical benefits. This new
bill section further clarifies that a member of a defined
contribution plan is eligible to retire from the plan if the
member has 30 years of service or reaches normal retirement age
and has a minimum of 10 years of service.
MS. ABBOTT referred to page 3, lines 14-17, to changes that
clarify that a deceased member's surviving spouse and dependent
children are eligible to elect medical benefits under AS
14.25.480 if they have received any type of benefit under AS
14.25.487 instead of when they would have been determined to be
eligible for a monthly survivor's pension under AS 14.25.48 -
instead of when they have been determined to be eligible for a
monthly survivor's pension under AS 14.25.487. She related her
understanding that this change is intended to prevent the
benefits administrator from interpreting certain provisions of
AS 14.25.487 on the date when, if the deceased teacher had
survived, the deceased teacher would have qualified for
retirement, and, without the changed language, the survivor's
eligibility for major medical insurance would cease.
MS. ABBOTT referred to page 3, lines 23-24, which requires that
an election by a member of the defined contribution plan in the
teachers' retirement system not to participate in the retiree
medical major medical insurance plan may become irrevocable upon
application for retirement and benefits, instead of upon
application for employment, thus accounting for surviving
spouses and dependents.
4:41:33 PM
MS. ABBOTT directed attention to page 3, lines 26-28, which
would add a new subsection (h) to AS 14.25.470, clarifying that
even if monthly survivor pension benefits under AS 14.25.487(b)
cease, medical insurance under the defined contribution plan of
the teachers' retirement system, for a deceased teacher's
surviving spouse and dependent children will continue to be
paid. She referred to page 3 lines 30 through page 4, line 6,
which would provide cleanup language for AS 14.25.480 (b) to
clarify meaning.
4:42:16 PM
MS. ABBOTT directed attention to page 4, line 24 would eliminate
the language, "A third person who receives major medical
coverage under AS 14.25.470(c) (3) or (4) is not required to
make premium payments for that coverage." This sentence was
made redundant by the bill's addition of a new subsection, AS
14.25.470 (h).
MS. ABBOTT explained that at this point the bill provides
duplicate language for changes that reflect changes to the
teachers' retirement system as well as the Public Employees'
Retirement System (PERS). Thus the next changes will be
mirrored in 1-8 until page 8, lines 25-28, which changes the
bill's new definition of "retiree" in the defined contribution
plan of the Public Employees' Retirement System from "an
eligible person who has elected to receive medical benefits
under AS 39.35.880," to "an eligible member under AS 39.35.870
(a) who has retired from the plan," to improve clarity of
meaning.
MS. ABBOTT stated that the last change made was to change the
retroactive effective date of the bill from January 1, 2014, to
January 1, 2013 to encompass more families who had suffered
these terrible losses.
4:43:51 PM
CHAIR OLSON advised members that the fiscal note was being
worked on along with an actuarial study.
4:44:05 PM
REPRESENTATIVE COLVER thanked the sponsor for working on bill.
He expressed his view that the state has not been living up to
its obligations to Alaskans who were killed in the line of duty,
in particular, since these families have not only suffered loss
of loved ones, but are placed into financial hardship due to the
death of a major breadwinner - a father or a mother. He offered
his belief that it was morally and ethically wrong for this to
happen. He related his understanding that it costs money to
care for survivors, and it can be difficult to get the
legislature to act appropriately to take care of the surviving
spouses and family members. He acknowledged that this bill was
a complicated bill and that he found it difficult to catch all
of the language during the sectional analysis of the bill. He
asked for further clarification on the current statutory
language for survivor and death benefits and whether the bill
primarily provides health benefits or also survivor benefits to
help the survivors with the loss of their loved ones.
REPRESENTATIVE MILLETT explained that the current health care
coverage for survivors would be the same as other employees who
were separated from their job, which would be 30 days of health
coverage insurance. She clarified that this bill was limited to
health care coverage for the surviving spouse and dependents.
It would place survivors in the retiree health care pool, and
not in the active health care plan. Currently, all of the
public employees and teachers are covered under unions so
survivors receive death benefits, including an optional death
benefit for a lump sum payment. However, in terms of line of
death duty benefits, survivors are subject to the standard
separation of duty benefits for 30 days and after that they
could pay the COBRA [Consolidated Omnibus Budget Reconciliation
Act], which can be very expensive. She referenced a letter from
former Governor Parnell dated May 22, 2014, who learned of the
gap in survivor's medical health insurance and requested that
the Department of Public Safety (DPS) cover survivor's medical
health insurance in the operating budget for those law
enforcement officers who died in the line of duty. She
characterized this budget consideration as being a year-to-year
appropriation. In response to Representative Colver, she agreed
that this bill was limited to health insurance for the surviving
spouse and dependents for public safety officers who have died
in the line of duty.
4:48:32 PM
REPRESENTATIVE COLVER expressed an interest in taking care of
the families. He asked whether the state has any safety net for
monetary compensation when a parent or parents die leaving
behind young children. He said that their financial future
would forever be impacted by that event. He further asked
whether the state has a big insurance pool that anticipates
these kinds of traumas. He acknowledged that he was speaking a
bit off topic since he understands the bill is limited to
medical health insurance; however, he maintained his concern for
the overall wellbeing of the survivors. He said that without
the state being there to provide support, it may further the
continuance of the event that has already had a devastating
effect on the families. He maintained his belief that the state
needs to be there to support the families.
REPRESENTATIVE MILLETT stated that a member from the Public
Safety Employees' Association (PSEA) could speak about death
benefits, which are benefits negotiated by union contracts. In
addition, state employees have an option to increase death
benefit coverage for a monthly cost, as well as workers'
compensation coverage. She deferred to the Department of
Administration to answer specific questions.
4:50:39 PM
JAKE METCALFE, Executive Director, Public Safety Employees
Association, Inc. (PSEA), thanked Representative Millett and her
staff for all of the work that has been done on this bill, as
well as the Parnell and Walker administrations. He described
the bill as being a team effort. He stated that the PSEA
represents about 700-800 public safety employees throughout the
state, including the Alaska State Troopers. In May 2014, two
Alaska State Troopers, Sergeant Scott Johnson and Gabriel "Gabe"
Rich were tragically murdered in Tanana while responding to a
call. These law enforcement officers had spouses and surviving
children. Within days of the senseless tragedy, the PSEA
learned that the survivor's medical insurance would lapse unless
they opted for COBRA. He reported that PSEA has a health trust
and provide two types of insurance for its members, including a
catastrophic plan and a family medical plan. He stated that the
aforementioned members were covered under the family plan, which
costs $1,800 per month for the premium, but under the COBRA plan
would require that much in premium payments per month. Although
he was not an expert on COBRA, he related his understanding that
COBRA would be limited to between 18-36 months, after which the
survivors must come up with their own health insurance plan. He
characterized this as being a rather serious issue for the
survivors and dependents. The former Parnell administration
became involved, which has led to this bill, he said.
4:53:46 PM
MR. METCALFE offered his belief that HB 66 was important to the
survivors of members killed in the line of duty. The PSEA
supports this bill since it will provide spouses and survivors
of public employees killed in the line of duty continued medical
insurance coverage until the spouse or the survivors "age out."
This bill would carry out the state's duty to comfort and assist
families in their time of need and help to lessen the tragic
loss and burden of families who are thrown into an unexpected
situation when a family member is killed in the line of duty.
He respectfully requested that the committee pass the bill.
4:55:02 PM
REPRESENTATIVE JOSEPHSON said he has a death benefit bill before
the legislature. He related his understanding that if public
safety law enforcement officers were vested, that their families
would receive a pension; however, this bill only addressed
medical health care.
MR. METCALFE agreed that HB 66 related to health care coverage.
He explained that the PSEA has a contractually agreed upon death
benefit for $100,000. The PSEA was in the process of
negotiating its contract to increase the death benefit to
$200,000; however, even though the contract was agreed to at the
time the two troopers were killed, the effective date of the
contractual change was July 1, 2014. Thus their families
received the $100,000 death benefit, he said, which he described
as being "an awful situation."
4:56:55 PM
JEFF BRINK, Officer, Juneau Police Department, stated that he
works for the Juneau Police Department (JPD) and would like to
speak not only as a representative of his brothers and sisters
at JPD, but also for statewide law enforcement. He encouraged
members to consider passing HB 66. He said he feels for the
families of Sergeant Scott Johnson and Gabriel "Gabe" Rich and
would hate to see that happen again. He offered his belief that
the state can do better. He asked members to pass the bill on
to its next step.
4:58:11 PM
CHAIR OLSON offered his belief that committee members share his
sentiments, as well as those of the sponsor and Mr. Metcalfe.
He explained that the committee must wait for the actuarial
study and fiscal note prior to moving the bill. He stated that
public testimony would be held open.
[HB 66 was held over.]
4:59:06 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:59 p.m.