legislative reforms. holly leuchtag, supervising attorney ohio bureau of workers’ compensation...

Legislative Reforms

Holly Leuchtag, Supervising Attorney Ohio Bureau of Workers’ Compensation

Mary Nichols, SVP & General Counsel Texas Mutual Insurance Company

George Parham, Chief Legal Counsel Idaho State Fund Insurance

2005 AASCIF Survey Composite

Survey Question #1• In your opinion, what were the three

most important workers’ compensation bills proposed by your organization or others in your state’s /province’s /territory’s last/current legislative session?

Survey Question #2• Does your organization introduce or

lobby for workers’ compensation legislation? If not, why?

There are seven respondents to this survey of 7 questions.


Survey Question #5• What would be your number one priority, if

asked, as far as legislation to be enacted in the workers’ compensation area?

Survey Question #4• Please provide citations to statutes and briefly summarize

the statutes that your organization has been successful in implementing through the legislative process.


Survey Question #3• What, if any, proactive measures does

your organization employ to identify workers’ compensation legislative issues?


Survey Question #7• If you have utilized the association

with AASCIF or any other association in your legislative endeavors, please describe how you have made use of your relationship with those organization and whether those associations have been beneficial in your legislative endeavors.


Survey Question #6• Do you work with other states/provinces/

territories in your legislative process?

2005 AASCIF Survey CompositeThere are seven respondents to this survey of 7 questions.

The Seven (7) Respondents are:

• Alberta Workers’ Compensation Board• California State Compensation

Insurance Fund• Idaho State Insurance Fund (#1 only)• Injured Workers’ Insurance Fund

(Maryland)• Missouri Employers Mutual• CompSource Oklahoma• SAIF Corporation Oregon

Survey Question #1

In your opinion, what were the three most important workers’ compensation bills proposed by your organization or others in your state’s /province’s /territory’s last/current legislative session?

Alberta Workers’ Compensation Board Douglas R. Mah, Secretary & General Counsel

Question #1 In your opinion, what were the three most important workers’ compensation bills proposed by your organization or others in your state’s/province’s/territory’s last/current legislative session?

• Only one workers’ compensation bill was proposed in the last legislative session in Alberta, Workers’ Compensation Amendment Act, 2005.

• The bill passed second reading. It will be on the legislative order paper for third reading when the legislature resumes in the fall.


• The bill contains 3 objectives:– Extend statutory immunity from lawsuit to

members of the WCB board of directors for all actions or decisions taken in good faith

– Vest control of subrogated legal actions in the WCB

– Allow for payment of cost-of-living adjustments on temporary partial disability benefits


CaliforniaState Compensation Insurance FundRobert W. Daneri, Chief Counsel

Question #1 In your opinion, what were the three most important workers’ compensation bills proposed by your organization or others in your state’s/province’s/territory’s last/current

legislative session?

• The 2004 Legislative session in California produced SB 899, an omnibus workers’ compensation bill containing many landmark changes. These include the following.


– The treating physician presumption was repealed.

– Created provision for Medical Provider Networks allowing employers to control medical care.

– Requires employers to provide medical treatment until a claim is accepted or rejected, up to a $10,000.00 limit.

– Permanent Disability disputes to be resolved by an Agreed Medical Examiner or one Qualified Medical Examiner (formerly two QME’s).


– Temporary Disability limited to two years in most cases.

– Permanent Disability increased/decreased by 15% depending on whether the employer offers return to work (decrease).

– For permanent disability rating, replaces “diminished ability to compete” with “diminished future earning capacity”.


– Apportionment to be based on causation and employer liable for only the percentage of permanent disability directly caused by the injury.

– Prior permanent disability awards conclusively presumed to continue.

– Penalties for unreasonable delay in paying benefits limited to up to 25% of the benefit payment delayed with a cap of $10,000.


– SB 899 became effective April 19, 2004 and most of its provisions also apply to existing cases that have not reached final judgment by the same date. Prior permanent disability awards conclusively presumed to continue.


• SB 899 is having, and will have, huge impact in California and represents all of the significant workers’ compensation law passed in California since its effective date. No workers’ compensation legislation of significance has become law yet in 2005.

Idaho State Insurance FundGeorge M. Parham, Chief Legal Counsel


• Idaho Senate Bill 1092, Workers Compensation• Passed, signed into law• History, Impact or Predicted Impact of the Legislation

• This bill amends the law to clarify that medical benefits are subject to the same statutes of limitations as compensation benefits. The Industrial Commission had previously interpreted this code section to mean that an injured worker’s right to apply for medical benefits was not subject to the statute of limitations that applied to regular compensation benefits, and as such there was no limit as to when a claim for medical benefits could be filed. This legislation should ensure that claims for medical benefits are treated the same as claims for other compensation benefits.

http://www3.state.id.us/oasis/S1092.html



• Idaho House Bill 331, Workers Compensation• Passed and signed into law• History, Impact or Predicted Impact of the Legislation:

• This bill amends existing law to provide that the Industrial Commission shall devise a medical fee schedule to govern the medical fees that can be charged under the workers compensation system. This law could have significant impact on the cost of medical care for injured employees once it takes effect. Presently fees for medical services are subject to approval of the Industrial Commission pursuant to their rules that require medical fees to be reasonable and customary. Reasonable and customary is defined to mean that medical charges cannot exceed the provider’s usual charge and cannot exceed the customary charge which has been defined to mean a charge that does not exceed the 90th percentile of usual charges as determined by the Industrial Commission. The present system of determining reasonable medical fees is somewhat subjective depending on the provider. This law will set forth a set fee schedule for medical treatment and reduce the number of disputes between providers and sureties. http://www3.state.id.us/oasis/H0331.html

http://www3.state.id.us/oasis/H0331.html


• Senate Bill 1158aa, Naturopathic Physicians• Passed, signed into law• History, Impact or Predicted Impact of the

Legislation:• This bill sets forth a procedure for the licensure

and regulation of Naturopathic Physicians. This bill could have significant impacts on the workers compensation system because it provides for the licensing of naturopaths as physicians and as such treatment of by naturopathic medicine could constitute medical treatment under the workers compensation law. The full impact of this law is not yet known because the standards for practice have yet to be adopted by the Board of Naturopathic Medical Examiners that will be created by this law. This law appear to put licensed naturopaths on an equal footing with chiropractic physicians.

•http://www3.state.id.us/oasis/S1158.html


Injured Workers’ Insurance Fund (Maryland)Rona Finkelstein, Director, Legal Services

Question #1 In your opinion, what were the three most important workers’ compensation bills proposed by your organization or others in your state’s/province’s/territory’s last/current

legislative session?

• There were bills filed to preclude the payment of temporary partial or temporary total disability compensation to retired persons and incarcerated persons. Both bills failed.

Missouri Employers MutualPaul D. Larimore, Managing Attorney, Larimore, Brown & Strobing


• Senate Bills 1 and 130 were passed, significantly changing the Missouri W/C statute (§287 RSMo)

• Changes are effective 8/28/05


• Projected impact of major changes– Change from “liberal construction” to

“strict interpretation” and decisions more conservative (§287.800)

– Standard of medical causation shift from “a substantial factor” to “the prevailing factor” expected to make some cases that were compensable under current law noncompensable under the new law (§287.020)


• Projected impact of major changes– Increase in penalties for violation of safety

rule from 15% in current statute to 25 – 50% in new law, and penalties for violating drug/alcohol policy from 15% in current law to 50% in new law expected to put teeth in these provisions. (§287.120)

– Abrogation of extension of premises doctrine to the extent that it extends liability for accidents that occur on property not controlled or owned by employer (§287.020.5) seen as shift away from drift toward positional risk seen in judicial opinions over the last few years.


• Projected impact of major changes

– Multiple other changes of lesser impact combine to make the statutory changes overwhelmingly employer-oriented.

CompSource OklahomaKevin Nelson, General Counsel


• SB 1X PASSED• An Act relating to workers'

compensation; relating to workers' compensation fraud; increasing penalties; defining terms; authorizing use of certain rates prior to filing. See attached summary.



• SB 846 FAILED• Relating to workers'

compensation; relates to workers' compensation penalties.



• HB 2046 FAILED• Relating to workers'

compensation; authorizing civil suit under circumstances.


• The above bills represent the omnibus workers compensation reform bill for the 2005 legislature. HB 2046 was proposed by the Republican led House. SB 846 was proposed by the Democratically held Senate. SB 1X was the special session compromise bill between the House, Senate and the Democratic Governor.


• The full summaries of these bills are 20+ pages as each bill ended up over 100 pages. According to NCCI, the impact of SB 1X will range from an 8.3% reduction in rates ($58 million) to a 15.6% reduction ($108 million). CompSource has not determined the projected impact of the legislation at this time.

SAIF Corporation, Oregon Chris Davie, VP Corporate Policy & External Affairs

Question #1 In your opinion, what were the three most important workers’ compensation bills proposed by your organization or others in

your state’s/province’s/territory’s last/current legislative session?

SB 310 introduced by SAIF Corporation to improve public accountability and provide greater protection of records that have had to be turned over to our principal competitor, Liberty Northwest. The bill became the subject of “poison pill” amendments promoted by Liberty’s associates and we were forced to kill the bill.


• SB 386 revised the definition of permanent total disability. In most circumstances, a worker will be PTD if unable to return to a job that pays less than the federal poverty guideline for a family of three. Signed by Governor; takes effect 1/1/06.

• SB 311 establishes new procedures for the scheduling and conduct of independent medical examinations. Signed by the Governor; takes effect 1/1/06.

Survey Question #2

Does your organization introduce or lobby for workers’ compensation legislation? If not, why?


Question #2 Does your organization introduce or lobby for workers’ compensation legislation? If not, why?

• The Alberta WCB works collaboratively with government to introduce legislative reform that will benefit the workers’ compensation system in the province.

• The WCB may make requests for legislative change but does not formally lobby



• Legislation is viewed by the WCB as being in the realm of public policy

• The WCB’s job is not to make public policy but rather implement the public policy that the government makes.



• No overt lobbying because as a state agency we are in somewhat of a neutral position. However, over the years we have produced papers proposing legislative remedies for various workers’ compensation issues. Prior to SB 899 we called for medical cost containment and presented statutory language to accomplish same.



• IWIF typically does not introduce workers’ compensation legislation, unless the Bill has a unique application to IWIF. For example, last session we proposed an amendment to the IWIF organic statute that allowed IWIF to cancel a policy on 10 days notice for failure to pay as premium, the same time limit that applies to commercial insurers under the Insurance Code.


• The bill passed. Labor & Employment Art. §10-133. As to proposed legislation that broadly applies to the industry, IWIF is asked to provide a fiscal impact statement, and we sometimes testify as to the cost or effect of the bill, without taking a position on the merits of the bill.



• MEM has maintained a neutral position in terms of W/C legislation to avoid the perception that we are a political body

• Considering that MEM was created by statute in 1995, that is a particular concern for MEM.



• Generally, CSO will lobby against workers compensation legislation only if it will have a specific negative impact on CSO different from that of other carriers. CSO will generally not lobby for workers compensation legislation unless it is proposed by CSO.



• The general philosophy is that CSO will play on any field that the state wants to provide as long as the field is level. In addition, our board is made up of appointees including the legislature and the Governor, and we do not want general reform discussions to be fought out on our Board. Also, staying out of the battles tends to give us more credibility with all interested parties.



• Yes.

Survey Question #3

What, if any, proactive measures does your organization employ to identify workers’ compensation legislative issues?


Question #3 What, if any, proactive measures does your organization employ to identify workers’ compensation legislative issues?

• The Alberta WCB operates an interactive stakeholder website, whereby operational, policy or legislative issues can be brought forward

• The Alberta WCB also holds an annual general meeting and an annual stakeholder update meeting during which issues of legislative concern may be raised.


Question #3 What, if any, proactive measures does your organization employ to identify workers’ compensation legislative issues?

• Legislative issues are also raised through

– Court cases– Appeal cases– Internal monitoring


Question #3 What, if any, proactive measures does your organization employ to identify workers’ compensation issues?

• We have developed a network of relationships with legislative staffers, industry lobbyists, the administration, and research organizations which assist us in identifying trends which may become issues. If we see a trend, we in turn advise these parties of the trend. We also monitor the national and local press to get a feel for public perception of what may become an issue as well as listen to policyholders as to what may need legislative attention.



• We sit on and work with various committees (Chamber of Commerce, Maryland Defense Council, etc) that monitor proposed and pending legislation.



• MEM closely tracks and monitors proposed changes and provides feedback without direct lobbying



• We contract with a lobbyist, who helps provide advance warning of legislation.

• As bills are filed, the General Counsel reviews each bill and assesses if it will impact any part of our agency, forming our tracking list (100-150 bills). From there, the bills are disseminated to each department for their review and comment.


• The comments are evaluated and an “important bill” list is developed for review with our lobbyist and the Board (20-40 bills). From there, we provide the policy and strategy sub-committee of the Board with a recommended “action” list of bills we wish to support or oppose (1-5 bills). The committee and then the Board decides whether to take a public stand on those bills.


• Through session, both the lobbyist, General Counsel, President and the Board monitor progress of all lists. We use an on-line subscription services to provide us updates. We will also contact policyholder groups with interest in particular matters.



• We identify issues internally and from our customers. We decide what issues are suitable to bring forward and the best way to do it. Once the session begins, we monitor all bills to identify potential workers’ compensation issues.

Survey Question #4

Please provide citations to statutes and briefly summarize the statutes that your organization has been successful in implementing through the legislative process.


Question #4 Please provide citations to statutes and briefly summarize the statutes that your organization has been successful in implementing through the legislative process.

• None in the last year



• No statutes authored by State Fund. However, concepts we have advocated have become legislation such as apportionment, medical fee schedules, and softening of unreasonable delay penalties.



• None in the past year.



• Nothing in the 2005 session.



• We generally do not introduce bills in our own name. Instead, we work with other parties to incorporate our ideas.

• An example is 2005’s SB 386, cited above.

Survey Question #5

What would be your number one priority, if asked, as far as legislation to be enacted in the workers’ compensation area?


Question #5 What would be your number one priority, if asked, as far as legislation to be enacted in the workers’ compensation area?

• Subrogation


Question #5 What would be your number one priority, if asked, as far a s legislation to be enacted in the workers’ compensation area?

• Our prime interest is for the tenets of SB 899 and prior reforms to flourish, particularly the Medical Provider Network provisions allowing for employer medical control.



• Medical cost containment.



• Fair to all parties

• In the past, Missouri workers’ compensation law has favored the employee



• None


Question #5 What would be your number one priority, if asked, as far as legislation to be enacted in the workers’ compensation area?

• Provide more complete protection for policyholder confidential information held by SAIF, and for SAIF’s own sensitive business records that would not normally be shared with a competitor.

Survey Question #6

Do you work with other states/provinces/ territories in your legislative process?


Question #6 Do you work with other states/provinces/territories in your legislative process?

• Often there is consultation with WCBs in other Canadian provinces or territories during the legislative process.



• Seldom. We have worked with the State of Washington to gather reference material on medical cost containment.



• The need has never arisen.



• Not generally, but we will monitor activities in other states.



• No.

Survey Question #7

If you have utilized the association with AASCIF or any other association in your legislative endeavors, please describe how you have made use of your relationship with those organization and whether those associations have been beneficial in your legislative endeavors.


Question #7 If you have utilized the association with AACIF or any other association in your legislative endeavors, please describe how you have made use of your relationship with those organization and whether those associations have been beneficial in your legislative endeavors.

• Sometimes we have relied on our association with the Association of Workers’ Compensation Boards of Canada (AWCBC) to obtain information on the legislation and practice in other Canadian jurisdictions as background for considering legislative proposals in our province.

• This has proved beneficial to the legislative process.



• Not Applicable



• The need has never arisen.



• Other than on TRIA, we have not generally contacted other funds for help. We have used information gained from AASCIF conferences to bolster positions we have taken.


• We will sometimes contact policyholder groups on particular issues. We will sometimes get help from NCCI when they price a bill. We will also call upon the agents’ association to help us on insurance issues. Generally, this has been helpful when targeted to a specific issue relevant to the group.



• Minimal coordination with NCCI.

• Worked successfully with in-state trade associations that support the same goals of fair benefits for workers with available and affordable coverage for employers.

Legislative Reforms

legislative reforms. holly leuchtag, supervising attorney ohio bureau of workers’ compensation...

Documents

workers compensation

legislative process

legislative endeavors

aascif survey compositethere

legislative order paper

wcb board of directors

legislature resumes

statutory immunity