Enrolled HB 79: Relating to workers' compensation; relating to the second injury fund; relating to service fees and civil penalties for the workers' safety programs and the workers' compensation program; relating to incorporation of reference materials in workers' compensation regulations; excluding independent contractors from workers' compensation coverage; establishing the circumstances under which certain nonemployee executive corporate officers and members of limited liability companies may obtain workers' compensation coverage; establishing a legislative workers' compensation working group; and providing for an effective date.
00Enrolled HB 79 01 Relating to workers' compensation; relating to the second injury fund; relating to service fees 02 and civil penalties for the workers' safety programs and the workers' compensation program; 03 relating to incorporation of reference materials in workers' compensation regulations; 04 excluding independent contractors from workers' compensation coverage; establishing the 05 circumstances under which certain nonemployee executive corporate officers and members of 06 limited liability companies may obtain workers' compensation coverage; establishing a 07 legislative workers' compensation working group; and providing for an effective date. 08 _______________ 09 * Section 1. AS 23.05.067(a) is amended to read: 10 (a) Each insurer providing workers' compensation insurance and each 11 employer who is self-insured or uninsured for purposes of AS 23.30 in this state shall
01 pay an annual service fee to the department for the administrative expenses of the state 02 for workers' safety programs under AS 18.60 and the workers' compensation program 03 under AS 23.30 as follows: 04 (1) for each employer, 05 (A) except as provided in (b) of this section, the service fee 06 shall be paid each year to the department at the time that the annual report is 07 required to be filed under AS 23.30.155(m) or (n); and 08 (B) the service fee is 2.9 percent of all payments reported to the 09 division of workers' compensation in the department under AS 23.30.155(m) 10 or (n), except second injury fund payments; and 11 (2) for each insurer, the director of the division of insurance shall, 12 under (e) of this section, deposit from funds received from the insurer under 13 AS 21.09.210 a service fee of 2.5 [1.82] percent of the direct premium income for 14 workers' compensation insurance received by the insurer during the year ending on the 15 preceding December 31, subject to all the deductions specified in AS 21.09.210(b). 16 * Sec. 2. AS 23.05.067(e) is amended to read: 17 (e) Annual service fees and civil penalties collected under this section and 18 AS 23.30.155(c) and (m) shall be deposited in the workers' safety and compensation 19 administration account in the state treasury. Under AS 37.05.146(c), the service fees 20 and civil penalties shall be accounted for separately, and appropriations from the 21 account are not made from the unrestricted general fund. The legislature may 22 appropriate money from the account for expenditures by the department for necessary 23 costs incurred by the department in the administration of the workers' safety programs 24 contained in AS 18.60 and of the Alaska Workers' Compensation Act contained in 25 AS 23.30. Nothing in this subsection creates a dedicated fund or dedicates the money 26 in the account for a specific purpose. Money deposited in the account does not lapse at 27 the end of a fiscal year unless otherwise provided by an appropriation. 28 * Sec. 3. AS 23.30.070(a) is amended to read: 29 (a) Within 10 days from the date the employer has knowledge of an injury or 30 death or from the date the employer has knowledge of a disease or infection, alleged 31 by the employee or on behalf of the employee to have arisen out of and in the course
01 of the employment, the employer shall file with [SEND TO] the division a report 02 setting out 03 (1) the name, address, and business of the employer; 04 (2) the name, address, and occupation of the employee; 05 (3) the cause and nature of the alleged injury or death; 06 (4) the year, month, day, and hour when and the particular locality 07 where the alleged injury or death occurred; and 08 (5) the other information that the division may require. 09 * Sec. 4. AS 23.30.070(b) is amended to read: 10 (b) Additional reports with respect to the injury and to the condition of the 11 employee shall be filed [SENT] by the employer with [TO] the division at the times 12 and in the manner that the director prescribes. 13 * Sec. 5. AS 23.30.070(d) is amended to read: 14 (d) Filing [MAILING] of the report with [AND A COPY TO] the division in 15 a format prescribed by the director [IN A STAMPED ENVELOPE], within the 16 time prescribed in (a) or (b) of this section, is compliance with this section. 17 * Sec. 6. AS 23.30.070(f) is amended to read: 18 (f) An employer who fails or refuses to file [SEND] a report required of the 19 employer by this section or who fails or refuses to file [SEND] the report required by 20 (a) of this section within the time required shall, if so required by the board, pay the 21 employee or the legal representative of the employee or other person entitled to 22 compensation by reason of the employee's injury or death an additional award equal to 23 20 percent of the amounts that were unpaid when due. The award shall be against 24 either the employer or the insurance carrier, or both. 25 * Sec. 7. AS 23.30.098 is amended to read: 26 Sec. 23.30.098. Regulations. Under AS 44.62.245(a)(2), in adopting or 27 amending regulations under this chapter, the department may incorporate future 28 amended versions of a document or reference material incorporated by reference if the 29 document or reference material is one of the following: 30 (1) Current Procedural Terminology Codes, produced by the American 31 Medical Association;
01 (2) Healthcare Common Procedure Coding System, produced by the 02 federal Centers for Medicare and Medicaid Services [AMERICAN MEDICAL 03 ASSOCIATION]; 04 (3) International Classification of Diseases, published by the World 05 Health Organization [AMERICAN MEDICAL ASSOCIATION]; 06 (4) Relative Value Guide, produced by the American Society of 07 Anesthesiologists; 08 (5) Diagnostic and Statistical Manual of Mental Disorders, produced 09 by the American Psychiatric Association; 10 (6) Current Dental Terminology, published by the American Dental 11 Association; 12 (7) Resource-Based Relative Value Scale, produced by the federal 13 Centers for Medicare and Medicaid Services; 14 (8) Ambulatory Payment Classifications, produced by the federal 15 Centers for Medicare and Medicaid Services; [OR] 16 (9) Medicare Severity Diagnosis Related Groups, produced by the 17 federal Centers for Medicare and Medicaid Services; 18 (10) International Classification of Diseases, 10th Revision, 19 Clinical Modification, developed by the National Center for Health Statistics; 20 (11) Clinical Diagnostic Laboratory Services, produced by the 21 federal Centers for Medicare and Medicaid Services; 22 (12) Durable Medical Equipment, Prosthetics, Orthotics, and 23 Supplies, produced by the federal Centers for Medicare and Medicaid Services; 24 (13) Payment Allowance Limits for Medicare Part B Drugs, 25 Average Sale Price, produced by the federal Centers for Medicare and Medicaid 26 Services; or 27 (14) Ambulance Fee Schedule, produced by the federal Centers for 28 Medicare and Medicaid Services. 29 * Sec. 8. AS 23.30.100(a) is amended to read: 30 (a) Notice of an injury or death in respect to which compensation is payable 31 under this chapter shall be given within 30 days after the date of such injury or death
01 [TO THE BOARD AND] to the employer. 02 * Sec. 9. AS 23.30.100(b) is amended to read: 03 (b) The notice must be in a format prescribed by the director and 04 [WRITING,] contain the name and address of the employee, a statement of the time, 05 place, nature, and cause of the injury or death, and authority to release records of 06 medical treatment for the injury or death, and be signed by the employee or by a 07 person on behalf of the employee, or, in case of death, by a person claiming to be 08 entitled to compensation for the death or by a person on behalf of that person. 09 * Sec. 10. AS 23.30.100(c) is amended to read: 10 (c) Notice shall be given [TO THE BOARD BY DELIVERING IT OR 11 SENDING IT BY MAIL ADDRESSED TO THE BOARD'S OFFICE, AND] to the 12 employer by delivering it to the employer or by sending it by mail addressed to the 13 employer at the employer's last known place of business. If the employer is a 14 partnership, the notice may be given to a partner, if a limited liability company, the 15 notice may be given to a member, or if a corporation, the notice may be given to an 16 agent or officer on [UPON] whom legal process may be served or who is in charge of 17 the business in the place where the injury occurred. 18 * Sec. 11. AS 23.30.155(a) is amended to read: 19 (a) Compensation under this chapter shall be paid periodically, promptly, and 20 directly to the person entitled to it, without an award, except where liability to pay 21 compensation is controverted by the employer. To controvert a claim, the employer 22 must file a notice, in a format [ON A FORM] prescribed by the director, stating 23 (1) that the right of the employee to compensation is controverted; 24 (2) the name of the employee; 25 (3) the name of the employer; 26 (4) the date of the alleged injury or death; and 27 (5) the type of compensation and all grounds on [UPON] which the 28 right to compensation is controverted. 29 * Sec. 12. AS 23.30.155(c) is amended to read: 30 (c) The insurer or adjuster shall notify the division in a format [AND THE 31 EMPLOYEE ON A FORM] prescribed by the director that the payment of
01 compensation has begun or has been increased, decreased, suspended, terminated, 02 resumed, or changed in type. An initial report shall be filed not later than [WITH 03 THE DIVISION AND SENT TO THE EMPLOYEE WITHIN] 28 days after the date 04 of issuing the first payment of compensation. If, at any time, 21 days or more pass and 05 no compensation payment is issued, a report notifying the division [AND THE 06 EMPLOYEE] of the termination or suspension of compensation shall be filed not 07 later than [WITH THE DIVISION AND SENT TO THE EMPLOYEE WITHIN] 28 08 days after the date the last compensation payment was issued. A report shall also be 09 filed not later than [WITH THE DIVISION AND SENT TO THE EMPLOYEE 10 WITHIN] 28 days after the date of issuing a payment increasing, decreasing, 11 resuming, or changing the type of compensation paid. When the insurer or adjuster 12 files a report, the division shall notify the employee of the payment or change in 13 payment of compensation. If the division is [AND THE EMPLOYEE ARE] not 14 notified within the 28 days prescribed by this subsection for reporting, the insurer or 15 adjuster shall pay a civil penalty of $100 for the first day plus $10 for each day after 16 the first day that the notice was not given. Total penalties under this subsection may 17 not exceed $1,000 for a failure to file a required report. Penalties assessed under this 18 subsection are eligible for reduction under (m) of this section. A penalty assessed 19 under this subsection after penalties have been reduced under (m) of this section shall 20 be increased by 25 percent and shall bear interest at the rate established under 21 AS 45.45.010. 22 * Sec. 13. AS 23.30.155(d) is amended to read: 23 (d) If the employer controverts the right to compensation, the employer shall 24 file with the division, in a format prescribed by the director, [AND SEND TO THE 25 EMPLOYEE] a notice of controversion on or before the 21st day after the employer 26 has knowledge of the alleged injury or death. If the employer controverts the right to 27 compensation after payments have begun, the employer shall file with the division, in 28 a format prescribed by the director, [AND SEND TO THE EMPLOYEE] a notice 29 of controversion not later than the date [WITHIN SEVEN DAYS AFTER] an 30 installment of compensation payable without an award is due. When payment of 31 temporary disability benefits is controverted solely on the grounds that another
01 employer or another insurer of the same employer may be responsible for all or a 02 portion of the benefits, the most recent employer or insurer who is party to the claim 03 and who may be liable shall make the payments during the pendency of the dispute. 04 When a final determination of liability is made, any reimbursement required, including 05 interest at the statutory rate, and all costs and attorney fees incurred by the prevailing 06 employer, shall be made not later than [WITHIN] 14 days after the determination. 07 * Sec. 14. AS 23.30.155(m) is amended to read: 08 (m) On or before March 1 of each year, the insurer or adjuster shall file a 09 verified annual report in a format [ON A FORM] prescribed by the director stating 10 the total amount of all compensation by type, the number of claims received and the 11 percentage controverted, medical and related benefits, vocational rehabilitation 12 expenses, legal fees, including a separate total of fees paid to attorneys and fees paid 13 for the other costs of litigation, and penalties paid on all claims during the preceding 14 calendar year. If the annual report is timely and complete when received by the 15 division and provides accurate information about each category of payments, the 16 director shall review the timeliness of the insurer's or adjuster's reports filed during the 17 preceding year under (c) of this section. If, during the preceding year, the insurer or 18 adjuster filed at least 99 percent of the reports on time, the penalties assessed under (c) 19 of this section shall be waived. If, during the preceding year, the insurer or adjuster 20 filed at least 97 percent of the reports on time, 75 percent of the penalties assessed 21 under (c) of this section shall be waived. If, during the preceding year, the insurer or 22 adjuster filed 95 percent of the reports on time, 50 percent of the penalties assessed 23 under (c) of this section shall be waived. If, during the preceding year, the insurer's or 24 adjuster's reports have not been filed on time at least 95 percent of the time, none of 25 the penalties assessed under (c) of this section shall be waived. The penalties that are 26 not waived are due and payable when the insurer or adjuster receives notification from 27 the director regarding the timeliness of the reports. If the annual report is not filed by 28 March 1 of each year, the insurer or adjuster shall pay a civil penalty of $100 for the 29 first day the annual report is late and $10 for each additional day the report is late. If 30 the annual report is incomplete when filed, the insurer or adjuster shall pay a civil 31 penalty of $1,000.
01 * Sec. 15. AS 23.30.205(e) is amended to read: 02 (e) An employer or the employer's carrier shall notify the commissioner of 03 labor and workforce development of any possible claim against the second injury fund 04 as soon as practicable, but in no event later than 100 weeks after the employer or the 05 employer's carrier has knowledge of the injury or death or after the deadline for 06 submitting a claim for reimbursement under (g) of this section. 07 * Sec. 16. AS 23.30.205 is amended by adding a new subsection to read: 08 (g) An employer or the employer's insurance carrier shall satisfy all 09 requirements for reimbursement under this section, including notice of any possible 10 claim and payment of compensation in excess of 104 weeks, before submitting a claim 11 for reimbursement to the second injury fund. Notwithstanding (a) and (b) of this 12 section, a claim for reimbursement may not be submitted for an injury or death that 13 occurs after August 31, 2018, and must be submitted before October 1, 2020. An 14 employer that qualifies for reimbursement under this section shall continue to receive 15 reimbursement payments on claims accepted by the fund, or ordered by the board, 16 until the fund's liabilities for the claim are extinguished. 17 * Sec. 17. AS 23.30.230(a) is amended to read: 18 (a) The following persons are not covered by this chapter: 19 (1) a part-time baby-sitter; 20 (2) a cleaning person; 21 (3) harvest help and similar part-time or transient help; 22 (4) a person employed as a sports official on a contractual basis and 23 who officiates only at sports events in which the players are not compensated; in this 24 paragraph, "sports official" includes an umpire, referee, judge, scorekeeper, 25 timekeeper, organizer, or other person who is a neutral participant in a sports event; 26 (5) a person employed as an entertainer on a contractual basis; 27 (6) a commercial fisherman, as defined in AS 16.05.940; 28 (7) an individual who drives a taxicab whose compensation and written 29 contractual arrangement is as described in AS 23.10.055(a)(13), unless the hours 30 worked by the individual or the areas in which the individual may work are restricted 31 except to comply with local ordinances;
01 (8) a participant in the Alaska temporary assistance program 02 (AS 47.27) who is engaged in work activities required under AS 47.27.035 other than 03 subsidized or unsubsidized work or on-the-job training; 04 (9) a person employed as a player or coach by a professional hockey 05 team if the person is covered under a health care insurance plan provided by the 06 professional hockey team, the coverage is applicable to both work-related and 07 nonwork-related injuries, and the coverage provides medical and related benefits as 08 required under this chapter, except that coverage may not be limited to two years from 09 the date of injury as described under AS 23.30.095(a); in this paragraph, "health care 10 insurance" has the meaning given in AS 21.12.050; 11 (10) a person working as a qualified real estate licensee who performs 12 services under a written contract that provides that the person will not be treated as an 13 employee for federal income tax or workers' compensation purposes; in this 14 paragraph, "qualified real estate licensee" means a person who is required to be 15 licensed under AS 08.88.161 and whose payment for services is directly related to 16 sales or other output rather than the number of hours worked; [AND] 17 (11) a transportation network company driver who provides a 18 prearranged ride or is otherwise logged onto the digital network of a transportation 19 network company as a driver; and 20 (12) a person employed as an independent contractor; a person is 21 an independent contractor for the purposes of this section only if the person 22 (A) has an express contract to perform the services; 23 (B) is free from direction and control over the means and 24 manner of providing services, subject only to the right of the individual 25 for whom, or entity for which, the services are provided to specify the 26 desired results, completion schedule, or range of work hours, or to 27 monitor the work for compliance with contract plans and specifications, 28 or federal, state, or municipal law; 29 (C) incurs most of the expenses for tools, labor, and other 30 operational costs necessary to perform the services, except that materials 31 and equipment may be supplied;
01 (D) has an opportunity for profit and loss as a result of the 02 services performed for the other individual or entity; 03 (E) is free to hire and fire employees to help perform the 04 services for the contracted work; 05 (F) has all business, trade, or professional licenses required 06 by federal, state, or municipal authorities for a business or individual 07 engaging in the same type of services as the person; 08 (G) follows federal Internal Revenue Service requirements 09 by 10 (i) obtaining an employer identification number, if 11 required; 12 (ii) filing business or self-employment tax returns for 13 the previous tax year to report profit or income earned for the 14 same type of services provided under the contract; or 15 (iii) intending to file business or self-employment tax 16 returns for the current tax year to report profit or income earned 17 for the same type of services provided under the contract if the 18 person's business was not operating in the previous tax year; and 19 (H) meets at least two of the following criteria: 20 (i) the person is responsible for the satisfactory 21 completion of services that the person has contracted to perform 22 and is subject to liability for a failure to complete the contracted 23 work, or maintains liability insurance or other insurance policies 24 necessary to protect the employees, financial interests, and 25 customers of the person's business; 26 (ii) the person maintains a business location or a 27 business mailing address separate from the location of the 28 individual for whom, or the entity for which, the services are 29 performed; 30 (iii) the person provides contracted services for two 31 or more different customers within a 12-month period or engages
01 in any kind of business advertising, solicitation, or other marketing 02 efforts reasonably calculated to obtain new contracts to provide 03 similar services. 04 * Sec. 18. AS 23.30.240 is repealed and reenacted to read: 05 Sec. 23.30.240. Officers of corporations, municipal corporations, and 06 nonprofit corporations, and members of limited liability companies as employees. 07 (a) Except as provided in (b) of this section, an executive officer elected or appointed 08 and empowered in accordance with the charter and bylaws of a corporation or a 09 member of a limited liability company organized under AS 10.50 is not an employee 10 of the business entity under this chapter if the executive officer or member owns at 11 least 10 percent of the business entity. Except as provided in (b) of this section, an 12 executive officer of a municipal corporation or charitable, religious, educational, or 13 other nonprofit corporation is not an employee of the corporation under this chapter. 14 (b) Any type of corporation or limited liability company may bring an 15 executive officer or a member exempted under (a) of this section within the coverage 16 of the business entity's insurance contract by specifically including the executive 17 officer or member in the contract of insurance. The election to bring the executive 18 officer or member within the business entity's coverage continues in force for the 19 period during which the contract of insurance is in effect. During that period, an 20 executive officer or a member brought within the coverage of the insurance contract is 21 an employee of the business entity under this chapter. 22 * Sec. 19. AS 23.30.247(c) is amended to read: 23 (c) This section may not be construed to prohibit an employer from requiring a 24 prospective employee to fill out a preemployment questionnaire or application 25 regarding the person's prior health or disability history as long as it is meant to 26 [EITHER DOCUMENT WRITTEN NOTICE FOR SECOND INJURY FUND 27 REIMBURSEMENT UNDER AS 23.30.205(c) OR] determine whether the employee 28 has the physical or mental capacity to meet the documented physical or mental 29 demands of the work. 30 * Sec. 20. AS 23.30.260 is amended by adding a new subsection to read: 31 (c) Notwithstanding AS 23.30.145 and (a) of this section, approval of a fee is
01 not required if the parties who reach an agreement in regard to a claim for injury or 02 death under this chapter agree to the payment of attorney fees, and the agreement in 03 regard to a claim for injury or death does not require board approval under 04 AS 23.30.012. 05 * Sec. 21. AS 23.30.395(19) is repealed and reenacted to read: 06 (19) "employee" means a person who is not an independent contractor 07 as described in AS 23.30.230 and who, under a contract of hire, express or implied, is 08 employed by an employer; 09 * Sec. 22. AS 23.30.040(f) and 23.30.155(q) are repealed. 10 * Sec. 23. The uncodified law of the State of Alaska is amended by adding a new section to 11 read: 12 LEGISLATIVE WORKERS' COMPENSATION WORKING GROUP. (a) The 13 legislative workers' compensation working group is established to 14 (1) review the state's workers' compensation system, including the procedures, 15 compensable injuries, treatment guidelines, monitoring of controlled substance prescription 16 and use, and the burden of proof to support a claim; 17 (2) consult with representatives of the following stakeholders: 18 (A) the Department of Commerce, Community, and Economic 19 Development; 20 (B) the Department of Labor and Workforce Development; 21 (C) the medical services review committee established under 22 AS 23.30.095(j); 23 (D) organized labor; 24 (E) school district administrators; and 25 (F) the state's business community; and 26 (3) recommend improvements to laws relating to workers' compensation. 27 (b) The working group consists of six members, three of whom are members of the 28 house of representatives appointed by the speaker of the house of representatives, and three of 29 whom are members of the senate appointed by the president of the senate. The speaker of the 30 house of representatives and the president of the senate shall each appoint one member from 31 each body as a co-chair.
01 (c) The working group shall meet in the interim between sessions and prepare a report 02 of its findings, including draft legislation, during the First Regular Session of the Thirty-First 03 Alaska State Legislature. The working group shall submit the report, draft legislation, and any 04 other accompanying reports to the governor, senate secretary, and chief clerk of the house of 05 representatives for distribution to all legislators on or before December 1, 2018, and shall 06 notify the legislature that the report is available. 07 (d) The working group may make any additional reports as it considers necessary. 08 (e) The working group terminates January 31, 2019. 09 * Sec. 24. The uncodified law of the State of Alaska is amended by adding a new section to 10 read: 11 APPLICABILITY. (a) AS 23.30.205(e), as amended by sec. 15 of this Act, and 12 AS 23.30.205(g), added by sec. 16 of this Act, apply to notice of any possible claims or 13 claims for reimbursement submitted on or after the effective date of secs. 15 and 16 of this 14 Act. 15 (b) Notwithstanding AS 23.30.240, as repealed and reenacted by sec. 18 of this Act, 16 the terms of an insurance policy or contract in effect before the effective date of sec. 18 of this 17 Act shall comply with AS 23.30.240, as that section read on the day before the effective date 18 of sec. 18 of this Act. AS 23.30.240, as repealed and reenacted by sec. 18 of this Act, applies 19 to an insurance policy or contract entered into or renewed on or after the effective date of sec. 20 18 of this Act. 21 * Sec. 25. The uncodified law of the State of Alaska is amended by adding a new section to 22 read: 23 TRANSITION: SATISFACTION OF SECOND INJURY FUND CLAIMS. Subject to 24 appropriation, the balance of the second injury fund created under AS 23.30.040 lapses into 25 the general fund when all liability for accepted claims under AS 23.30.205 to the second 26 injury fund and claims ordered to be paid from that fund have been satisfied. 27 * Sec. 26. The uncodified law of the State of Alaska is amended by adding a new section to 28 read: 29 TRANSITION: REGULATIONS. The Department of Labor and Workforce 30 Development and the Alaska Workers' Compensation Board may adopt regulations to 31 implement secs. 1 - 22 of this Act. The regulations take effect under AS 44.62
01 (Administrative Procedure Act), but not before the effective date of the law implemented by 02 the regulation. 03 * Sec. 27. Sections 15, 16, 23, and 26 of this Act take effect immediately under 04 AS 01.10.070(c). 05 * Sec. 28. Section 19 of this Act takes effect September 1, 2018. 06 * Sec. 29. Section 18 of this Act takes effect August 1, 2019.