Legislature(2017 - 2018)HOUSE FINANCE 519
04/18/2017 01:30 PM House FINANCE
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HOUSE BILL NO. 38 "An Act relating to the calculation and payment of workers' compensation benefits in the case of permanent partial impairment; relating to the calculation and payment of workers' compensation death benefits payable to a child of an employee where there is no surviving spouse; relating to the calculation and payment of workers' compensation death benefits for an employee without a surviving spouse or child; relating to notice of workers' compensation death benefits; and providing for an effective date." 2:01:17 PM Vice-Chair Gara MOVED to ADOPT the proposed committee substitute for HB 38, Work Draft 30-LS0160\R (Wallace, 4/11/17). Representative Wilson OBJECTED for discussion. REPRESENTATIVE ANDY JOSEPHSON, SPONSOR, explained the bill. House Bill 38 addressed an injustice that came to light when Abigail Caudle, a twenty-six year-old electrical worker, was killed on the job in 2011. Because Ms. Caudle was unmarried and had no dependents, the workers' compensation system paid only for her funeral expenses. HB 38 directs that when a worker dies without a spouse or minor children, then either relatives who depended on that worker for support, or the worker's estate, will receive a respectful amount of compensation. HB 38 also solves the problem of inadequate financial support of children after their single parent dies on the job. Currently, teenagers may receive only a few months of financial assistance before their support is cut off when they turn eighteen. The bill continued payment of the death benefit for five years after the child reaches legal adulthood. Finally, HB 38 would bring more equitable compensation to workers for permanent injuries, such as loss of an arm. One-time payments for permanent, partial disability had not increased since 2000, and their value had been eroded by inflation. The bill increased the payments to off-set past inflation, and provided an annual adjustment based on the Anchorage Consumer Price Index. 2:10:51 PM Vice-Chair Gara surmised that a worker's compensation claim was often much less. Representative Josephson replied it was generally true. Vice-Chair Gara wondered whether there would be the same compensation should a person lose one arm versus both arms. Representative Josephson replied that he felt that the compensation would increase, so the scheduled weekly wage equivalent would increase. PAUL KELLY, STAFF, REPRESENTATIVE ANDY JOSEPHSON, furthered that the schedule was determined by the American Medical Association guides, so that would determine the percentage of permanent partial impairment that the worker would receive. Representative Wilson WITHDREW her OBJECTION. There being NO OBJECTION, Work Draft 30-LS0160\R was ADOPTED. Representative Guttenberg noted that there was an elevator analogy where the worker received compensation, but wondered whether the customer would receive compensation. Representative Josephson responded that the customer would not receive worker's compensation. He stated that there would generally be no compensation, unless the customer filed a claim or a lawsuit. 2:14:53 PM Representative Guttenberg stressed that worker's compensation was created to get the worker back to work, and not only to create a "right or wrong." He wondered whether there was a similar law. Representative Josephson replied that he did not know the answer. 2:16:26 PM Representative Kawasaki referred to Representative Josephson's statement related to family and friends. Representative Josephson replied he had meant the statement almost in a spiritual sense. Representative Kawasaki asked how far the benefit extended. Representative Josephson replied that the benefit ended at the parents; if there were no parents it went to the estate. 2:20:06 PM Representative Kawasaki spoke about a person who was a beneficiary of the estate. He asked for verification the money could go to someone who was not a family member. Representative Josephson supposed there could be a best friend named in the will who would get the benefit. Representative Kawasaki asked if the $100,000 was an admission that it was the current status with inflation. Representative Josephson replied that his staff had done some research and the number may be as high as $140,000. Representative Wilson pointed to agency receipts in the fiscal note. She wondered if employers would be paying more into workers' compensation to cover the increase. Representative Josephson answered that the number was $512,000, which came principally from an increase in the PPI [personal property insurance]; it was a fiscal note increase that would have to be collected in the event of death. The problem was if the situation was not upgraded they were stuck at 2000 indefinitely. Representative Wilson did not understand where the money was coming from. She asked for detail. 2:24:54 PM Representative Josephson answered risk management was funded by interagency receipts. MARIE MARX, DIRECTOR, WORKERS' COMPENSATION DIVISION, DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT, introduced herself. SHERI GRAY, RISK MANAGER, DIVISION OF RISK MANAGEMENT, DEPARTMENT OF ADMINISTRATION, answered that the dissemination to the agencies was through the cost of risk agencies who were under the state's self-insurance plan for worker's compensation. She explained that it involved the number of full-time employees and a formula of experience of actual worker's compensation claims and the expectation of additional claims. She remarked that there was a complex process, and she could not fully explain the process. Representative Wilson surmised that the interagency receipts were paid into the funds to pay for the possible occurrence. Ms. Gray answered that she did not know. Representative Wilson stated the money had to be coming from somewhere. She was trying to determine the fiscal impact. She asked the department to follow up. She understood the note was indeterminate. Ms. Gray answered that the allocations to the agencies were done on an annual basis and were based on 80 percent of prior five years claims and 20 percent of expected claims. The process it was spread out through agencies, so they were not taking the full brunt. 2:29:37 PM Representative Wilson asked if there was a specific fund where the money was collected into. Ms. Gray replied in the affirmative. Representative Wilson asked how it was done. Ms. Gray would follow up. Vice-Chair Gara stated there was an annual contribution by agencies, and remarked in some years where there was not enough money there would have to be an additional appropriation. Ms. Gray agreed to follow up with additional information. 2:30:49 PM MARIANNE BURKE, MOTHER OF ABIGAIL CAUDLE, ANCHORAGE (via teleconference), testified that she was the mother of Abigail Caudle. Her daughter had been up on a ladder working and inadvertently touched a live wire. She had not been revived. It had been very difficult to understand that there was no liability to the employer. Abigail had been given nothing for her life. She continued to explain the situation. She was frustrated there had been no justice. She could not go to civil court, and could only pursue workers' compensation. She asked the committee members to consider the value of their children's lives. She thought $20,000 was an insult to the value of life. She wondered what was wrong with Alaska being number one in recognizing human life. She stressed that the accident had not been her daughter's fault. She urged the committee to pass the bill. 2:37:50 PM Vice-Chair Gara expressed his sympathy. Ms. Burke looked at Chapter 25 of Alaska State Statute, which was the "Defective Machinery Act." She stressed that in that statute, the employer was liable, but she had received to recognition of that statute. [Co-Chair Seaton joined the meeting] Co-Chair Foster indicated that Mr. Kelly had a short presentation. 2:39:58 PM Mr. Kelly provided a PowerPoint presentation titled "HB 38: Abigail Caudle Act" (copy on file): The estate of a single worker with no dependents who dies on the job has no remedy protect these employees PPI