Legislature(2017 - 2018)HOUSE FINANCE 519

02/15/2018 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to a Call of the Chair --
+= HB 38 WORKERS' COMPENSATION: DEATH BENEFITS TELECONFERENCED
Heard & Held
+= HB 79 OMNIBUS WORKERS' COMPENSATION TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 79                                                                                                             
                                                                                                                                
     "An  Act relating  to workers'  compensation; repealing                                                                    
     the  second injury  fund upon  satisfaction of  claims;                                                                    
     relating to  service fees and  civil penalties  for the                                                                    
     workers' safety programs  and the workers' compensation                                                                    
     program;  relating   to  the  liability   of  specified                                                                    
     officers  and members  of  specified business  entities                                                                    
     for  payment  of  workers'  compensation  benefits  and                                                                    
     civil  penalties;  relating   to  civil  penalties  for                                                                    
     underinsuring or failing to  insure or provide security                                                                    
     for  workers'   compensation  liability;   relating  to                                                                    
     preauthorization   and  timely   payment  for   medical                                                                    
     treatment and  services provided to  injured employees;                                                                    
     relating  to incorporation  of  reference materials  in                                                                    
     workers'   compensation    regulations;   relating   to                                                                    
     proceedings  before  the Workers'  Compensation  Board;                                                                    
     providing   for  methods   of   payment  for   workers'                                                                    
     compensation   benefits;  relating   to  the   workers'                                                                    
     compensation benefits guaranty  fund authority to claim                                                                    
     a   lien;   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; relating  to the duties of  injured employees                                                                    
     to    report    income    or    work;    relating    to                                                                    
     misclassification of  employees and  deceptive leasing;                                                                    
     defining   'employee';   relating   to   the   Workers'                                                                    
     Compensation  Board's approval  of attorney  fees in  a                                                                    
     settlement  agreement; and  providing for  an effective                                                                    
     date."                                                                                                                     
                                                                                                                                
1:45:42 PM                                                                                                                    
Co-Chair  Seaton  MOVED  to  ADOPT  the  proposed  committee                                                                    
substitute  for  HB  79, Work  Draft  30-GH1789\R  (Wallace,                                                                    
2/13/18).                                                                                                                       
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
JANE PIERSON,  STAFF, REPRESENTATIVE NEAL  FOSTER, explained                                                                    
the  changes in  the work  draft committee  substitute (CS).                                                                    
She explained  that most  of the amendments  in the  CS were                                                                    
advanced   by  the   Department  of   Labor  and   Workforce                                                                    
Development  (DOL) and  were technical  in  nature with  one                                                                    
exception. She  pointed to page  4, line 6 that included the                                                                    
language  "is  a  business  entity   that  is"  that  was  a                                                                    
technical  amendment.  She  moved   to  the  next  technical                                                                    
amendment  on page  7, line  18 that  deleted the  following                                                                    
language "by  expiration or  cancellation of  the employer's                                                                    
insurance" and  inserted "with  the insurance  provisions of                                                                    
this chapter."  She turned to  the next technical  change on                                                                    
page 9, line  13 to page 10, line 1  that added Sections 16,                                                                    
Section 17, and  Section 18 to allow  for electronic filing.                                                                    
She highlighted  page 10, lines  11 through 14  that changed                                                                    
"who was  permitted to  represent a  claimant at  a workers'                                                                    
compensation   hearing"  to   "any   person  authorized   by                                                                    
regulation  of the  board" which  was a  substantive change.                                                                    
Current  law  specified a  person  could  be represented  by                                                                    
anyone  with written  permission.  She  elaborated that  the                                                                    
House  Judiciary Committee  version  "U"  allowed for  self-                                                                    
representation,  or representation  by an  attorney licensed                                                                    
to practice  law in the state,  a parent, if the  party is a                                                                    
minor, guardian, or court-appointed representative.                                                                             
                                                                                                                                
Ms. Pierson pointed  to page 15, line 18 and  noted that the                                                                    
word "in"  was eliminated  and changed  to "under."  On page                                                                    
15, lines 19 through 28  was related to submitting claims to                                                                    
a  second injury  fund and  was  technically corrected.  She                                                                    
referenced page 22, line 9  and related that AS 23.30.110(d)                                                                    
was changed  from "appealed and reenacted"  to "as amended."                                                                    
She  noted that  page 22,  lines 14  through 16  contained a                                                                    
conforming amendment. She reviewed that  on page 23, line 6,                                                                    
another  conforming amendment  changed 2017  to 2018  and on                                                                    
page 23, line 7 the  final conforming amendment changed 2018                                                                    
from 2019.                                                                                                                      
                                                                                                                                
1:49:20 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki  requested clarification  regarding                                                                    
the substantive  change relating to  claimant representation                                                                    
to anyone permitted by regulation  of the board. He wondered                                                                    
what the  regulation would  be since it  was not  defined in                                                                    
the statute.                                                                                                                    
                                                                                                                                
MARIE  MARX,  DIRECTOR,  DIVISION  OF  LABOR  AND  WORKFORCE                                                                    
DEVELOPMENT, DEPARTMENT OF  LABOR AND WORKFORCE DEVELOPMENT,                                                                    
explained that the alternative  representative list would be                                                                    
determined by  the Alaska  Workers' Compensation  Board. She                                                                    
reminded   committee  members   that  the   board  had   two                                                                    
functions:  it  had  regulatory   authority  and  served  as                                                                    
adjudicators and  held hearings. She believed  the board was                                                                    
in  the unique  position to  know the  types of  individuals                                                                    
that should represent the claimants.  She furthered that the                                                                    
requirement provided  the "flexibility" to modify  the list.                                                                    
She characterized  the provision as a  "compromise" from the                                                                    
prior version's provision and existing statute.                                                                                 
                                                                                                                                
1:51:23 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg asked  for a  review of  what the                                                                    
bill  would  fix.  Ms.  Marx  offered  an  overview  of  the                                                                    
workers'  compensation  process.   She  expounded  that  the                                                                    
injured worker  filed a claim, which  initiated a litigation                                                                    
process. The  department and the  board had found  that when                                                                    
people were represented by  "competent counsel" things moved                                                                    
quickly, efficiently  and with beneficial outcomes  for both                                                                    
parties.  In   addition,  the  department  had   staff  that                                                                    
provided the self-represented  worker assistance that guided                                                                    
them  through the  process and  explained  their rights  and                                                                    
duties  under  the  Alaska Worker's  Compensation  Act.  She                                                                    
reported  that  the  assistance   helped  the  process  work                                                                    
efficiently.  Whereas,  when   people  were  represented  by                                                                    
"parties that  were not a  parent of  a minor or  were court                                                                    
appointed"  such  as a  spouse  or  friend the  process  was                                                                    
inefficient and  the outcomes for  injured workers  were not                                                                    
beneficial  to the  worker  or the  employer  and the  cases                                                                    
tended  to last  longer.  The "non-attorney"  representative                                                                    
was not  bound by ethical  and professional rules  and often                                                                    
lacked  an   understanding  of  the   worker's  compensation                                                                    
process. The  changes were proposed to  help injured workers                                                                    
come  to a  successful conclusion  of their  cases and  help                                                                    
employers reduce litigation expenses.                                                                                           
                                                                                                                                
1:53:30 PM                                                                                                                    
                                                                                                                                
Representative Wilson asked if the  same board that made the                                                                    
mediation  decision would  decide  who  could represent  the                                                                    
claimant.  Ms.  Marx  replied  that  "since  the  board  had                                                                    
regulatory  authority" the  board would  establish rules  on                                                                    
representation.   The  litigation   rules  would   apply  to                                                                    
hearings  held  by the  board.  She  reported that  a  board                                                                    
hearing panel  consisted of  a full-time  attorney appointed                                                                    
as  the chair,  one lay  member  from industry  and one  lay                                                                    
member from labor. Representative  Wilson was concerned that                                                                    
the  entity  that  made  the   decision  decided  who  could                                                                    
represent  a claimant  and  it "seemed  like  a conflict  of                                                                    
interest." Ms.  Marx replied that  the board  had regulatory                                                                    
authority  prior to  statehood  and the  three member  panel                                                                    
existed since 1946. The board  established the rules for the                                                                    
hearing  process and  administration of  the Alaska  Workers                                                                    
Compensation  Act in  conjunction  with DOL.  Representative                                                                    
Wilson  maintained  her  belief   regarding  a  conflict  of                                                                    
interest. She thought that the  claimant who was not able to                                                                    
have  the  representation she  wanted  would  not trust  the                                                                    
outcome.  Ms. Marx  emphasized that  the regulation  process                                                                    
included public comment. When a  rule was proposed there was                                                                    
always an oral  hearing and period for  written comment. The                                                                    
rules  were established  by the  board with  input from  the                                                                    
department and  the public. She characterized  the influence                                                                    
of public input on the regulatory process as "huge."                                                                            
                                                                                                                                
1:56:20 PM                                                                                                                    
                                                                                                                                
Co-Chair  Seaton wanted  to ensure  that a  person could  be                                                                    
self-represented. He pointed to the  words on page 10, lines                                                                    
11 and  12 "each  party may present  evidence." He  asked if                                                                    
the  board   could  prevent   "the  defendant"   from  self-                                                                    
representation.  He wanted  to  ensure the  language in  the                                                                    
bill could not allow the board to preclude self-                                                                                
representation. Ms.  Marx answered that the  authority would                                                                    
be turned over to the  board. She elucidated that 90 percent                                                                    
of the parties; claimants and employers, were self-                                                                             
represented. The rules would clarify  who could represent an                                                                    
employer. She  thought it would  be helpful to  know whether                                                                    
it included  the insurance  claim administrator  and medical                                                                    
billing specialist versus the  doctor. She communicated that                                                                    
there was a balance between  delineation in statute or board                                                                    
regulation regarding  claimant and  employer representation.                                                                    
She  remarked that  a list  in statute  would be  "long" and                                                                    
"inflexible." She voiced  that the board had  an interest in                                                                    
making  sure the  process ran  efficiently  and fairly.  She                                                                    
declared  that self-representation  was  a  "fixture in  our                                                                    
system." She could  not imagine a situation  where the board                                                                    
would  preclude any  party from  self-representation at  the                                                                    
board level. She emphasized that  anything was possible, but                                                                    
the scenario  was improbable. She  assured that as  chair of                                                                    
the regulatory  hearings she would ensure  that the outcomes                                                                    
were in  "alignment" with  needs of  the department  and the                                                                    
law.                                                                                                                            
                                                                                                                                
1:59:55 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton  stated that the prior  wording specifically                                                                    
allowed  self-representation   and  asked  whether   he  was                                                                    
correct. Ms.  Marx agreed. Co-Chair Seaton  guessed that the                                                                    
language   had  been   included   to   specify  that   self-                                                                    
representation could  not be precluded. He  wondered whether                                                                    
further clarity  was necessary in  the CS. Ms.  Marx replied                                                                    
that  the   department  would  not  oppose   including  more                                                                    
specific language  that a person may  be self-represented or                                                                    
otherwise   represented  as   set  by   the  board   through                                                                    
regulation. She  underscored that it  was not the  intent to                                                                    
keep  people from  being self-represented  before the  board                                                                    
and most parties were "unrepresented."                                                                                          
                                                                                                                                
2:01:57 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster asked for committee adoption of the CS.                                                                         
                                                                                                                                
Representative Wilson voiced that  she also wanted to ensure                                                                    
that people could be self-represented.                                                                                          
                                                                                                                                
Representative  Wilson WITHDREW  her OBJECTION.  There being                                                                    
NO further OBJECTION, it was so ordered.                                                                                        
                                                                                                                                
Co-Chair Foster  MOVED to  ADOPT Amendment  1, 30-GH1789\R.1                                                                    
(2/15/18) (copy on file).                                                                                                       
                                                                                                                                
     Page 2, lines 4 - 5:                                                                                                       
     Delete "relating to reemployment benefits;"                                                                                
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Co-Chair Foster  explained the  amendment. He  reported that                                                                    
the  amendment was  proposed by  the  department and  simply                                                                    
removed "relating  to reemployment benefits" from  the title                                                                    
of the  bill since the item  was no longer addressed  in the                                                                    
bill.                                                                                                                           
                                                                                                                                
Representative  Wilson WITHDREW  her OBJECTION.  There being                                                                    
NO OBJECTION, it was so ordered.                                                                                                
2:03:14 PM                                                                                                                    
                                                                                                                                
Representative Kawasaki wondered if  the committee wanted to                                                                    
try to fix the CS. He  MOVED to ADOPT Conceptual Amendment 2                                                                    
with  the  inclusion  of "self-represented  or"  before  the                                                                    
existing language  "represented by any person  authorized by                                                                    
regulation of the board" on page 10, line 13.                                                                                   
                                                                                                                                
There  being  NO  OBJECTION,   Conceptual  Amendment  2  was                                                                    
ADOPTED.                                                                                                                        
                                                                                                                                
Representative  Wilson   requested  to  hold  the   bill  in                                                                    
committee for further review.                                                                                                   
                                                                                                                                
2:05:17 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:05:52 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Foster concurred  with  Representative Wilson  and                                                                    
relayed that the committee would hold the bill.                                                                                 
                                                                                                                                
Committee  discussion ensued  regarding the  adequate amount                                                                    
of time to further review the bill.                                                                                             
                                                                                                                                
HB  79  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair Foster handed the gavel over to Co-Chair Seaton.                                                                       
                                                                                                                                
2:07:41 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:09:18 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Seaton  communicated that  HB  79  would be  heard                                                                    
again the following Monday.                                                                                                     
                                                                                                                                

Document Name Date/Time Subjects
HB038 Supporting Document - FY19 DRM WC Projections with HB38 PPI Cost Increase Estimate 2.12.18.pdf HFIN 2/15/2018 1:30:00 PM
HB 38
HB 79 CS version R.pdf HFIN 2/15/2018 1:30:00 PM
HB 79
HB 38 Rep Josephson WC HFC Oppose ltr.pdf HFIN 2/15/2018 1:30:00 PM
HB 38
HB 79 - Changes from version U to version R.pdf HFIN 2/15/2018 1:30:00 PM
HB 79
HB 38 amendments #1 and #2.pdf HFIN 2/15/2018 1:30:00 PM
HB 38
HB 79 -Amendment #1.pdf HFIN 2/15/2018 1:30:00 PM
HB 79