Legislature(2009 - 2010)SENATE FINANCE 532

02/11/2010 09:15 AM FINANCE

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SENATE BILL NO. 159                                                                                                           
     "An Act increasing the maximum funeral expenses payable                                                                    
     as a workers' compensation death benefit; and providing                                                                    
     for an effective date."                                                                                                    
10:00:51 AM                                                                                                                   
SENATOR JOE PASKVAN presented  the legislation and the merits                                                                   
of SB  159. He gave a  statement including history  about the                                                                   
workers' compensation  death benefit.  He discussed  the cost                                                                   
of  funeral expenses.  The payment  of the  death benefit  is                                                                   
granted  to the  survivors.  The  act increases  the  maximum                                                                   
funeral  expense payable  as  a workers'  compensation  death                                                                   
benefit  and  provides  for  an   effective  date.  The  bill                                                                   
addresses Section  1 of the  statute stating that  reasonable                                                                   
and necessary funeral expenses  are increased from $5000 to a                                                                   
more appropriate level of $10,000.  During the last ten years                                                                   
there have  been an  average of   26  fatalities per  year in                                                                   
Alaska  that require payment  of funeral  expenses under  the                                                                   
workers'  compensation  statutes. In  that  decade, the  most                                                                   
number of  deaths in a year was  39 and the fewest  number of                                                                   
deaths was 15.  Last year there were 17 fatalities  in Alaska                                                                   
that required  the payment  of workers' compensation  funeral                                                                   
expenses. He mentioned  the wide range of  necessary services                                                                   
involved in a funeral. These funeral  services easily surpass                                                                   
the maximum  death benefit. If  SB 159 is implemented,  there                                                                   
is no fiscal impact to the state.  System costs will increase                                                                   
by less  than 0.1 percent.  Current funeral benefit  has been                                                                   
unchanged for  a decade, and since  then the cost  of funeral                                                                   
expenses has risen significantly.                                                                                               
10:03:58 AM                                                                                                                   
Co-Chair  Stedman  asked  for  an  approximation  of  funeral                                                                   
costs. Senator  Paskvan responded  that funeral expenses  are                                                                   
estimated at  $12 to $15  thousand. The $10 thousand  benefit                                                                   
is  designed  to  compensate   for  reasonable  and  moderate                                                                   
funeral services.                                                                                                               
Co-Chair  Stedman  noted  the   zero  fiscal  note  from  the                                                                   
Department of Labor and Workforce Development.                                                                                  
10:05:37 AM                                                                                                                   
TRENA HEIKES,  DIRECTOR, DIVISION  OF WORKERS'  COMPENSATION,                                                                   
DEPARTMENT  OF LABOR  AND WORKFORCE  DEVELOPMENT stated  that                                                                   
the department  does  not have  a position  on the bill.  She                                                                   
researched  the average  funeral  cost excluding  burial  and                                                                   
cemetery charges and  the cost is between $6  and $7 thousand                                                                   
for the casket and the funeral home cost.                                                                                       
Co-Chair  Stedman   requested  various  amounts   of  funeral                                                                   
expenses comparing cremation versus burial.                                                                                     
Senator Huggins  asked if insurance  is available  to workers                                                                   
in the state.  He asked about insurance offered  by unions or                                                                   
recurring  employers.  Ms.  Heikes responded  that  for  work                                                                   
related deaths, workers' compensation  would pay up to $5000.                                                                   
She supposed  that private  insurance  and unions might  also                                                                   
contribute if a person participated in them.                                                                                    
Senator Huggins  asked if the  payment is doubled from  $5 to                                                                   
$10 thousand, who pays for the additional amount.                                                                               
10:09:40 AM                                                                                                                   
Ms. Heikes answered that the workers'  compensation insurance                                                                   
carrier who contracts  with the employer to  provide workers'                                                                   
compensation  insurance. The overall  increase in  premium is                                                                   
0.1 percent.  She clarified  that if  an employer paid  $1000                                                                   
premium per year, the cost would  be an additional dollar for                                                                   
the increase from $5 to $10 thousand.                                                                                           
Senator  Thomas asked  if private  benefits would  compromise                                                                   
the ability to  collect workers' compensation  benefits.  Ms.                                                                   
Heikes answered that if the person  has private insurance for                                                                   
funerals, then the  first $5000 would be covered  by workers'                                                                   
10:11:25 AM                                                                                                                   
DON  ETHERIDGE, ALASKA,  AFL,  CIO spoke  in  support of  the                                                                   
legislation.   He  acknowledged   that  funeral  costs   have                                                                   
increased dramatically.  Typically when  a person is  lost on                                                                   
the job,  the income is lost  for the family. He  opined that                                                                   
the increase is appropriate.                                                                                                    
Senator Huggins  asked about the percentage increase  for the                                                                   
employees. Mr. Etheridge  responded that he was  not aware of                                                                   
the  percentage  increase for  individuals.  Senator  Huggins                                                                   
thought  that  the information  was  important  to  determine                                                                   
exactly how the legislation would impact those involved.                                                                        
10:13:29 AM                                                                                                                   
BARBARA   HUFF   TUCKNESS,  DIRECTOR   OF   LEGISLATIVE   and                                                                   
GOVERNMENTAL AFFAIRS,  GENERAL TEAMSTERS LOCAL  959, spoke in                                                                   
support of the legislation. She  noted the safety perspective                                                                   
and the history of members lost  though work related efforts.                                                                   
She  noted that  the impact  and  focus on  safety issues  is                                                                   
greater. She added  that despite the choice  of casket versus                                                                   
burial,  the act  of transporting  the  body adds  additional                                                                   
10:16:10 AM                                                                                                                   
Co-Chair  Stedman   pointed  out  questions   regarding  data                                                                   
retrieval  about the number  of deaths  that occurred  in the                                                                   
workplace. He requested  data about the cost  of funerals and                                                                   
additional  expenses.   He  expressed  curiosity   about  the                                                                   
employees in union and out of union.                                                                                            
KEVIN   DOUGHERTY,   ALASKA  LABORERS,   EAGLE   RIVER   (via                                                                   
teleconference)  spoke  in  favor   of  the  legislation.  He                                                                   
pointed  out  that the  amount  of  work related  deaths  has                                                                   
declined.  He opined that  the legislation  is of benefit  to                                                                   
workers  and  also  saves  insurance   funding  for  workers'                                                                   
compensation.  He  stated that  he  sent  price data  to  the                                                                   
committee from various funeral  homes around Alaska. The data                                                                   
shows that  a typical  funeral has escalated  from $6  to $10                                                                   
thousand.  The bill  would  allow the  workers'  compensation                                                                   
insurance to cover  up to $10 thousand, but  a funeral charge                                                                   
that  is less  would only  receive the  amount necessary.  He                                                                   
noted that  the benefit has  not increased for  approximately                                                                   
10   years,  yet   the  cost   of   funerals  has   increased                                                                   
STACY   ALLEN,    LOBORERS   LOCAL   341,    ANCHORAGE   (via                                                                   
teleconference)  relayed a  recent experience  where a  union                                                                   
member was  lost and she was  privy to the  financial worries                                                                   
that greatly  affect families  and compound the  tragedy. She                                                                   
noted  that  collections  and resources  were  received  from                                                                   
other union  members, but she  could not imagine  the absence                                                                   
of the union family.                                                                                                            
10:21:27 AM                                                                                                                   
Senator  Thomas  asked about  the  fatalities  listed in  the                                                                   
documentation  provided  by  the   Department  of  Labor  and                                                                   
Workforce  Development,  "Total  Filings  by Type"  (Copy  on                                                                   
File). He was uncertain about  the fatality numbers listed in                                                                   
the lower section  of the table beginning with  number 224 in                                                                   
FY99 running to FY08.                                                                                                           
Ms.  Heikes responded  that  the upper  portion  of the  data                                                                   
sheet indicates  the actual numbers  of injuries  reported in                                                                   
the  division. The  lower portion  represents  the number  of                                                                   
files  open  by  insurers.  She   noted  that  ongoing  death                                                                   
benefits  were payable  to the survivors  under the  statute.                                                                   
The insurance  carriers  would have open  files because  they                                                                   
continue  to  pay  benefits. The  numbers  cited  by  Senator                                                                   
Thomas indicate the ongoing files  through which benefits are                                                                   
paid. The questions  address the issue of whether  or not the                                                                   
workers' compensation act had  jurisdiction over the reported                                                                   
SB  159  was   HEARD  and  HELD  in  Committee   for  further                                                                   
10:29:10 AM                                                                                                                   
Co-Chair  Stedman  provided  an   overview  of  the  upcoming                                                                   
committee meetings.                                                                                                             

Document Name Date/Time Subjects
2010_02_10 AARP Support for SB 199.pdf SFIN 2/11/2010 9:15:00 AM
SB 199