Workers compensation changes aimed at reducing injuries

Bill links employee fees to worker injuries as an incentive for safer workplaces

Posted: Tuesday, May 30, 2000

Getting injured on the job should be less of a burden on workers, and happen less often, under two measures soon to be Alaska law.

Gov. Tony Knowles proposed two bills earlier this year that revamped the way workers compensation is paid for and changed the level of benefits paid out of the program for the first time in a dozen years. He signed one into law Thursday. The other will be signed soon.

Dwight Perkins, deputy commissioner of the Department of Labor, said the idea behind the reworking of the system is to limit workplace injuries. Employers would pay for the programs based on how much money they pay in claims.

``If the employer doesn't have any injured workers, they don't have to pay the fee,'' Perkins said. ``They will be paying a fee based on their injuries rather than pay a flat fee on their premium.

``The goal here is to reduce injuries on the job.''

With the proposal, about $3.5 million would be raised annually. Some $1.2 million of that would be used to pay for the state's Occupational Safety and Health Administration program. The rest of the money would go to fund administering the state's workers compensation program. Both programs, after a couple of years, will become ``off-budget'' items, meaning they would no longer rely on annual general fund contributions.

That reliance, and the Legislature's efforts to cut general fund spending, almost led to the state handing over OSHA administration to the federal government during budget deliberations in 1999.

Under the version of the measure approved by the Legislature, most businesses would pay 3.6 percent of the amount of their reported claims in 2001, dropping steadily to 3.2 percent in 2003. Self-insured concerns would start off paying less, but end up paying the same by 2004, under the new law.

Perkins, who is also a Juneau Assembly member, said Juneau is one of about 30 governments and businesses in the state that are self-insured. Under current rules, self-insured entities -- which employ about a quarter of Alaska's work force -- don't pay for the administration of workers compensation claims. Under the new law, they would.

Perkins said that if the city received the same amount of workers compensation claims as in 1998, the city would pay more than $18,000 in 2004.

The state, also self-insured, would be paying more than $231,000 into the fund by then. The final votes in the state House and Senate widely approved the new funding plan, with five Senate votes against it. A second bill to increase compensation for the program won near-unanimous legislative support.

The state's unions supported the measure.

Pamela La Bolle, president of the Alaska State Chamber of Commerce, said she heard little criticism of the measures. That the method by which businesses would pay changes raised some worry, but not a significant amount, she said.

``There were some concerns about paying the tax, but it's my understanding it's not increasing the burden that much on anybody. It just changes the way it's paid.

``It also increases the benefits somewhat, but they hand't been increased in some time.''

Workers compensation claims, under the new law, would be paid from a new account - the Workers Safety and Compensation Administration Account.

And workers, Perkins said, would see compensation benefit levels go up for the first time since 1988 under the two-measure package. The increased benefits rely on Knowles' promise to sign another bill approved by the Legislature into law.

That law would make a variety of changes to compensation rates, Perkins said. There'd be more money for burial arrangements, surviving family members and for retraining if an injury ended a worker's ability to return to his or her job - from $10,000 to $13,000.

Minimum weekly workers compensation payments would rise to $170, and the maximum would become $772 per week.

When it becomes law, the measure will increase the cost of workers compensation by between 7.7 percent and 8.9 percent, according to Perkins.

``There's all kinds of increases,'' Perkins said. ``Benefits have not been adjusted in 12 years.''

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