Legislators mull two workers’ comp bills Compromise sought on injuries covered

AUGUSTA – Two similar, but still different proposals to “fix” the state’s Workers’ Compensation system face lawmakers as the Legislature reconvenes today. Gov. Angus King and key lawmakers hope a compromise will be adopted, but no one is predicting swift adoption of either plan.

At issue is the cost to employers of the so-called Kotch decision by the Maine Supreme Judicial Court in February which found that all of the injuries that prevent a person from returning to work – whether the injuries occurred on the job or not – should be considered when determining workers’ compensation benefits.

One measure to be offered today is by Sen. Marge Kilkelly, D-Wiscasset, who has had earlier proposals passed in the Senate but rejected in the House. Her latest offering builds on an earlier measure that repealed the Kotch decision, but allowed for the combining of injuries only if they occurred on the job in determining the level and duration of benefits. The new proposal limits the coverage to injuries that occurred on the job in Maine.

“I think it is a significant improvement and I hope it will be approved,” King told reporters Tuesday. “It goes a long way, and I hope it will be enough.”

The National Council of Compensation Insurers estimated the Kotch ruling would cost employers as much as $50 million a year for future claims, and as much as $150 million more for past claims that could be re-evaluated under the change.

That estimate sent shock waves across the state, with many employers saying the increased costs would force them to lay off workers or cut benefits such as health insurance in order to stay in business. In 2001, employers paid over $200 million for workers’ compensation insurance. Self-insurers paid out more than $91 million in claims in 2000, according to the most recent data available.

Lawmakers remained deadlocked over the issue for days before finally recessing April 12 to give themselves more time to come up with a compromise.

King said Tuesday that in an effort to solve the problem, he will no longer insist that any solution have zero cost to employers. He is supporting the new Kilkelly language because it limits the so-called stacking of injuries to those incurred on the job in Maine.

“I had said I would not support any proposal that would increase employers’ costs,” he said, “but I support this and it could cost up to a 1.1 percent increase. I don’t like that, but it may not have a cost, and if it does, it is not much.”

Each 1 percent increase in workers’ compensation costs translates to about $3 million, King said.

Meanwhile some Democrats and labor leaders are challenging the accuracy of the NCCI projections. They argue the court decision would not affect a lot of injured workers and they want an independent assessment of the costs. They want any legislation to include such a review.

“We need to have an independent look at these figures,” said House Majority Leader Patrick Colwell, D-Gardiner. “We want to come out of here with something that not only repeals Kotch but looks to the future.”

He said a proposal is being drafted that would repeal the Kotch decision, not increase the cost of the system, and provide for an independent review of the NCCI numbers.

Labor unions have been opposing any change, arguing that how a worker was injured does not affect his or her ability to work and that if a person is impaired so he cannot work he deserves benefits.

Workers’ Compensation was first established in Maine in 1915 as part of a national movement to take care of injured workers, and stop a series of expensive lawsuits that injured workers were winning against employers. In return for the pay and health benefits under the system, workers gave up their right to sue employers.

With wage replacement payments and medical costs over $230 million last year, those in favor of repealing the Kotch decision want to prevent the cost of the Workers’ Compensation system from going any higher. If the legislation increases the number of workers eligible for benefits, then they believe eligibility requirements need to be adjusted to keep costs from increasing.

The different approaches to solving the impasse will be discussed by lawmakers in party caucuses today. But it is far from certain that either approach will garner a majority of lawmakers.

“I think there is pretty broad agreement we need to solve this and get out of here,” said Senate President Richard Bennett, R-Norway. “I hope we can get done in one day, but no one knows if we can. I certainly hope so.”