A joint legislative committee voted Tuesday to endorse a workers’ compensation reform bill that would substantially increase available benefits to injured workers – and likely raise the cost of insurance.
The vote by the Legislature’s Labor and Housing Committee sent an omnibus bill to the full House and Senate that contains some – but not all – of about two dozen proposed workers’ compensation system reforms submitted in separate bills this legislative session.
The committee voted along party lines, with the eight Democratic members supporting a more liberal version of the bill, and the five Republicans endorsing a more conservative version that would keep more of the current rules and restrictions in place.
The bill endorsed by the committee’s Democratic majority would implement three key areas of reform: Raising the maximum weekly workers’ comp benefit, reinstating a cost-of-living adjustment for those receiving long-term benefits, and increasing benefits to workers with partial disabilities.
Supporters of the reforms say the system has become unfair to workers thanks to past reforms designed to lower insurance costs. Opponents say the current system has provided much-needed stability to employers following a crisis period in the late ’80s and early ’90s.
At Tuesday’s hearing, John Rohde, executive director of the Maine Workers’ Compensation Board, provided a preliminary estimate to the committee that the Democrats’ version of the bill would increase the cost of workers’ comp insurance by about 4 percent. Critics of reform questioned the reliability of that estimate.
“No actuaries (were) involved in his conclusions and there was an absence of significant cost drivers,” said Tony Payne, senior vice president of Maine Employers’ Mutual Insurance Co., or MEMIC, the state’s largest provider of workers’ comp insurance with about two-thirds of all Maine workers under its coverage.
Payne has said it is impossible to accurately predict what the cost increase will be, because proposed changes to the system are likely to have compounding effects that are not fully understood.
Still, supporters of the Democrats’ bill said it would go a long way toward reinstating certain key rights for injured workers that were taken away during a previous reform effort in the early 1990s.
“There’s a real opportunity to restore some balance and fairness to this system,” said Matt Schlobohm, executive director of the Maine AFL-CIO.
The current push for workers’ compensation reform by pro-labor groups comes more than 25 years after Maine imposed various restrictions on compensation to alleviate a situation in which the state’s workers’ comp insurance had become the most expensive in the nation and insurers were leaving the state in droves. Since the reforms of 1992, workers’ compensation costs in Maine have fallen toward the middle of the pack – to No. 12 by one measure and No. 19 by another.
A compromise version of the reform bill that would have proposed more subtle changes to the system was worked out among representatives of business, labor and insurance interests, but Republican lawmakers on the committee ultimately rejected it. The Democratic members had made it a condition of supporting the compromise bill that at least some Republicans would also have to support it.
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