Lawmakers next week will consider a proposal to change Maine’s workers’ compensation laws — a move that proponents call fair and reasonable and which organized labor termed “completely unacceptable.”
Legislators on the Labor, Commerce, Research and Economic Development Committee last year were presented late in the session with a bill by Rep. Andre Cushing, R-Hampden, that proposed overhauling the 20-year-old workers’ comp system.
Leaders on the committee asked Paul Sighinolfi, executive director of the Workers’ Compensation Board, to have a series of meetings with stakeholders — including labor, employers, Cushing, the insurer MEMIC and others.
After a series of meetings through the fall, Sighinolfi has drafted a new bill proposal. The committee is scheduled to have a public hearing on Cushing’s original bill Friday; Sighinolfi’s hope is lawmakers set aside that bill and instead consider the one he drafted.
“I think it simplifies the system, it clarifies what people’s benefits are and it brings certainty to the system, for both employers and employees,” said Sighinolfi. “And honestly — I think it creates a fairer system for everybody.
“My focus is let’s get people who are injured benefits, and let’s figure out a way to get them back to work.”
James Case, a Topsham attorney with McTeague Higbee who represents injured workers and is counsel to the Maine AFL-CIO labor union, was in those meetings. He said Cushing’s original bill was a nonstarter with labor. And while Sighinolfi’s new bill jettisons some of what labor had objected to, there are still problems, Case said.
“Sighinolfi’s bill is likewise unacceptable to us,” said Case, “completely unacceptable, frankly.”
The primary changes — and area of contention — have to do with workers who have suffered what’s known as a permanent, partial injury. These aren’t cases where you’ve broken your arm at work and are out on workers’ comp until it heals. Rather, this is where you’ve been injured in such a way that will last forever — a lost limb or a seriously injured back, for example.
The workers’ comp rules and laws are complex but, essentially, guarantee that for anybody within that category of injury, the 25 percent most significant would be eligible for lifetime benefits, while the remaining 75 percent would have a cap — currently at 520 weeks, or 10 years.
It’s a strange part of the law, said Michael Bourque, senior vice president of external affairs at MEMIC. The threshold is set every two years, is always contentious and, depending on the nature of workplaces in Maine from one year to the next, variable. Someone with a certain injury may not qualify for lifetime benefits in one year, but would be able to the following year — with the same injury — depending on how other injuries in the state stood.
“It emerged out of a really hot, burning crucible of reform effort,” said Bourque. “A lot of the reform was good. Sometimes you get what you can. After almost 20 years, I think it’s fair to look back and say ‘this part is crazy.’”
Those permanent, partial injuries are the outliers in Maine’s system — not the norm. For example, in 2010, there were 2,210 overall workers’ comp cases, and the average number of weeks collecting was 12.67. That was down from 7,126 cases in 1993, with an average time of 32.57 weeks.
But those permanent, partial cases are expensive — even in comparison to other states. Bourque noted that Maine’s average costs for those cases are $186,000 per case, including medical costs and wage replacement, while the nationwide average is $89,000.
Sighinolfi’s bill would remove the lifetime benefit for those injuries, capping them at 11.8 years, or 618 weeks. The vast majority of other states have set periods of time, running from a low of 400 weeks to an extreme high of 1,000, Sighinolfi said — though most are in the 450 to 500 week range.
The goal, said Sighinolfi, is to have a definite cap to benefits, so people are motivated to find a line of work they can do, even with the partial, permanent disability. Workers who are deemed totally disabled due to an injury would have no cap. And, if at the end of the 618 weeks of being on workers’ comp, due to a bad economy and other factors, one couldn’t find a job, that worker could ask for a review of the case based on extreme financial hardship, Sighinolfi said.
Putting that cap on benefits is the main problem labor has with the bill — though there are others.
“That is devastating for people with serious, long-term disabilities. They have nowhere to turn to support themselves and their families at that point,” said Case. “These are people who have been out for a work injury for 11 years. They’ve been established [as unable to work] over and over again — you can’t be out that long without being tested.”
People’s conditions tend to deteriorate as they age, rather than get better, Case added.
And while those who are wholly incapacitated would still face no cap, Case said that though the condition being capped is called “partial” incapacity, it basically means everyone.
“Virtually no one is deemed to be medically incapacitated,” he said.
Sighinolfi said there are some people collecting workers’ compensation now who are totally incapacitated. Bourque suggested that if this law were changed, he believed more patients who would today be rated as “partially” incapacitated would instead be given total incapacitation status.
Bourque said he supported the proposal by Sighinolfi.
“Overall we think there’s generally some good thinking here, we think there’s some good policy in it,” said Bourque. “Any way to make the system work better, to have less friction, to have fewer dollars in the system going to attorneys is a good thing. Continuing to find ways to encourage people to get back to work wherever they can is important — that’s something we work on all the time.”
Kevin Gillis, an attorney with Norman Hanson DeTroy, represents mainly employers in workers’ comp cases, and is the executive director of the Workers’ Compensation Coordinating Council, an umbrella group which represents the interests of member employers and insurers. He was part of the stakeholders group, and saw the changes proposed as less a costs issue, and more of an attempt to change provisions that “just don’t make sense and are difficult to administer.”
He noted that it hasn’t been determined yet if these changes would lower or raise premium prices. The National Council on Compensation Insurance will come back with an analysis next week, said Bourque.
All things equal, said Gillis, he thought the proposal made sense.
“Overall, if this were the package, assuming it doesn’t have a major cost effect one way or the other — we think it’s a reasonable sort of package to fix a lot of things,” said Gillis.
The proposal makes other changes. Currently, those collecting workers’ comp get 80 percent of their weekly benefits, capped at $634, which is 90 percent of the statewide weekly average wage, post-tax. The proposal would increase that to 100 percent, raising the weekly payout by $70.
Sighinolfi’s proposal would also reinstitute the automatic right of appeal in workers’ comp cases. Now, they are appealed to the Maine Supreme Judicial Court, and the court can choose whether or not to hear them. They only choose to hear about 4 percent of the cases that are appealed, Sighinolfi said. Under the new system, a board made of hearing officers who were not on the case originally would review the appeal.
Case said labor was happy with some of the changes, including the raising of the weekly collection cap.
“It’s a little bit of saccharine in a cup of very bitter coffee,” he said.
Case noted that workers’ comp premiums charged to Maine employers have gone down 57 percent since 1992. The system works, he said, and the bill is a solution looking for a problem.
“This is much more of a manufactured issue — an issue of opportunity,” said Case.