NFIB lays out 2020 Legislative Priorities
It’s no secret: the past few years, Alaska lawmakers have struggled to pass any kind of legislation that benefits small business. The debate over the size of the annual PFD has sucked up all the oxygen in Juneau, making it difficult for lawmakers to get anything else done. While politicians remain deadlocked, small business owners across the state are suffering. We all know that Alaska is an expensive place to do business. Before the 2020 legislative session kicks off tomorrow, NFIB is asking lawmakers this year to rise above the debate surrounding the permanent fund dividend and begin considering meaningful reforms that will benefit small business. Alaska small business owners, backed by NFIB, urge lawmakers to begin work on long overdue reform to Alaska’s broken worker’s comp system. Thor Stacey, NFIB’s state director in Alaska, says the move would ensure job creation and investment in small businesses across the state, promoting expansion and a vibrant business community.
We need Worker’s Compensation reform now. According to the National Academy of Social Insurance, Alaska consistently ranks amount the highest states for the average cost of Worker’s Compensation insurance. There is a very significant reason for this: Alaska also has one of the highest medical costs in the country. On average, medical care costs make up about 58% of employee benefits. In Alaska, that cost rockets to 72%. While Alaska lawmakers can’t do much to control the high cost of health care in the state, they can institute reforms to how medical treatment is given to injured workers. “Let’s face it, once an injured worker is the system, medical providers have almost what amounts to a blank check as they prescribe a variety of treatments. Alaska lawmakers have the power to pass legislation that ensures those injured workers get cost effective treatment that is prescribed in accordance to proven medical protocols,” says Thor Stacey, NFIB state director in Alaska. Requiring “outcome-based treatment guidelines” would be solid reform measure that has been proven to save a significant amount of money to worker’s compensation programs in other states.
As of today, when a worker is injured and requires re-training to get back in the work force, the workers compensation program pays that injured worker in cash. SB 112, a bill introduced in 2018, would change the vocational rehab payout to a voucher system. This reform ensures that the benefit is being used to re-train workers and not a cash benefit under the auspices of re-training. The numbers were pretty staggering, less than 20% the workers who accepted the vocational rehabilitation benefit actually got retrained.
Unfortunately, SB 112 died after opposition from organized labor over other reforms were included in the legislation, such as capping attorney fees. The bill never made it out of the Senate Finance Committee, even after the sponsor offered to strip it down to only include two major reforms addressing medical treatment guidelines and vocational rehab.
NFIB is asking lawmakers to narrow their focus to worker’s compensation benefits reform and at a minimum, address the largest cost driver to the program: medical treatment to injured workers. “Not only will that substantive worker’s compensation reform benefit small businesses across the state, but there will be similar benefits to the largest industries in the state such as seafood and tourism, and in the public sector as well. After all, the state’s single largest employer is the state of Alaska. The time to update Alaska’s expensive and outdated worker’s compensation program is now,” says Stacey.
