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MONTANA SELF INSURERS' ASSOCIATION

MSIA Legislative Update 2/03/2023 – Week 5

  • Legislative Update
  • HB 178 Heard in Sen Committee
  • SB 165 Common Law Bad Faith Changes
  • HB 313 – PA Independent Practice Bill
  • LC 986/SB 267 – MSF IT and Procurement Changes Introduced
  • LC 4327/SB 260 UTPA Changes Introduced


  • Registration Closes 2/14 for MSIA Webinar Practicalities-and-Pitfalls-of-the-MSA-Process - 2/16/2023 

Sponsored by Ritsema Law and MES Solutions

  • Legislative Update        


Bills that have been formally introduced have either a House Bill (HB) or Senate Bill (SB) number. Bills that have been requested and/or drafted but not yet introduced are assigned a Legislative Counsel (LC) number. Not all LC bills are introduced. 

With this report, the bills or draft language where there has been a change are reported first then those where there is no status change are reported. 

In terms of formal action this has been a light week. However, often during a legislative session, the real work happens in the hallways, private meetings and discussions about alternatives to language proposed. That’s what this week was all about. MSIA has been involved with discussions regarding independent contractors (SB 22), common law bad faith (SB 165), permitting PA’s to practice independently (HB 313) and changes to the Unfair Trade Practices Act LC 4327/SB 260), as it relates to specific mention of self insurance. Some of our activities are reported below, some are not quite ready for prime time yet. In addition, as part of the Montana business community, MSIA is involved, although not taking a public position on products liability reform (SB 216)to provide additional protections for retailers and others, and has shared some legislative language with specific members regarding proposals that may have a direct impact on their business. 


HB 178               K. Walsh           R-Twin Bridges              This bill clarifies that injuries which occur off the clock and as the result of social or recreational activity on the employer’s premises are not compensable. The bill defines that a social or recreational activity is one that includes exercise, pleasure, relaxation or voluntary, optional preparation related to the employment. For example, should a ski area or golf course employee injure themselves while skiing or golfing off the clock during a work day, they would not be covered by WC in that specific instance. MSIA testified in support of this bill in the Senate Business, Labor & Economic Affairs Committee on 1/31/23. There were no opponents at the hearing. The bill passed the House Business & Labor Committee 18-1 and passed the full House 79 – 20 on 1/23. This bill is expected to pass the Committee and the full Senate and is expected to be signed by the Governor. 


HB 313               Etchart             R-Billings                          This bill would permit Physician Assistants (PA’s) to have an independent practice. Under current law, PA’s must work under a supervising physician. The bill was heard in House Business & Labor Committee on Friday 2/3. Proponents included the MT Association of Physician Assistants, the Health Policy Advisor to Governor Gianforte, Blue Cross/Blue Shield, the MT Association of Nurse Anesthetists and individual PA’s. Opponents included the MT Medical Association (MMA), the MT Nurses Association and individual physicians and a medical student. While this bill does not have a direct impact on WC, it is not a big leap to assume that PA’s will want treating physician status under the WC law. These actions are happening around the country and we would be surprised not to see at least a proposal here. MMA provided an amendatory proposal based on current UT law, which would allow PA’s to have independent practice, after an addition 10,000 hours (5 years) of practice experience. MSIA has not taken a position on this bill at this time. 


SB 22                  Morigeau          D-Missoula                    This bill is the clean-up of the attempt last session to require the Department of Labor to do more investigation regarding an independent contractor or employee designation rather than rely solely on the presence, or absence, of an ICEC. This was negotiated through the Economic Affairs Interim Committee and the language at that time, was acceptable. The Senate Business, Labor & Economic Affairs Committee heard the bill on 1/19/2023 where it became evident more work on bill language is necessary. This week there was a fair amount of work done to respect the system Montana has to determine independent contractor status – which is typically more robust than other states. The current draft amendment language would hold someone without an Independent Contractor Exemption Certificate (ICEC) is presumed to be an independent contractor, unless the ICEC is forged or otherwise fraudulent, or the ICEC expired within 120 days while working with that contractor. With this change, MSIA can support the bill.


SB 165                Usher                 R-Billings                          This bill requires first and third party claimants against insurers to provide information and cooperate with an insurers’ claims adjudication process in a timely manner and provides insurers an affirmative defense if they do not. In addition, it amends the Unfair Trade Practices Act (UTPA) so that third party claimants would no longer have a common law bad faith action opportunity against insurers, as created in the BREWINGTON v EMPLOYERS FIRE INS C :: 1999 :: Montana Supreme Court Decision. Under the current law, first party claimants (your insured) have a private right of action against their insurer, should the company not deal in good faith in adjudicating the claim. Third party claimants, under this proposal, would specifically have the same rights, and be limited to those rights. The bill was heard by the Senate Business, Labor & Economic Affairs Committee on Thursday 2/2/2023. MSIA supports this bill and testified in favor. 


LC 4327/SB 260 D Salomon        R-Ronan                          This bill would change the Unfair Trade Practices Act (UTPA) so that the independent cause of action section of the UTPA claims practices clause does not apply to a captive insurance company (but does apply to captive risk retention groups). Currently the language of 33-18-242 (8) specifically includes self insurance as being covered under the law. However, self insurance is not defined in the insurance code. A Supreme Court decision, Dannels v BNSF (Dannels v. BNSF :: 2021 :: Montana Supreme Court Decision) specifically addressed the application of the unfair claims practices application and the private right of action to both captives and self-insurers (see Justice Sandifur’s consent). This is a complicated issue and whether self-insurers without definition are part of the current law or not. One of the questions as well, is whether eliminating the reference, since there is no definition makes a difference or not. As currently drafted, the bill eliminates the reference and proposes only that the act does not apply to captive insurers. MSIA is working on this bill with business interests and the State Auditor’s Office.          


LC 986/SB 267  Hertz                  R-Polson                         This bill seems to be the compromise language for those who cannot support what are expected to be the LC 985 Proposals (see below). This language would provide MSF the same exemptions from the IT law that the Department of Justice, Secretary of State, the University System and the Office of Public Instruction have. The language also provides the state fund the same state procurement process exemption for purchases under $250,000 that the state lottery system currently has. MSIA does not have a position on this language at this time.  (See also LC 985 below).


LC 677              Nicol                   R-Billings                         The draft language released would permit the state of Montana to choose WC coverage from Plan 1 (self insurance), Plan 2 (commercial coverage) or continue, as is statutorily required, with Plan 3 (MSF). Revise workers’ compensation laws to provide freedom of competition. The language does not include a proposal for a residual market mechanism as was speculated. There are details regarding allowing MSF to continue to provide coverage for themselves, should the state choose a Plan 2 carrier and to permit MSF to act as a third party administrator (TPA) should the state choose to become self insured. MSIA will be monitoring this bill.


The following bills have not seen action this week. 


SB 126               Hertz                  R-Polson                        This bill re-pays the Montana State Fund those monies taken during the 2017 Special Session to replenish the Fire Fighters funds, and adds interest since that time. This bill was heard in Senate Finance and Claims Committee on Thursday 1/12 with the D’s not buying the need to restore the funds and the more conservative R’s not accepting the financial need for this either. There appears to be no clear leadership position on the legislation as yet. MSIA is watching this bill progress and does not have a position at this time. 


HB 277                Nicol                   R-Billings                       As drafted this bill would end the MSF payments to the State Auditor’s Office (SAO) to staff two FTE. In the 2015 session, as part of the agreement that the state fund would be regulated by the Commissioner of Securities and Insurance (SAO), that office estimated the need for two additional FTE to regulate MSF. As part of the agreement to pass SB 123 at that time, MSF was required to pay for those FTE, which has been done by intra-agency transfer since then. This bill, as currently drafted, would stop MSF from paying for those FTE. This bill was the subject to a hearing on Friday, 1/27 and was opposed by the State Auditor’s Office who pointed out that the staffing continues to be needed and the funding will be provided through a reduction in general revenue funds or continue to be paid by this inter-agency transfer. MSIA is not taking a position on this language. 


LC 84                  R. Lynch             D-Butte                          This bill has not yet been introduced. This language would add ovarian and testicular cancers to the list of presumptive illnesses covered for firefighters. MSIA opposes this bill. 


LC 679                Nicol                   R-Billings                        Revise workers' compensation laws related to illegal aliens. There is no language to this bill title as yet.

LC 985                Hertz                  R-Polson                          There is no language associated with this bill yet. However, MSF is drafting language which would allow it to become a policyholder owned not-for-profit mutual insurance company which retained the responsibility for the market of last resort. The MSF Board of Directors met in a Special Meeting today, January 20, to provide public policy direction to the staff on this proposal. For the first time, they publicly agreed to move forward with this kind of a proposal, in addition to seeking the state’s re-payment of the funds used to balance the firefighting budget in 2017 (see SB 126 below) and require the state to provide the funding for the actuarial estimates of costs for the Old Fund liabilities, currently estimated at between $35 - $50 million. One of the sticking points is how to deal with current MSF employees – the discussion is to permit them to have a choice of staying in the state of Montana systems and benefits or to begin work within the new company. Those employees who choose to stay would then be leased or somehow assigned to the new company and would retain state benefits. These kind of proposals have been successful in other states. MSIA will be monitoring this bill until language is generated. 


LC 1724              A. Olsen            D-Missoula                   Provide worker right to choose physician in workers' compensation case. There is no language associated with this bill yet. Representative Olsen has either sponsored or supported this kind of proposal in the past and it is a Democratic leadership supported proposal. MSIA will oppose changing the current law regarding choice of physician. 


LC 1728              A. Olsen             D-Missoula                   Establishes presumption in workers' compensation for COVID-19. There is no language associated with this bill as yet. Representative Olsen has either sponsored or supported this kind of proposal in the past and it is a Democratic leadership supported proposal. MSIA will oppose changing the current law regarding presumptions for injuries or illnesses.


LC3179               Harvey               D-Butte                         This bill draft was the subject of an MSIA email on January 18 to membership. This bill has not yet been introduced. In speaking with Representative Harvey, the draft requestor, he appreciates that this language does not meet his goals, as it will provide someone who gets hurt more money than if they were working. However, he promises it will be introduced and his goal is to provide those who are hurt at work, the same level of money as if they were working. In response to our comment about incentives to return to work, the Representative felt employers could do more to incentivize people to get back to work and there are employments which provide this now (Representative Harvey is a Butte firefighter and their contract provide full pay when people are injured at work between the workers’ compensation system and an employer payment). The current language proposes to increase indemnity benefits from 66.66% of weekly wage to 100% (subject to state average weekly wage maximum). MSIA has contacted NCCI, Department of Insurance, the Department of Labor to help determine the potential impact of the original draft language. MSIA has also communicated with business interests about this language. MSIA does not believe this bill in either the original nor the expressed language will get beyond a hearing in committee, should it be introduced. MSIA will oppose this kind of change to the law and will work with others to defeat it. 



  • Registration Closes 2/14 - MSIA Webinar Practicalities-and-Pitfalls-of-the-MSA-Process - 2/16/2023 


Have you reserved your seat yet? In simple terms, if you are on this email Update List, your organization is entitled to unlimited seats to any MSIA CE Webinar. Advance registration is required and registration for this Webinar closes 2/14! 

Practicalities-and-Pitfalls-of-the-MSA-Process, presented by Paul Sighinolfi, Senior Managing Director at Ametros, is on February 16, starting at 10a MST. This Webinar has been approved for one CE credit through the MT Department of Labor. Advance registration is required, contact the MSIA office to register or go online at Practicalities-and-Pitfalls-of-the-MSA-Process. 

Registration closes on 2/14 – Don’t Miss Out!

This Webinar is sponsored by   Ritsema Law - contact Danielle Vukonich danielle.vukonich@ritsemalaw.com or at 406-471-4757

And

MES Solutions - contact Tyler Catalano tyler.catalano@mesgroup.com or at 206-291-6656

This is an interactive webinar session – your participation, questions and input is requested! 

Contact the MSIA office to reserve your seats or register online at Practicalities-and-Pitfalls-of-the-MSA-Process. Registration closes 2/14.


See you next week!