Join Now Members Only
MONTANA SELF INSURERS' ASSOCIATION

MSIA Legislative Update 2/03/2023 – Week 6

  • Legislative Update
  • HB 451 Introduced – No Exclusive Remedy for Vax Injuries
  • LC 3153 – ABC Test for IC Status Draft Released
  • NCCI Prices LC 3179 – Increase Ind Benefits to 100% AWW
  • SB 22 ICEC Test Agreement
  • SB 260 UTPA Changes Heard in Sen Committee
  • HB 178 Passes Sen Committee
  • Last Chance to Register for 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. 

This has been another week of limited formal action, but you can tell things are beginning to heat up, with the release of some ‘interesting’ draft bills. MSIA worked on SB 260, which had a hearing this week and has a greater understanding of what it means for self-insurers. Together with SB 165, which we worked on last week, there will be stronger statutory limitations to bringing actions against self-insurers alleging poor claims handling. 

As is often the case, some of our activities are reported below and some are not ready for prime time yet. With the legislative deadlines for requesting bills and transmittal date coming into focus, the session ‘vibe’ is getting more serious. We see that in the release of two bills, HB 451 and LC 3153, both by Representative Gist (R-Great Falls) which could have significant impacts on our system. MSIA is trying to work with Representative Gist to understand his concerns and help craft solutions. We also continue to work on business bills – such as HB 453 (LC 4025) proposing Human Rights Bureau reforms, (and subject of an MSIA membership email early this week), SB 241, which is a violence against health care workers proposal and HB 379 proposing amendments to the MT PBM law. 


HB 451               Gist                     R-Great Falls                   This bill would permit any worker who was required to be vaccinated as part of their employment, if the employer accepted any state or federal funds, to bring suit against their employer. The language specifically creates an exception to the workers’ compensation exclusive remedy law for this action. The language applies to any vaccine, not just COVID. Clearly this is aimed at health care employers. Representative Gist has listed his occupation as an RN. MSIA opposes this bill and will work to kill it. 


LC 3153              Gist                     R-Great Falls                  This bill has not been introduced. This draft language would prohibit an employer from hiring an unregistered independent contractor (IC), hiring an IC whose has a suspended, revoked or has been denied an independent contractors exemption certificate (ICEC), permits the IC to work outside the scope of the IC registration or misclassify an employee as an IC. The bill provides significant penalties for violations. Finally, the bill throws out the ICEC system, for construction only, and requires an ABC test for IC status. The ABC test is part of the CA Supreme Court Dynamex decision in in 2018 S222732.PDF (ca.gov). In simple terms, this bill, even with the limitation to construction, will significantly alter the IC approach Montana has had in place since the early 2000’s. MSIA will oppose this kind of change to the law and will work with others to defeat it. 


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. The current language proposes to increase indemnity benefits from 66.66% of weekly wage to 100% (subject to state average weekly wage maximum). NCCI has produced a pricing memo (attached) identifying that this change to the law would result in an increase of between 11.8% and 15.3% when it went into effect. The Department of Insurance and the Department of Labor are aware of the NCCI memo. MSIA has also communicated with business interests about this language. MSIA will work to make sure this bill in either the current (or potential language)to provide as much in wage loss benefits as take home pay will not 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. 


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 (LC 3153, above, would end that system). 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. The amendment was adopted and the bill passed the Senate Business, Labor and Economic Affairs Committee 2/10/2023 10 – 0. With this change, MSIA will support this bill.


SB 260               D Salomon        R-Ronan                          This bill would change the Unfair Trade Practices Act (UTPA) in the insurance law 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). The bill was heard in Senate Business, Labor and Economic Affairs Committee on Thursday 2/9 and was supported by the Montana Chamber of Commerce, the MT Captive Insurers Association and the Insurance Department. No one opposed the bill. MSIA will support this bill as we have created legislative intent through the sponsors’ testimony that captive insurance is a form of self-insurance and the UTPA would not apply to either. Together with SB 165, below, the UTPA will be strengthened to limit actions against self-insurers that are permitted under current law. MSIA can now be supportive of this bill.          


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. The bill passed Senate Committee without change 10 – 0. The bill is expected to pass the full Senate and is expected to be signed by the Governor. 


The following bills have not seen action this week. 


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. 


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 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. 


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. 


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 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 677              Nicol                   R-Billings                         This bill has not been introduced. 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.


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 on January 20 to provide public policy direction to the staff on this proposal. For the first time, they publically 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.


  • Last Chance Practicalities-and-Pitfalls-of-the-MSA-Process – MSIA CE Webinar 2/16/2023 


Have you reserved your seat yet? 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!