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MONTANA SELF INSURERS' ASSOCIATION

MSIA Legislative Update 3/24/23 - Week 11

  • Legislative Action – Nearing Transmittal Deadline for Appropriations or Revenue Bills
  • New Bill HB 896 – MSF Premium Tax & Residual Market Mechanism                                   
  • LC 3945 – Terminate State Fund
  • SB 260 - Common Law Third Party Actions
  • HB 313 - PA’s Independent Practice
  • SB 22 – Independent Contractors
  • HB 490 – Penalties for Improper IC Classification
  • HB 702 – State Paying for Learning Opportunities
  • HB 836 & SB 165 Hearings Scheduled      
  • HB 178 – Signed – Now Law - No Coverage for On Premises, Off Duty Injuries 
  • Legislative Action 


The next transmittal date is coming closer, and again, you can feel the change in the air in the Capitol. This transmittal date is for appropriations and revenue bills. March 3 was transmittal date for all non-monetary bills – those bills which did not clear their original chamber by that date were dead(ish). They could be amended to include either an appropriation or a revenue stream and continue to live, but in fairness, that is not very common. After that date, only monetary bills are permitted to be introduced – and their transmittal date is Friday, April 7. For the most part, bills have to be through their originating committee by the end of next week to continue to be alive. There are alternatives, but that is the standard. A later hearing date is an indication that the fix is in – either for or against the proposal. 


As a result, we’ve seen some new language and new bill introductions. Two state fund bills, one which looks like a carry-over from the 2017 session, LC 3945, has not yet been introduced. This language would eliminate ,the state fund and create an assigned risk pool – it also turns MSF assets over to be used for other purposes. HB 896 (Nicol, R-Billings) provides a 2.75% premium tax on state fund policies, purports to maintain state fund and create an assigned risk plan. MSIA is not likely to take a position on either bill as they do not directly impact our ability to transact business, nor affect the operations of the workers’ compensation system. However, they will garner attention and generate interest – as they have in the past when they have been brought up.


Never consider a bill dead – really dead - until the day after the legislature goes home. As a result, we will continue to monitor all the legislation previously reported. When there is action, or a change, we will update the report. Otherwise, if the bill is not reported on, nothing has happened since the last report. 



SB 310                Small                  R-Busby                           This bill adds ovarian and testicular cancers to the list of presumptive illnesses covered for firefighters. This bill has the Support of leadership and we were told it will pass and we can expect it to be signed by the Governor. The bill passed the Senate on 2/28 by a vote of 34 – 16, with mostly the more conservative members voting against. It is set for hearing in House Business & Labor Committee on 4/3. MSIA opposed this bill but did not testify. 


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 in addition to relying on the presence, or absence, of an ICEC. The bill has been amended so that someone who presents 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 amended bill passed final reading in the Senate 48 – 0 on 2/16. The bill was heard in House Business & Labor Committee on 3/23 then passed the Committee on 3/24 by a vote of 17 - 0. MSIA supports the bill and it is expected to pass and be signed into law.


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 passed final reading in the Senate 34-14 along party lines on 2/16. The bill has been set for a hearing in the House Business & Labor Committee on 3/30. MSIA supports 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 Sandifurs’ consent). Together with SB 165, above, the UTPA will be strengthened to limit actions against self-insurers that are permitted under current law. The bill passed final reading in the Senate 46 – 4 on 2/14. The bill had a hearing on 3/21 and passed the House Business & Labor Committee 19 - 0. MSIA supports this bill and it is expected to pass and be signed into law. 


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 supported this bill. The bill was signed by the Governor on 3/23 and became law today, 3/24. 


HB 590              Buttrey             R – Great Falls                This bill requires health care employers to report incidents of violence against health care workers. Unlike the Senate Version (SB 241, which was withdrawn by the sponsor, it does not require a workers’ compensation claim be made by the employer. The bill is set for hearing in front of the Senate Business, Labor and Economic Affairs Committee on 4/5. With the change from the Senate version, MSIA did not take a position on this bill. 


HB 702             Harvey               D – Butte                         This bill repeals the sunset provision of the 2019 law that has the state reimburse employers for increased workers’ compensation cost for being involved in certain work-based learning programs. The bill was heard on 3/24 by the Senate Business, Labor & Economic Affairs Committee. MSIA is monitoring this bill and it is expected to pass and be signed.  


HB 313               Etchart             R-Billings                          This bill, as amended, would permit Physician Assistants (PA’s) with a minimum of 6000 hours (3 years) of experience to have an independent practice. Under current law, PA’s must work under a supervising physician. The bill passed the House on 2/28 by a vote of 92 – 6. This bill was heard by the Senate Business, Labor & Economic Affairs Committee on 3/22. MSIA can support the amended version of the bill and it is expected to pass and be signed. 


HB 836               K. Zolnikov        R-Billings                        This bill is an MSF idea to create a ‘regulatory sandbox’ to allow for additional, limited experimentation within the marketplace. The idea is to permit new ideas that do not fit within the regulatory scheme to have some freedom to betested out, within a somewhat controlled environment. The bill permits these experiments as long as there is a written business plan, no negative impacts to consumers and no negative impacts to the financial solvency of the insurance carrier and it would be limited to 10,000 policyholders. An ‘innovation waiver’ from regulation for a period of up to three years would be provided and reporting would be required, and it only applies to property and casualty insurance. MSF reports they would like to see how it might be applied to return to work and safety programs in workers’ compensation. The bill is set for hearing by the House Business & Labor Committee on 3/27. Despite the insurance code not applying to self-insurers, within the context of return to work and safety programs, MSIA can support the proposal. 


HB 896/LC 680 Nicol                 R-Billings                          This bill was introduced today and based on the coming deadlines, is likely to have a hearing next week in front of the House Business & Labor Committee. The bill provides a 2.75% premium tax on MSF policies (the same level premium tax on Plan 2 policies). While it appears the intent is to allow MSF to continue to exist, there may be a drafting error as the language also eliminates MSF and creates an assigned risk pool. Governor Schweitzer vetoed an MSF premium tax bill in 2013. Since then although I do not recall it being introduced, if it had been proposed, it never made it far in the legislative process. MSIA will be monitoring this bill. 


LC3945               Nicol                   R- Billings                         Rumor has it that Representative Nicol will not carrying this bill, although she requested it. It seems Senator Carl Glimm (R-Kila) will be the lead sponsor. As of now, it has not been formally introduced, but is expected to be. The language appears to be a carry-over from 2017. As a result, some of the language laying out the rationale for the bill is inaccurate and will generate discussion if it is not addressed. The bill eliminates MSF and creates an assigned risk pool and turns MSF assets over to be used for other purposes. The bill is supported by those who question why the state is competing with private carriers. However, the replacement of MSF language is complicated, makes assumptions that may not be accurate, and if experience from other states has any credibility, small employers will see a WC coverage rate increase if it becomes law. NCCI loss costs/rates rates in other state residual market systems are 20 – 160% higher than the voluntary market and the vast majority of policies are small business. MSIA will be monitoring this bill, if it is introduced.


See you next week!