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MONTANA SELF INSURERS' ASSOCIATION

MSIA Legislative Update 3/3/2023 - Week 9

  • NCCI Loss Cost Filing – 0.2 % /MSF Board Meetings 3/9 & 3/10 – Rate Setting Decisions
  • Transmittal Week – Either They Pass or They Die
  • HB 719 – Choice of Physician Tabled in Committee
  • SB 310 – Added Cancers for Firefighter Presumptions – Passed
  • SB 369 – Vax Reactions – Amended & Passed
  • HB 490 – IC definition – Amended & Passed
  • HB 678 – Detailed WC Litigation & Contested Cases Changes 

Heard & Failed on House Floor

  • HB 506 – State Coverage Via Plan 1, 2 or 3 – Tabled in Committee
  • HB 636 – Corp Owners/Partners/LLC Members Exemption Level to 10% - Heard & Passed
  • HB 496 – Annual Update to Housing Amounts Included in SAWW 
  • Heard & Indefinitely Postponed 
  • NCCI Loss Cost Filing – 0.2 % / MSF Board Meetings 3/9 & 3/10 – NCCI Loss Cost Filing Rate Setting Decisions


NCCI made a loss cost filing on 2/3 and on it was approved by the State Auditor’s office on 2/8 for an overall average change of -0.2%. The change will go into effect for new and renewal Plan 2 policies effective July 1. The Montana State Fund Board will be holding their March meetings – which typically is their rate setting meeting. The Finance and Audit Committee meeting starts at 9a on 3/9 and they will be taking up the discussion regarding what rate change they will adopt. The full Board will review the Finance and Audit Committee recommendation the following day. You can listen into the MSF Committee and the full Board meeting at, https://www.youtube.com/user/MTStateFund at the appropriate time.


  • Legislative Update


It’s transmittal week. That means that non-revenue and non-appropriation bills not passed through the originating chamber by the end of Transmittal Day – Day 45 of the 90 day session – are dead - ish. As a result, as we reported last week, Transmittal week is always furious, with bills being introduced, heard and decided on in Committee very quickly. 


That was the case with a very important bill – HB 719, which would have reversed the choice of physician back to the employee’s choice. The bill was introduced on Wednesday 2/22, Heard on Friday (night) 2/24 and voted on in Committee after amendments were drafted on Tuesday 2/28. The bill was amended to fix what were glaring errors in the original drafting, and then failed in Committee vote. Procedurally, the Committee voted to Table the bill – which means it is almost totally dead. 


There are different levels of death in the legislative process. Language from a previously dead bill can be amended onto another bill or a dead bill can be ‘blasted’ out of Committee by majority vote from the floor. Then, at the end of session, if the two chambers cannot agree on precisely the same language – they create what is called a Conference Committee appointed by leadership to work out the differences in language. Here’s where it really gets to be fun. Conference Committees can craft any language they want, as long as it is amends the same title as the original bill. So, language that is dead now, may not be dead at the end of the session. 


A long, long time ago, in a galaxy far, far away (Illinois) the Speaker had some of the Conference Committee bills drafted and hidden in his desk drawer, the week the legislature started meeting. Once the Conference Committee was appointed (by leadership) the Speaker pulled out his desired language for final agreement. Montana is not Illinois, but don’t be surprised by anything that happens. Death, in legislative terms, is not permanent until the day after the last day of the session. 


With this report there is a final report on LC titles – only one LC we have been following had language produced. LC 3179 was subject to a special member email as it would have raised benefits from 66 2/3 of AWW to 100 percent. That language was never introduced and it is dead. The other LCs reported on only had titles assigned to them – there was no language produced. With this report, we will no longer be following the LCs because new bills cannot be introduced at this point, unless they are revenue or appropriation bills. 


As well, instead of numerical order, bills are reported on based on perceived level of importance. You will see a number of bills where MSIA does not take a position or is monitoring a bill. In doing so, should the bill be amended to include language which makes other changes to the WC law, MSIA will know and be able to assist in educating legislators on the new issues. 

 


HB 719              Oblander           R – Billings                      The bill would over-turn the 2011 HB 334 changes which gave employers the right to direct medical care through the choice of physician. This bill was the subject of a special MSIA email to members on 2/22. MSIA and individual members contacted individual representatives to kill the bill. As originally drafted, the bill language did not make sense, and an amendment to implement the intent was drafted and adopted. However, the House Human Services Committee, after accepting the amendment, voted the bill down 5 – 16. What is interesting is that all of the D’s voted against this bill – which was not expected. Thank you to all who responded to the special email request for information on the topic, and to those who reached out to members and to representatives directly to help share our perspectives on the issue. Formally, the Committee tabled the bill (almost totally dead) on Tuesday evening 2/28. MSIA, along with members MSBGA, MMIA and MCCF testified in opposition to this bill. 


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 – it pierced the exclusive remedy. This bill has been withdrawn and is completely dead. MSIA opposed this bill.


HB 678              Nicol                   R-Billings                          This bill covers many of the administrative and legal process concerns regarding litigated and complex claims in the system. It is a 25 page bill, and addresses what must be the majority of issues employers, Insurers and defense attorneys have with the current system HB0678.pdf (mt.gov). It will smooth the friction points and eliminate some of the tactic’s plaintiff attorneys have used to delay, confuse and drive up litigated claim costs. In addition to eliminating some penalties and fines, the bill would change the law so that: 

  • Opinions of Treating Physicians are not entitled to deference (new law)
  • Testimony of health care professionals must be weighted based on education, experience and expertise in the medical field in question (new law)
  • Discovery of an IME is limited to their training, educational background, the number of IMEs conducted each year, the number conducted for the individual respondent and how much they received from that respondent. Specifically, discovery of an IMEs personal finances are prohibited (new law)
  • PA’s would be permitted to be treating physicians (116)
  • IMEs would be permitted every 90 days, for changes in condition and new medical causation issues (605); 
  • 608 payments would be reservation of rights payments and eliminate the 30 day limitation
  • Full duty releases would not require the 14 day notice (609)
  • Limitations on what issues are ripe for DOLI emergency orders of continuation of benefit payments (610)
  • Clarification that under 615 an insurer cannot be required to pay indemnity benefits
  • Clarify that subsequent injuries do not qualify for duplicate benefits (703)
  • Clarify that injuries as a result of travel or treatment are not covered by comp (704)
  • Clarify that failure to comply with the selection of a treating physician, or to cooperate with a nurse case manager can result in termination of benefits (1106); and
  • Repeal of a number of potential penalties which can be levied against insurers. 


The bill was heard and passed by the House Business & Labor Committee 10 - 9 on 2/28. The bill failed on the House floor 10 – 90 on 3/2. The bill is near death. MSIA testified in favor of the bill.       


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 will likely be assigned to the House Business & Labor Committee. 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 has been sent to the House where it will likely go to the House Business & Labor Committee. MSIA supports the amended version of the bill.


HB 490              Gist                     R-Great Falls                  This bill was amended to delete the objectionable application of the ABC test for Independent Contractors (IC’s). As a result of the amendment, and retention of the ICEC test for IC status, The bill provides higher penalties for knowingly classifying an employee as an IC. The bill passed the House Business & Labor Committee 19 – 0 and passed the House 93 - 6 on 3/1. It will now likely be assigned to the Senate Business, Labor and Economic Affairs Committee, where based on working with the sponsor on the amendments, MSIA will support the bill. For more details on the ABC test, see the CA Supreme Court Dynamex decision in 2018, S222732.PDF (ca.gov). 


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 now goes to the House for consideration where it will likely be assigned to the House Business & Labor Committee. MSIA supports this bill and testified in favor.


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). 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 now goes to the House where it will likely be assigned to the House Business & Labor Committee. MSIA supports this bill. 


SB 369                Trebas               R – Great Falls                This bill specifically identifies in workers’ compensation statute that an injury or accident covered under the law could include a “serious adverse event” experienced by an employee after receiving a vaccine mandated by the employer. The amendment MSIA worked on with the sponsor deleted the original language which included within the definition of “serious adverse event,” “a congenital anomaly or a birth defect.” In requiring that the adverse reaction be a “serious adverse event,” the bill may create a higher standard than currently exists. The bill passed the Senate on 3/2 by a vote of 47 – 3. It will now go over to the House for consideration. MSIA testified in opposition to the bill and in support of the amendment. With the adoption of the amendment, MSIA no longer opposes the 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 supported this bill. The bill is being prepared to be sent to the Governor who is expected to sign it. 


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, itdo es not require a workers’ compensation claim be made by the employer. The bill was passed by the House Business & Labor Committee on 2/28 19 – 0 and was passed by the House on 3/3 by a vote of 92 - 6. 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 introduced, heard and passed the Committee last week. The bill passed the House on 3/2 by a vote of 96 - 3. MSIA is monitoring this bill.  


HB 636               J. Kassmier        R-Bozeman                     This bill would reduce the corporate officer/owner threshold for WC coverage exemption from 20% ownership of the business to 10%. The bill passed the House on 3/2 by a vote of 96 - 3. MSIA is monitoring this bill. 


SB 496                S. O’Brien       D – Missoula                   This bill requires an annual update to the housing amounts used for remuneration inclusion, if housing is provided as part of wages. The bill was heard and passed in Committee this week and postponed indefinitely (really dead) on 3/2 by a vote of 34 – 16. MSIA was monitoring this bill.


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 and will be sent to the Senate. MSIA did not take a position on this bill and supported the amendment. 

 

LC3179               Harvey               D-Butte                         This bill draft was the subject of an MSIA email on January 18 to membership and will not be introduced. The 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. 


HB 506              Nicol                   R-Billings                        This bill 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). 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. The bill was heard in the House Business & Labor Committee on 2/23. A number of business and labor organizations testified against the bill – claiming it will weaken the financial security of MSF, should the state move to either a self insurance program or a Plan 2 policy. The bill was tabled by the committee on 2/27 18 – 0. MSIA did not take a position on the bill.

             

LC 679                Nicol                   R-Billings                        Revise workers' compensation laws related to illegal aliens. There is no language to this bill title and it will not be introduced.


LC 1724              A. Olsen            D-Missoula                   Provide worker right to choose physician in workers' compensation case. There is no language associated with this bill and it will not be introduced. Representative Olsen has either sponsored or supported this kind of proposal in the past and it is a Democratic leadership supported proposal. 


LC 1728              A. Olsen             D-Missoula                    Establishes presumption in workers' compensation for COVID-19. There is no language associated with this bill and it will not be introduced. Representative Olsen has either sponsored or supported this kind of proposal in the past and it is a Democratic leadership supported proposal. 


See you next week!