Vermont House Advances Workers’ Comp Reforms

February 26, 2004

The Vermont House this week gave preliminary approval to a series of measures designed to lower workers’ compensation insurance premiums.

The 101-39 vote came after critics of the bill complained that it would hurt some workers more than it would help any businesses. Backers called the measure a sign of modest progress toward making Vermont more business-friendly.

“It may be a small step, but it is a positive step for the state of Vermont,” Labor and Industry Commissioner Michael Bertrand, the Douglas administration’s point man on the issue, said after the House vote.

The vote to advance the bill also came after the Republicans who control the House beat back three attempts by Democrats and Progressives to amend the bill to remove some of what they saw as its more onerous provisions. Some of the most heated debate had to do with cost-of-living adjustments applied to wage-replacement benefits paid to injured workers. Current law allows the adjustments for all classes of workers’ compensation beneficiaries.

Democrats and Progressives tried but failed to remove a provision from the bill that would deny cost-of-living adjustments to people with permanent partial or temporary total disabilities. Under the law, a person can be deemed to have a temporary total disability — meaning he or she can’t work — for up to six years.

Republican backers of the change acknowledged that it would not have a large impact on workers’ compensation premiums. But Rep. Joyce Errecart, R-Shelburne, who described and defended the bill, said it would send a signal both to the insurance industry and business that Vermont wanted to end its status as an “outlier,” out of the norm among states with its workers’ compensation benefits.

That drew a sharp retort from Rep. Steve Hingtgen, P-Burlington. “Outlier, schmoutlier,” he said. “I don’t want to send a message to the world if it means throwing workers overboard.”

Provisions of the bill, which will move to the Senate after the House gives its final approval, include:

• Changing the maximum duration of temporary total disability benefits from six years to two, but allowing the Department of Labor and Industry to extend the benefits beyond two years in cases in which that is deemed appropriate.

• Making fraud against the workers’ compensation system, whether by workers, employers, health care or vocational rehabilitation provider or insurance company, a felony punishable by a fine of up to $100,000 or three years in prison.

• Setting a cap in weekly wage-replacement benefits of 90 percent of a worker’s weekly wage. Backers of this provision said that under current law, some low-paid workers can make more collecting workers’ compensation than they are paid for working.

• A 10 percent penalty on money that insurance companies must pay a worker if they are more than 21 days late in making the payments.

• Cutting the statute of limitations for filing a workers’ compensation claim from the current six years to three years after the date of the injury.

• Making referrals to vocational rehabilitation less automatic.

• Pardoning companies from paying workers’ compensation benefits for people injured on the premises but while engaged in recreational activities not related to work.

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