Vermont Workers’ Comp Changes Reduce Savings

April 7, 2004

A Vermont state Senate panel is putting the final touches on a bill designed to lower workers’ compensation insurance costs, as business lobbyists complained the measure would raise them instead.

The Senate Committee on Economic Development, Housing and General Affairs has made several changes in the House-passed reforms to the system that provides wage-replacement and medical benefits to injured workers.

Labor and Industry Commissioner Michael Bertrand said that several changes made by the Senate were positive, but on balance the Senate version would undermine the overall goal of lowering workers’ compensation costs.

“The House passed a modest bill that would save some money for employers,” Bertrand said. With the Senate version, “we’ve lost the impact of a lot of those cost savings.”

Sen. James Greenwood, R-Essex-Orleans and chairman of the committee, acknowledged that the bill “doesn’t save as much as I would like to see,” but he said changes designed to limit medical costs would help.

In one change, the Senate committee maintained the House’s call for a prison term of up to three years for those caught committing workers’ compensation fraud, but it increased the maximum fine from $10,000 to $100,000.

The Senate committee’s bill, which the panel is expected to vote on this week, includes other changes as well:

• It would aim to bring the amounts paid to doctors and hospitals, which now are 90 percent of “usual and customary” charges, down to the 68 to 75 percent paid by other insurers, Greenwood said. Backers of this provision point to studies indicating that up to a third of the recent sharp increases in workers’ compensation premiums are tied to rising medical costs.

• It would reverse the House move to take annual cost-of-living adjustments away from workers who are classified as having a temporary total disability. Both the House and Senate would maintain the inflation adjustments for workers who are permanently disabled and for the survivors of workers killed on the job.

• One provision that Greenwood described as a key change was a section of the bill governing workers’ compensation for sole proprietors — often construction workers or loggers. These people often work under contract for other businesses, but when they’re hurt on the job, they are covered as if they were employees. The provision would limit such coverage to contractors working directly under and only for a single company.

• The Senate version would allow workers, in addition to filing a compensation claim, to bring a separate lawsuit against an employer if the employer was particularly irresponsible about workplace safety. Bertrand said he worried that this provision would not lower workers’ comp costs, but could increase liability insurance rates for businesses.

Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Topics Workers' Compensation

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