STAND. COM. REP. NO. 433-04

Honolulu, Hawaii

, 2004

RE: H.B. No. 1776

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Labor and Public Employment, to which was referred H.B. No. 1776 entitled:

"A BILL FOR AN ACT RELATING TO WORKERS' COMPENSATION,"

begs leave to report as follows:

The purpose of this bill is to appropriate funds for fiscal year 2004-2005 for the purchase and installation of computers and software to process workers' compensation claims in the State of Hawaii.

However, your Committee determined that this bill would better serve as a vehicle for an omnibus bill proposed by the Administration and intended to reform Hawaii's workers' compensation system. This bill, H.B. No. 2486, contains nine separate components pertaining to:

(1) Managed care and limits on palliative care;

(2) Exemptions for limited liability corporations, limited liability partnerships, partnerships, and sole proprietorships;

(3) "Maximum medical improvement" and limits on coverage;

(4) Mental stress claims;

(5) Employer-designated health care providers;

(6) Emergency care;

(7) Vocational rehabilitation;

(8) Arbitration; and

(9) Fraud.

To facilitate the thorough review of each of these components, a proposed house draft of H.B. No. 1776, in which the original contents were deleted and new language pertaining to the vocational rehabilitation component of H.B. No. 2486 was inserted, was heard for purposes of receiving testimony and public comment.

The proposed draft:

(1) Prohibits a vocational rehabilitation plan from including vocational rehabilitation that requires vocational or academic instruction, permitting the employee to become self-employed;

(2) Prohibits extensions of plans for vocational rehabilitation from being implemented without a performance review by the employer, attending physician, and vocational rehabilitation plan counselor; and

(3) Provide that an employee's refusal to accept a rehabilitation plan terminates compensation for temporary total disability.

The Department of Labor and Industrial Relations, Department of Human Resources Development, Chamber of Commerce of Hawaii, Hawaii Independent Insurance Agents Association, Hawaii Employers' Mutual Insurance Company, ALTRES, Inc., and an individual submitted testimony in support of this bill. ILWU Local 142, UPW, Hawaii International Brotherhood of Electrical Workers, Hawaii State AFL-CIO, Hawaii Psychological Association, Consumer Lawyers of Hawaii, Rehabilitation Association of Hawaii, Hawaii Rehabilitation Counseling Association, and concerned attorneys, certified rehabilitation counselors, clinical psychologists, and citizens opposed this bill. The Hawaii Chapter of the American Physical Therapy Association submitted comments.

After careful consideration, your Committee has deleted the contents of the proposed draft and inserted the substantive provisions of the proposed draft offered for H.B. No. 1775, and made additional substantive revisions. As amended, this bill:

(1) Clarifies that payment of benefits under the Workers' Compensation Law shall be terminated if maximum medical improvement is reached, or when the period of benefits reaches the maximum medical improvement limit;

(2) Authorizing the Director of Labor and Industrial Relations (Director) to continue benefits beyond the maximum medical improvement limit after a hearing find that maximum medical improvement has not been achieved;

(3) Sets the initial maximum medical improvement limit at 156 weeks and require the Director to annually revise the limit based on actuarial evaluations of all workers' compensation claims so that 90 percent of all claims during the next year would be expected to fall within this time period;

(4) Allows an employee to seek tort remedies if the employee has reached the maximum medical improvement limit, and the payment of all benefits authorized under the Workers' Compensation Law has been terminated or the injury results from sexual harassment or sexual assault;

(5) Defines "maximum medical improvement"; and

(6) Makes technical, nonsubstantive changes for purposes of clarity, style, and conformity.

As affirmed by the record of votes of the members of your Committee on Labor and Public Employment that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1776, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1776, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Labor and Public Employment,

 

____________________________

MARCUS R. OSHIRO, Chair