Resolution Opposing a Federal Commission on State Workers' Compensation Laws Exposed

The Resolution Opposing a Federal Commission on State Workers' Compensation Laws was approved by ALEC's Commerce, Insurance, and Economic Development Task Force on July 16, 2009, approved by the ALEC Board of Directors on August 27, 2009. ALEC has attempted to distance itself from this piece of legislation after the launch of ALECexposed.org in 2011, but it has done nothing to get it repealed in the states where it previously pushed for it to be made into law.

ALEC Resolution Text

BACKGROUND

On January 22, 2009, U.S. Congressman Joseph Baca (D-California) introduced HR 635, which would authorize the establishment of a National Commission on State Workers Compensation Laws. The proposal would give the commission the responsibility of examining state laws to determine if they provide an adequate, prompt, and equitable system of compensation and medical care for injury or death arising out of and in the course of employment. A similar commission was authorized with members appointed by President Nixon in 1971. The commission made broad recommendations in 1972 that included higher disability benefits, compulsory coverage, and unlimited medical care and rehabilitation benefits. However, the Commission avoided critical areas on which there was no consensus, with significant cost impact, such as compensating permanent partial disability. As a result, states adopting many of these recommendations incorporated significant cost drivers into their systems, without countervailing utilization controls, sowing the seeds for excessive costs and the workers' compensation financial crisis of the late 1980s and early 1990s.

A number of significant workers compensation reforms have been enacted by the states in the 37 years since the 1972 Commission issued its report. State workers compensation programs have greatly improved through the use of managed care processes, treatment guidelines and stronger fraud provisions. The legislation, as drafted, fails to acknowledge these fundamental improvements, and implies that major problems currently exist in many state workers compensation programs.

PROPOSED ALEC RESOLUTION

SUMMARY

A resolution opposing federal legislative efforts to empower the government to establish a national commission to review and evaluate state workers' compensation laws.

WHEREAS, the American Legislative Exchange Council (ALEC) supports state workers' compensation laws that provide an injured worker with all reasonable and necessary medical treatment, of the nature and intensity to promote expeditious healing and return to work, and a fair level of income benefits during disability, providing protection against lost wages, while encouraging return to work, all at a cost affordable to employers.

WHEREAS, ALEC believes the state-based workers' compensation system has proven over the near-century of its existence to constitute an effective means of protecting injured workers against the costs of industrial injury, and protecting employers against the unlimited and unpredictable costs of workplace liability. A state-based benefit delivery system reflects the nature and cost of employment in individual states and is an exemplar of the federal system, in which power is dispersed among the states, thereby facilitating timely response and ability to tailor remedies to state-specific conditions.

WHEREAS, ALEC opposes the imposition of federal oversight and development of federal mandates on the state workers' compensation system. Federal requirements on the state-based system would create unnecessary imbalances and unintended consequences for a system that has been operating effectively for decades.

WHEREAS, ALEC opposes legislation that would unnecessarily increase the federal bureaucracy and create federal regulation in an area where states are currently providing adequate oversight.

WHEREAS, ALEC supports a state workers' compensation system, its administration, legal precedents, funding and fiscal accountability, which is intricately linked to each state's economy. The state-based system provides the ability to experiment creatively and borrow from experiences in other states without the burden of a rigid, nationwide, one-size-fits-all federal program that is without the burden of a rigid, nationwide, one-size-fits-all federal program that is slow to change and administratively cumbersome.

WHEREAS, ALEC supports the rights of states and their respective legislatures and stakeholders to review the performance of state-based workers' compensation systems. It is not the province of Congress to interfere with the state administration of workers' compensation.

THEREFORE BE IT RESOLVED, the American Legislative Exchange Council (ALEC) reiterates its support for the state-based workers' compensation system and opposition to legislation that would lead to broadening the federal role in that system; and

BE IT FURTHER RESOLVED that ALEC opposes H.R. 635, legislation establishing a National Commission on State Workers' Compensation Laws, because that evaluation is intended to, and will assuredly, lead to recommendations inimical to the independence of the state-based workers' compensation benefit delivery system. These recommendations will seek to impose federal benefit delivery system rules which Congress will be expected to approve – rules that inherently will interfere with state benefit systems, increase system costs nationwide, and frustrate efforts of the states to contain costs.

Approved by the Commerce, Insurance, and Economic Development Task Force on July 16, 2009.

Approved by the ALEC Board of Directors on August 27, 2009.