7/7/99
mbrown@agate.net
It wasn't long ago, in fact during the John McKernan Administration, that Maine had the unenviable reputation of the highest worker's comp costs in the nation.
The costs were a wet millstone around new state businesses or expansion and a bonanza to lawyers specializing in worker's comp cases. In 1991 information I requested and received from the Maine Bureau of Insurance showed that the law firm of McTeague, Higbee and Libner were involved in 20% of comp cases. The next highest law firm, Hardy, Wolf & Downing, was only at 5%.
At that time the Bureau said that worker's comp attorney fees were $4.9 million for employee attorneys and $2.1 million for employer attorneys. However, the Bureau contact, Eric Cioppa, said, "that number underestimates the actual amount substantially since the best evidence is that lawyers get about $60 million annually."
Maine's outrageous comp costs was factually identified in "John Burton's Monitor Interstate Comparison of Worker's Compensation Benefits and Costs: An Update." The report stated that for total benefits per 100,000 covered workers Maine's percentage of the U.S. average cost was 308.6%. Oregon was the second most costly state with 202%. But Maine had consistently been 33% above the national average with cash (indemnity) benefits in 1990 of $80,407,511.
One of the persons who began to turn worker's comp around was Susan Collins who was then Gov. John McKernan's Commissioner of the Dept. of Professional and Financial Regulation. McKernan called worker's comp the state's "black hole," a system designed to serve the injured on the job but only returned 40 cents on the dollar to them.
McKernan named Collins his task force chair on worker's comp. Collins had been incensed by the abuses of the system. She cited several examples such as a comp recipient who also was working as a Maine Guide.
Other cases: A recipient's wage loss was less than $2,000, the medical bills were $5,700 and the attorney fees were $10,300.
- An employee was out on comp for a minor back injury. He was caught stealing money, was confronted and quit. However, since he was on light duty at the time he was caught stealing, the Worker's Comp Commission (WCC) said that he must still get his benefits.
- A teacher developed "writer's cramp." She stated that her hand would not hold a pencil and that just thinking about writing caused her hand immobilization. The WCC awarded benefits because it could not be proven that it didn't.
- One worker filed 36 claims filing a claim for every part of his body. He goes back to work, then re-injures himself and goes back on benefits.
- In spite of a fellow employee's sworn testimony that the worker injured himself by jumping from a window in his girlfriend's house, the WCC believed the testimony of the girlfriend that this didn't happen and he was awarded comp benefits for an unwitnessed injury the worker claimed happened at work.
- An employee was found to be totally disabled but the WCC permitted him to box and the employee subsequently won several boxing awards.
Collins task force wrote a new worker's comp bill that did not please Charles J. O'Leary then president of the Maine AFL-CIO. He said ,"This bill is neither a reform nor a compromise. Rather it is the dictate of the McKernan Administration and the insurance industry.
The bill set the stage for the so-called "state shutdown" and McKernan and the Senate Republicans got the blame for it for refusing to back down to the unions. However, in subsequent years many attempts to change worker's comp laws continued.
In the 119th Legislature's first session just completed there were 32 worker's comp bills. Twenty-eight were filed by Democrats and four by Republicans. Pamela Hatch D-Skowhegan and House chair of the Labor Committee filed 15 of these bills.
Only eight worker's comp bills were passed into public law. One specifies that all persons engaged in harvesting forestry products are "employees" under worker's comp law except a person who obtains a certificate of independent status.
Another eliminates the requirement that the Employment Rehabilitation Fund reimburse employers and insurers for benefits paid to employees pursuant to the benefits adjustment for partial incapacity for injuries occurring on or after January 1, 2000.
Another adds one auditor and two paralegal positions to the Worker's Compensation Board and increases the assessment limit of the board from $6.6 million to $6.735 million in order to allow sufficient funding levels for the new positions.
Another provides funds to pay the cost of an interpreter for employees who are not fluent in English. And still another repeals the law that reduces death benefits payable to dependents of employees who die due to workplace injuries when those dependents are aliens who live outside the United States or Canada. This change is effective retroactive to June 1, 1999.
Perhaps in some future time John McKernan will not be so harshly blamed for "shutting down" the state. His steadfast worker's comp reforms have helped the Maine business community far more than a few day's shutdown of state's services. If George W. Bush becomes the next president Jock McKernan may get that recognition - a cabinet appointment.
Susan Collins perceptive work on Maine comp reforms seems to be forgotten but her rewards are now the United States Senate - and that ain't bad for a girl from Caribou , Maine.
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