A Maine joint legislative committee voted earlier this week to endorse a workers' compensation reform bill designed to significantly increase indemnity benefits for injured workers. The bill has now been sent to the flooras part of an omnibus bill that includes about two dozen legislative reforms for workers' comp in the state.
The bill passed by the committee along party lines would, among other things, raise the maximum weekly workers' comp benefit, reinstate a cost-of-living adjustment for those on long-term benefits, and increase benefits to workers with partial disabilities.
Supporters of these proposed reforms say the system has become unfair and instead favors employers and their insurance companies. John Rohde, the recently installed Executive Director of the Maine Workers' Compensation Board, estimates the bill would increase the cost of workers' comp insurance by around 4 percent. Business groups and other opponents are highly critical of that projection. They say no actuaries were used to create that estimation and that it is “impossible to accurately predict what the cost increase will be, because proposed changes to the system are likely to have compounding effects that are not fully understood.”
Supporters of the bill believe it will “go a long way toward reinstating certain key rights for injured workers that were taken away during a previous reform effort in the early 1990's.” Matt Schlobohm, Executive Director of the Maine AFL-CIO was quoted as saying, “There's a real opportunity to restore some balance and fairness to this system.”
One persons' fairness is another person's failure, and by referencing the early 1990's, proponents of change are signaling that they may not fully understand the world they are striving to restore.
In the early nineties, the Maine workers' compensation system was broken. It was, by many professional descriptions, in a full-fledged crisis. Almost all insurance companies had stopped writing coverage in the state, the benefits system was out of control, and the state's economy was in peril as a result. Dramatic reforms in 1992 reversed that situation, to the point where in recent years Maine has been viewed as having one of the more stable comp systems in the nation.
Certainly, adequate benefits for injured workers is an important topic that should be reviewed in numerous states. While Maine indemnity benefits are lower than many of their northeast region neighbors, they are by no means the lowest in the nation. It could easily be argued that Massachusetts significantly higher benefit levels are simply representative of the cost of living in that state; Maine is not nearly as wealthy a state, and the benefit levels should be commensurate for that economic reality.
The greater concern, however, is that while the Maine system may not be broken, a new Governor and legislature are bound and determined to fix it nonetheless.
By working to reinstate “certain key rights for injured workers,” the state would be wise to not also reinstate the issues that existed during the time period they reference. Workers' comp is an incredibly complex machine, and legislatures seem to be constantly trying to strike a perfect equilibrium; a balance that they will never actually achieve. Why they want to dramatically overhaul an otherwise stable system is a mystery – but that is politics as they say.
If the Maine legislature and proponents of change fail to understand their own history, it is entirely possible that, with reforms, they will be doomed to repeat it.
Robert Wilson is President & CEO of WorkersCompensation.com, and "From Bob's Cluttered Desk" comes his (often incoherent) thoughts, ramblings, observations and rants - often on workers' comp or employment issues, but occasionally not.
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