The Iowa House and Senate could debate a bill to decimate our state's workers' compensation system as early as today.
For background on this chapter in the Republican war on workers, see the last section of this post. A House Democratic staff analysis (enclosed in full below) explains how House File 518 and its companion Senate File 435 would alter current law, all to the benefit of employers and to the detriment of those hurt on the job.
Other Iowans made powerful cases against this remarkably cruel proposal last week. I transcribed five people's testimony from a 90-minute public hearing on March 7, as well as Democratic State Representative Scott Ourth's remarks during a House Commerce subcommittee meeting on the bill.
Doug Collins, injured worker
One of the most significant changes would force workers to prove that activity on the job was "the predominant factor" rather than a "material contributing factor" to an injury. Attorney Dennis McElwain warned in a column for the Sioux City Journal that the bill
raises the burden of proof, making it harder if not impossible for an employee with a pre-existing condition to prove her injury is a cause of disability. For over 70 years, the law stated clearly that if a pre-existing condition “was aggravated, accelerated, worsened or 'lighted up’ by the injury” you were covered under workers’ compensation. (Rose v. John Deere Co., Iowa Supreme Court, 1956). The new law would overrule this basic principle. Now, the vast majority of currently legitimate injury claims will be denied, shifting the burden of expense onto you, your group insurance, or Medicaid and Social Security disability programs.
Doug Collins explained at the public hearing how this change would have affected him (starting around the 21:30 mark of this video).
Good evening. Thank you for hearing me. Currently I am a part-time pastor in Sioux City, Iowa. I originally started off here in Des Moines. At the age of about 14 years old, I was in a bicycle accident here in town. Over the next three years, had a couple of knee surgeries that were pretty minor in scope, and I believe that I survived those pretty well. So over the course of the next 25 years, there wasn't a whole lot of change in my activity, there weren't doctor's visits, there was not a need for me to have any kind of specialized care.
I went to work for a bakery in Sioux City, and after seven years of working there without incident, they changed the type of work that I did, in the sense that they gave me about half as much time to do my job. I pushed around 900-pound racks that were on wheels that were full of baked product and I loaded them onto trucks.
Immediately after the change took place, I had a conversation with my supervisor about the fact that I was having changes, I was having pain, I was having new problems that I'd never had before, and the company chose not to do anything with that.
Over the course of time, for about a year, I continued to have problems. I went back to my employer and talked to them, and at this point in time they sent me to a doctor and I began a process that involved eventually a partial knee replacement.
I'm talking to you about this today because under the proposed changes, my pre-existing condition from 25 years prior would have precluded--I would not have had the coverage for the injury that happened at work. I was forced to work after that point because I had no other recourse. Over the course of about a year and a half, I went to having a little bit of change in my knee to being down to bone on bone. There was no choice but to do a partial knee replacement. [...]
Dr. John Kuhnlein, occupational health physician
Kuhnlein's statement at the public hearing began shortly after the 34:00 mark.
Thank you for the opportunity to speak with you this evening. I'm Dr. John Kuhnlein. I'm a specialist in occupational and environmental medicine. I've been active in practice for over 27 years now, many of those years in Iowa. I see Iowan cases for both sides and speak at attorney seminars for both claimant and defense in Iowa. I have experience in different state workers' compensation systems.
The Iowa system we have in place today is not perfect. No system is perfect. The system is overall reasonably fair to either side, regardless of what you might hear from others. One sign to me that the system treats both sides equally is that I hear complaints from both defense and claimant counsel about how they both think the system is biased against them, and sometimes about the same claim.
I urge you not to pass these bills. These bills would make Iowa's system inherently unfair and biased against the injured worker. In the end these bills have a significant probability of cost-shifting away from the workers' compensation system, where it belongs, to the public that would pay for work-related medical care for denied work injuries.
These injuries will not go away. When a claim is denied, as these bills make it easier to do, and with little penalty, the individual will still need medical care. If the employer is absolved from providing care, and the injured worker cannot pay for medical care themselves, then the larger health care system itself must pay for that care, in the form of public assistance or disability benefits. In essence, the cost for workers' compensation claims are shifted from the employer to the individual worker or to society as a whole, when the injured worker cannot pay for medical care.
These bills will create a wide swing in the system in future years, I believe. The Iowa workers' compensation system does not need wide swings of what is and is not considered work-related at the time. [...] In the past, regardless of whether Republicans or Democrats have been in power, our system has been relatively apolitical. The end result will change now if these bills are put into place, I believe. The changes postulated here will not hold. When the Democrats are in power, something will be work-related. When Republicans are in power, something will not be work-related. Because these bills have been proposed unilaterally, without input from all parties to reach consensus. Such radical swings would not be good for the system or stability in the long run.
These bills have the potential to create long-term harm to the Iowa workers' compensation system, and I urge you not to pass them as currently written. Changes may be necessary to the system, but they need to be met bilaterally. Thank you for your time.
Beth Walker, attorney
Walker began speaking around the 46:00 mark:
Hi, my name is Beth Walker, I'm an attorney here in Ankeny, and our office represents small businesses and people, some of whom are injured workers.
The Iowa workers' compensation bill was originally passed in 1913 after much debate and research. There was an agreement made, a moral and written contract, in which injured workers gave up their right to sue an employer for negligence, and to receive compensation for pain and suffering for injuries. In exchange, employers agreed to provide benefits under the workers' comp system.
Since this bill first was introduced just one week ago [on February 27], we have heard a lot of rhetoric about frivolous claims and who is to blame for alleged increasing insurance premiums, but we have not seen any facts to support these claims. It is your choice to just believe what you hear, or to look at the facts and decide for yourself. You don't have to take my word for it, because everything I'm about to tell you is in the packets that I've started handing out.
Number 1: Iowa's grade for insurance regulation is an "A," ranked third overall in the nation. Specifically, Iowa was found to have low politicization, [good] fiscal efficiency, and workers' comp market competitiveness.
Second, we have heard that premiums are out of control. However, Iowa is right in the middle of the 50 states at 24th in the nation. We're in the same category as our neighboring states of South Dakota and Nebraska, Minnesota and Missouri, and we have lower premiums than Wisconsin and Illinois. Overall workers' compensation premiums are below their highs in 1994, and have only increased slightly more than inflation in recent years, mostly because of increases in medical care costs, which have increased around 3 percent per year during the past ten years.
Why are premiums higher than they used to be compared to other states? This is because there has been a race to the bottom in states like Texas and Oklahoma, where their workers' compensation system still costs employers money but pays very little compensation to injured workers. As shown by the National Council of Compensation Insurance, who sets the rates in Iowa based upon the facts, our rates from 2013 to current have been very stable, with some years going up and some years going down.
In fact, for 2017 there's a rate decrease of 4.7 percent, which is the biggest decrease in modern times [...]. Once again, as shown by the NCCI, since 2007 the number of claims have been consistently declining. Declining claims, declining costs and insurance premiums which are similar to or less than the rest of the Midwest is evidence that there is no crisis. If this bill passes in its current form, then those who support it will be declaring that they value profits over people and fiction over fact.
Please review the handouts I've provided for the facts to support what I've stated, and please vote no for this bill.
Note: this analysis by the Iowa Association of Justice includes graphs and figures backing up Walker's testimony: "Average premium costs in Iowa’s workers’ compensation system are low, and are some of the steadiest rates in the nation."
Kent Sovern, state director for the AARP
Section 9 of House File 518 and Senate File 435 would change Iowa Code language on "permanent total disability." McElwain put it this way:
If a work injury leaves you totally disabled, weekly benefits end at age 67, even if you’re totally disabled for life. If you suffer an injury after you reach 67, you will not draw benefits for more than 150 weeks, even if you’re totally disabled for life. So, if a 66-1/2 year-old construction worker falls through a roof, and is now left quadriplegic for life, he will receive weekly benefits for six months, not a nickel more. If he’d waited and had the injury at age 67, he would receive weekly benefits for 150 weeks.
That blatantly unfair proposal got the attention of the AARP, one of Iowa's largest advocacy organizations. Picking up at the public hearing around the 56:30 mark:
Mr. Chair, members of the committee, my name is Kent Sovern. I am the state director of AARP in Iowa. AARP is a social mission organization with about 380,000 members [in Iowa]. AARP registered as "undecided" on the bill; however, we absolutely oppose the age-based eligibility provisions that are contained in this bill.
AARP does not typically weigh in on things like workers' compensation legislation, what with so many other critical issues affecting Americans [aged] 50-plus. The AARP policy book only briefly addresses workers' comp. However, our policy is clear and contains some critical guiding principles that apply to House File 518.
Quote: Workers who suffer an occupational injury or illness should be eligible for full workers' compensation benefits, regardless of age or eligibility for Social Security retirement benefits, close quote.
This guiding principle is why the AARP opposes the age-based language in House File 518 on pages 5 and 6, which effectively terminate workers' compensation benefits solely because an Iowa worker turns to the age of 67. Today, tomorrow, and every day for the next ten years, 10,000 Americans turn 65. Unlike our parents, we do not see this mid-60s threshold benchmark as significant to our work lives. Where our parents may have looked at the 65 threshold as a point to be free from work, this generation--including me--increasingly expects to be free to work as we move forward into our 60s, our 70s, and beyond.
According to the Bureau of Labor Statistics, about 91,000 Iowans over the age of 65 [were] fully employed in the workforce in 2014. That's about 18 percent of the 65-plus [population]. That's a substantial increase from just a few years ago. Working older Iowans continue to add value to their employers, to their community, to the economy, well beyond the mid-60s. We call this "the longevity economy." This trend is expected to continue so that by 2020, an estimated 25.6 percent of Iowa workers 65-plus will be fully employed, and a vital, necessary part of the workforce if Iowa is to be competitive.
Reducing or eliminating workers' compensation benefits solely because individuals are 67 runs counter to Iowa principles. I thank you all, and I urge you to strike this discriminatory age-based language from the bill.
Marlon Mormann, former administrative law judge
If Mormann's name sounds familiar, it's because he made news when he retired as an administrative law judge in early 2015. At that time, Mormann said Iowa Workforce Development leaders had burdened judges with heavy caseloads and pressured them to favor employers in their handling of unemployment benefits cases. His testimony at the March 7 public hearing began around the 1:27:00 mark.
My name is Marlon Mormann. I'm a Republican, and I oppose this bill.
I started out doing workers' compensation law in 1986 for a company called IBP [Iowa Beef Packers], Inc. Everybody hated IBP at that time, but it was extraordinarily efficient and knew how to cut costs by administering the program properly.
I hear a lot of talk about how horrible the system is, the bad decisions by deputies. Well, you know, I guess you could blame it on me too, because I spent nine years as a deputy workers' compensation commissioner also.
I know this system inside and out. This law is not right. It is not ready. This should be studied, it should be worked. There's a lot of things that need to be done, but this is the wrong way to go about it.
For four years when I was at IBP, every legislative session I worked with a gentleman named Don Hauser [longtime lobbyist for the Iowa Association of Business and Industry]. Some of you may remember Don. He was a real hard-charger. [...] I warned him over and over again, I said, "Don, you make a change in workers' compensation law, and it will have a cascade effect if you don't know what you're doing."
That's what's going on in this thing. You'll have a cascade of negative consequences, that just about can't be stopped. Think about shoulder injury. If you have a shoulder injury, and it goes scheduled member [under the proposed bill]. Now, the burden [for shoulder injuries] shifts over to the Second Injury Fund. Now you have a horde of Second Injury Fund cases. Where does the cost go for Second Injury Fund? It comes from insurance companies. It does not come from self-insurers.
This is an anti-Republican bill. Republicans do not want the private sector--excuse me, want tax dollars going to the private sector to subsidize work injuries. The cost should go where it should go. It should be stuck with the private sector. And what this is is a burden shifting. It shifts the cost to taxpayers, it shifts it to insurance companies. I think this is wrong.
I've heard a lot of talk about the costs, the horrible increase in costs, horrible decisions. Here's the cost numbers. 2004: $1.91 per hundred. 2006: $1.75 per hundred, which is the lowest. 2016: $1.86. It's been flat. I wish Obamacare was this efficient. Good grief, we've seen 20 to 70 percent increases in premiums for Obamacare, and we have this that goes from a low of $1.75 to a high of $1.91 over the last twelve years?
This system is not broken. It needs correction, there are things that could be done, that need to be studied. But coming in and doing this wholesale is a subsidy for self-insurers. It is a burden-shifting. It is shifting the costs to the taxpayer. It is shifting costs to insurance companies.
Now, having said that, there's plenty that needs to be done. I spoke with former Workers' Compensation Commissioner Michael Trier, a friend of mine. And he wrote a letter to the editor, and I'm going to read one paragraph:
"Balance is important, and parts of HSB 169 [the former name of HF 518] deserve consideration. But other parts, including those that reduce benefits for permanent partial disability and end benefits at arbitrary ages, should be summarily rejected. Iowa should treat all citizens fairly, and kicking those who are down is not a solution."
I'm in total agreement with Mr. Trier. I'm in frequent agreement with John Kuhnlein. And, you know, this is just not ready. There hasn't been enough--it's a product of special interests, it's the opposite of what the Republican Party should stand for.
Donald Trump says we're the new party of the working class. We should not be putting a knife in the back of the working class. Things need to be done, there's work that needs to be done on this. This is way too soon, it's going way too fast, and it's special interests gone wrong.
Note: I was unable to find a list of companies belonging to the Iowa Self-Insurers Association. Todd Beresford, that trade group's current president, is a senior manager at W.C. Tyson Foods, a major meat processing company. Speaking at the March 7 public hearing in support of the bill (starting around 48:30), Beresford said his association represents around 25 large self-insured employers that collectively employ about 100,000 workers, along with another 30 corporate members that are not self-insurers.
State Representative Scott Ourth, union member and affected worker
Ourth was the only Democrat on the Iowa House Commerce subcommittee that took up the workers' compensation bill on March 1. Republicans Gary Carlson and Peter Cownie echoed business talking points about "abuse" of the system and the need for "balance" as they fast-tracked the far-reaching legislation.
Ourth explained his stance as follows (audio courtesy of Radio Iowa, beginning around the 55:00 mark).
Thank you, Mr. Chair. For those of you who do not know me, this business right here is kind of a costume I have to wear when I am serving as a legislator, which now I am doing in my fifth year, and it's a great honor to have been elected by the folks back home.
But when I'm not in this General Assembly, gentlemen, I'm a member of Operating Engineers Local 234. I suit up with my PPE [Personal Protective Equipment] on every day, just like you do. I've been on pipeline jobs, wind turbine jobs. The bridges you folks drive over every day without ever thinking about the safety of those bridges or highways or all the other things, were put together and built by these people and me. We work in rain, and mud, and 115-degree heat. We show up every single day for work and put in 12- and 13-hour days.
This last summer, I worked 42 days straight with no day off. And that's not because my union said I had to do that. That's because, that's what my company demanded of us. And we've stood up, and we did it. We work tired, we work hot, we work sore, and we work stiff. And we're proud of it.
I'm gonna tell you something. This used to be a worker-friendly state, but in the last four weeks, I've watched that go down the tubes. I would not encourage anyone in the Building Trades Union, of which I proudly serve, to come to the state of Iowa now. I'd encourage them to go to another place, where they'll be taken care of if they get hurt. And trust me: when you drive around on all these bridges, and all the nice things we've done, putting those things together, lifting that steel, getting that concrete just right, all that heavy equipment, moving all around and up and down, people get hurt, and they get hurt badly, through no fault of their own.
Now, I'm the Iowan that this legislation is hurting. This is my family we're talking about. This is personal to me. And I'm having a hard time with it. Because the friends--and I call them friends--who have drafted and conceived this bill, are willing, should I be injured in a crushing injury or something like that, should I rendered completely and permanently disabled at age 58, which I am now, by some mishap in my workplace, that is of no fault of mine, that at age 67 my friends in here are willing to turn their back on me and walk away. Nice knowing you, Scotty. Good luck.
You have the gall to talk about the sanctity of life. Don't do that with me anymore if you're gonna pass this bill, because that flies in the face of any language regarding your valuing me. It's obvious to me now that my work has no value, you don't give it a second thought. Moreover, it's obvious to me that my health and well-being don't mean very much to you either, and that saddens me greatly.
So I will not sign the bill. And if I have to, I'll look for work in another state, a state that values me, and values my work, and cares what happens to me, and is willing to catch me and pick me up, should something bad happen to me.
I challenge anyone who has drafted this bill, or who is in favor of it, sitting in your air-conditioned offices, doing the things you do, to job-shadow me for six weeks before you pass this bill. Come out with me and do what I do to build the great state of Iowa and to make it the great place it is. Job-shadow me for six weeks, and I guarantee you, your perspective on this bill will change dramatically.
Thank you for letting me have my say, sir.
Iowa House and Senate Republican leaders are considering amendments before sending the workers' compensation bill to Governor Terry Branstad.
At a March 11 public forum in Waukee, State Senator Charles Schneider, an attorney and the Senate majority whip, said three areas of the bill have consistently come up in his conversations: language making it harder for workers to be compensated for shoulder injuries (included in the bill as an apparent gift to the meatpacking industry); changing the burden of proof required to show that an injury qualifies for workers' compensation; and setting 67 as the maximum age for workers' compensation benefits. Schneider said he supports revisions to all three of those areas.
Iowans would be better off if more Republican lawmakers approached the issue like State Representative Rob Taylor. Answering the same question at the Waukee forum, Taylor kept it short and sweet: "I'm going to be very simple: I'm a no on the bill."
Top image: Injured worker Doug Collins testifies during a March 7 public hearing on House File 518
here is a website with a list of all self-insured employers in the state
I wonder which of those are part of this association and which are not. Only about 25-30 self-insuring companies are members, according to Beresford.