Just Compensation



After decades of neglect, lawmakers rethink workers comp

Doug Wagner is a friendly guy, polite to reporters, prompt about returning phone calls. He is also about as conservative as Montana politicians get.

Back in the early '90s, the representative from Hungry Horse was among those who supported massive cuts to the state's workers compensation laws, shifting the burden for workplace injuries from the ledgers of companies to the checkbooks of their employees. Now, a decade after the Legislature embarked on the project of recasting the system along more business-friendly lines, Wagner is among those who says lawmakers have gone too far.

"Workers comp is based on a promise that I won't sue you if I'm injured on the job, but you need to make me whole," he says. "I don't want to see us go back in the red, but employees are not supposed to have to pay this. It worries me that some changes we've made … were made at the expense of employees."

Two injuries made Wagner change his mind. The first was his own. A millwright for Plum Creek Timber Company, Wagner tore a ligament in his index finger back in 1992. When he failed to heal completely, he had to argue to get reconstructive surgery. "I could live with the injury but it grew more and more aggravating over the years," he says. "But when I originally brought up getting it fixed, I was told I had waited too long."

Then, a friend suffered a heart attack on the job and was denied benefits-a scenario state labor organizers say is all too common. "The burden is on the worker to prove the majority of the reason for the heart attack was the job," says AFL-CIO director Don Judge. For Wagner's friend, the burden of proof was too heavy.

"He's never going to work again," Wagner says. "His earnings are over but his bills aren't. His wife's going back to school so she can support the family. Did we overreact? I think maybe we did."

While Wagner suspects the current system is out of balance, others are dead sure of it.

A veteran of state politics, Judge is a de facto historian for Montana's workers compensation system. The current imbroglio began in the 1980s, he says, when the State Fund-the public workers comp insurer for many Montana businesses-was looking at a $400 million deficit.

Judge describes what happened next, in the name of balancing the books, as "dramatic and draconian," turning "what started out as a decent law into the piece of crap we have today."

"There was a period of time during the '80s when the political powers artificially held down the rate increases that would have been necessary for the books to balance, rather than charging employers a sufficient amount to cover the benefits coming out the other end," Judge says. "Why? Because it was politically unpopular to raise taxes during the Reagan years. By the time we began discussion of the whole issue, the deficit was in the $400 million range."

The solution was threefold: separate the "old" State Fund from the "new" State Fund; enact payroll taxes on both employers and employees to pay for the old fund; cut benefits and limit access to the workers comp system.

While these steps worked-the old fund has been paid off, the new fund is solvent-the changes disproportionately affected minimum wage workers and young people, Judge says. For one thing, the new law requires that an injured worker be able to show a wage loss in order to get rehabilitation paid for. Since minimum wage earners can't earn less than minimum wage, there's no loss.

Judge gives an example of how this might play out in reality: take a high school student working the fast food circuit who gets burned by a french fryer.

"For one thing, this kid cannot access rehabilitation benefits because he cannot show a wage loss," he says. "Second, there's no secondary medical care. ... To that young high school student, our obligation as an insurer is simply to patch you back up again so you can get back to the workplace at the same level of wages you were at when injured."

It takes a good half hour for Judge to run through all the cuts made to the workers comp laws during the 1990s; the AFL-CIO is working with a number of Democratic legislators to patch up some of the more egregious damage. Missoula Representative Carolyn Squires, along with Representative David Ewer and Senator Sue Bartlett, both of Helena, requested a slew of bills that would help restore some balance to the system.

Ewer has proposed four weeks of job protection for injured workers and limits on the type of medical information an insurance company can have access to. Squire's bills deal with restoring access to rehabilitation and upping benefits for "permanent partial" and "temporary total" disabilities. And Bartlett's measures would require insurance companies to pay attorneys fees and travel costs in certain instances.

While Judge says there's bipartisan support for the vaguely defined idea of "restoring balance," these changes would likely boost premiums and erode popularity for specific bills.

"We know these proposals all have merit, and there is some support for bringing the system back into balance," he says. "But none would bring back the glory of the '80s."


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