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WORKERS' COMPENSATION BOARD
Board of Directors’ Meeting
November 3, 2004

A meeting of the Maine Workers’ Compensation Board of Directors was held on Wednesday, November 3, 2004 at the Board's Central Office (located on the AMHI Grounds, Deering Building, Room 170). Chairman Dionne called the meeting to order at 10:19 a.m.

ROLL CALL

PRESENT: Paul Dionne, Anthony Monfiletto, Joan Kirkpatrick, Rodney Hiltz (via telephone),
Gary Koocher, John Cooney and James Mingo.

MINUTES

Gary Koocher MOVED TO APPROVE THE MINUTES OF THE OCTOBER 19, 2004 MEETING; Anthony Monfiletto seconded. MOTION PASSES 7-0.

SUBCOMMITTEE REPORTS

  1. Personnel Subcommittee: Personnel Subcommittee Member G.Koocher informed the Board that he and Director A.Monfiletto, who attended the meeting on behalf of Director Hiltz, met with Board staff this morning to discuss the Assistant General Counsel position that will become vacant on 1-1-05 (when T.Collier begins his new position as a Hearing Officer at the Board’s Portland office). Director Koocher stated Board staff will be interviewing prospective candidates in the very near future to begin the process of filling the position.
  2. Budget Subcommittee: Budget Subcommittee Member J.Cooney reported that he and Director J.Kirkpatrick met with Board staff prior to today’s board meeting to deliberate on the draft assessment legislation the Board received at its 10-19-04 meeting and reported the Subcommittee has asked Chairman Dionne to discuss the draft proposal with Governor Baldacci and his Cabinet members when he meets with the group on 11-5-04.

EXECUTIVE DIRECTOR REPORT

  1. Safety Grant: Executive Director P.Dionne informed directors that the Board has received a $2,000 Safety Grant, which the Board will use to study what improvements, if any, should be made at the Board’s offices to ensure that its employees are working in a safe and secure environment. Mr. Dionne further noted that some of the grant monies will be used to issue an RFP to receive bids from companies interested in conducting the safety study and providing the Board with a final report on its findings and recommendations.
Discussion (Safety Grant Monies):
Directors and Staff discussed the costs of any changes made at the Board’s Central office being shared with the Maine Department of Agriculture, which occupies the second, third and fourth floors of the Deering building; the Grant monies assisting the Board in providing its employees with a safe environment in which to work; the possibility of a study of the Board’s offices exceeding the $2,000 grant and the Consultant’s report and recommendations being reviewed with the Board of Directors prior to any changes being implemented.
  1. Actuarial Study (Study of Benefits Paid Under39-A M.R.S.A. §§212 and 213): Staff advised directors that the deadline for actuarial firms to submit bids on conducting a review of the cases paid under Sections 212 and 213 has passed and that the Board has received four bids, ranging from $13,000 - $46,000, in response to the RFP. The Sec. 213 RFP Committee presented the Board with the interview questions the Committee has used in the past and advised directors that the Committee will be interviewing the four actuarial firms on 11-22-04. Directors were then instructed to contact S.Minkowsky on or before 11-16-04 (the date of the next board meeting) if they would like to recommend any changes to the questionnaire sheet.
Discussion:
Directors and Staff discussed Board members contacting S.Minkowsky at their earliest convenience to discuss the draft interview questions (Mr. Minkowsky asked directors to contact him by 11-16-04 so that he can provide the Board with a final draft of the questions); whether Board members have any objections to the Sec. 213 RFP Committee conducting interviews both in-person and over the telephone if one of the actuarial firms is unable to attend an in-person interview (no objections voiced); finalizing the interview questions at the next board meeting, which is scheduled for the 16th of November at the Board’s regional office in Augusta and asking the same question of each interviewee to maintain the integrity of the interview and selection process.
  1. IME Committee (Applications Received From Medical Providers Interesting in Performing Sec. 213 Independent Medical Examinations): Directors were advised that IME Subcommittee Members J.Kirkpatrick and J.Mingo will be meeting with Board staff at 1 o’clock this afternoon to review applications received from two physicians that are interested in performing independent medical examinations for the Board under Sec. 312. Staff reported that IME Committee Members J.Kirkpatrick and J.Mingo will then discuss the physician’s qualifications and the group’s recommendations with their respective Caucus members prior to the group presenting its recommendation to the Board. Director Hiltz asked IME Subcommittee Member J.Kirkpatrick to call him this afternoon to discuss the matter.
  2. Cases Referred to the Maine Bureau of Insurance: Directors were advised that the Maine Bureau of Insurance has concluded its investigation with respect to the Board’s referral of a complaint against Hanover Insurance Company for questionable claims handling practices and were also informed that the Board recently filed another complaint with the Bureau involving claims handling practices of Gates McDonald. In closing, Mr. Minkowsky reported the Hanover audit was successful by the Bureau of Insurance and that Hanover Insurance Company is a success story for Board compliance.
  3. IAIABC’s Upcoming Two-Day Meeting: After advising directors of his recent meetings with Technology Officer P.Fortier regarding the problems West Virginia has had with using IAIABC’s newest electronic data interchange program and of IAIABC’s plans to hold a two-day meeting in the very near future to address those problems and other issues involving its newest EDI program, Chairman Dionne informed the Board that IAIABC has extended an invitation to P.Fortier to attend a meeting at their office in Madison, Wisconsin on the new electronic data interchange program. Mr. Dionne, prior to concluding his EDI update, noted Board approval is needed for all out-of-state travel.
Discussion:
Directors and Staff discussed the estimated cost of sending the Board’s Technology Officer to the two-day meeting being approximately $750.00 and the Executive Director’s recent meetings with P.Fortier regarding IAIABC’s new electronic data interchange program (known as Release 3). James Mingo MOVED TO APPROVE THE OUT-OF-STATE TRAVEL COSTS FOR THE BOARD’S TECHNOLOGY OFFICER TO ATTEND A TWO-DAY MEETING IN MADISON, WISCONSIN ON IAIABC’S RELEASE III ELECTRONIC DATA INTERCHANGE PROGRAM; Joan Kirkpatrick seconded. MOTION PASSES 7-0.
  1. Mandatory Electronic Filings After January 1, 2005: Directors received copies of Waivers received from AIG Claim Services, Guard Insurance Group/Gallaher-Bassett, ESIS, Inc., St. Paul Companies/Travelers, and Liberty Mutual Insurance Company. Staff advised directors that the entities are seeking an extension of time in which to comply with the Board’s filing requirements that goes into effect on 1-5-05 for First Report of Injury forms (Form WCB-1). Directors agreed to grant the requests for the timeframes recommended by Board staff.
Discussion:
Directors and Staff discussed Attorney J.Lambert’s comments (Mr. Lambert, on behalf of his client, expressed his gratitude to Technology Officer P.Fortier who has been very cooperative and helpful in assisting his client with the encrypting problems they are experiencing as a result of their migration to the Board’s electronic data interchange program); Board Staff also working with other entities, such as Bank North and BIW on developing a process to preserve the confidentialityof information transferred toDiscussion Continued on Mandatory Electronic Filings After January 1, 2005: the Board (such as an employee’s social security number, relevant personal information, etc.) and the requests Mr. Fortier has received from various entities who are seeking an extension of time to comply with the Board’s filing requirements after 1-1-05 (Mr. Dionne stated staff is recommending the Board grant the extensions for six months with the exception of AIG who will be granted a one-month extension. Mr. Dionne, referring to copies of the Waivers and accompanying documents, noted AIG Claim Services, Inc. has asked for a two-week extension, but that staff is recommending a one-month extension to allow AIG ample time to complete the process, that Guard Insurance Group/Gallagher Bassett has requested a six-month extension which staff recommends granting, that ESIS, Inc. is seeking a three-month extension, which staff recommends granting but for a six-month timeframe in order to allow them a sufficient amount of time to migrate to a new system that allows them to transfer forms electronically to the Board, that St. Paul Companies/Travelers Insurance Company is asking for a six-month extension which staff recommends granting, and that Liberty Mutual is asking for a twelve-month extension but will be given a comparable six-month extension).
James Mingo MOVED TO ACCEPT STAFF’S RECOMMENDATION TO GRANT A ONE-MONTH EXTENSION TO AIG CLAIM SERVICES, INC. AND A SIX-MONTH EXTENSION TO GUARD INSURANCE GROUP/GALLAGHER-BASSETT INSURANCE COMPANY, ESIS, INC., ST.PAUL COMPANIES/TRAVELERS INSURANCE COMPANY AND LIBERTY MUTUAL INSURANCE COMPANY; John Cooney seconded. MOTION PASSES 7-0.

GENERAL COUNSEL REPORT

  1. Chapter 5 Consensus-Based Rulemaking Committee (Medical Fee Schedule): General Counsel J.Rohde reported that the Chapter 5 Committee will be holding its third meeting at 1 o’clock this afternoon to continue its deliberations on the issues that have been raised regarding the Board’s Medical Fee Schedule and noted the group hopes to present its report and recommendations to the Board at its meeting of 11-16-04, or 12-7-04.
  2. Enforcement of Coverage Provisions: J.Rohde advised directors that he, Assistant General Counsel T.Collier and Workers’ Compensation Specialist R.Coty recently met with representatives of the Dept. of Public Safety to discuss ways of improving compliance with the Board’s coverage provisions; specifically, the Board’s ability to request that the Dept. of Public Safety revoke a businesses’ liquor license if they fail to provide workers’ compensation coverage to their employees.
Discussion:
Directors and Staff discussed the Board having the ability to seek revocation of a business’ license for failing to comply with coverage provisions; the Dept. of Public Safety assisting Board staff in drafting a letter that will be sent to various businesses advising them of the Board’s ability to seek revocation of their liquor licenses if they do not comply with the coverage provisions in the Maine Workers’ Compensation Act and Staff’s prior meetings with the Dept. of Human Services on how best to address the same issue with Maine’s nursing homes and their plans to meet with representatives of the Dept. of Professional and Financial Regulations on the same issue.
  1. Brokerage Activities: Assistant General Counsel T.Collier informed the Board that he recently spoke with Attorney T.Record at the Maine Bureau of Insurance regarding the issue of brokerage activities and reported the National Association of Insurance Commissioners has formed an Executive Task Force, consisting of 13 member states, including Maine, to deal with broker activities.
Discussion:
Directors and Staff conversed briefly with respect to the broader issue at hand being how insurance brokerage companies get compensated, and whether there is an inherent conflict of interest in their acceptance of both brokerage clients who hire them to be their brokers and are receiving compensation from insurers with whom they work and are being paid essentially a finder’s fee; the Task Force looking at three issues: 1) The compensation issue and how brokers should be compensated; 2) Coordination of the investigation and coming up with a uniform template for each state to use with respect to their insurers and 3) Fraud reporting, including an on-line fraud reporting mechanism that would allow for anonymous tips about unscrupulous business activities and conversed briefly with respect to Attorney T.Record being the Bureau’s contact person if further questions arise.
  1. Pending Requests for Extension of Benefits Due to Extreme Financial Hardship: J.Rohde announced that the Board currently has four pending Requests for Extension of Benefits due to Extreme Financial Hardship and stated the Board may want to schedule two day’s of hearings, two cases each day, since one of the cases is expected to take four hours, or more to complete.
Discussion:
Directors and Staff discussed Senior Legal Secretary L.McKenney contacting all Board members to inquire as to their availability for two days to sit in on the hearings; a four-hour hearing being excessive and developing a document, similar to a Joint Scheduling Memo, to allow the Board to prepare for the witnesses to be presented at a hearing; the Board hearing all of the relevant evidence in such cases; J.Lambert’s notation with respect to some entities using a process that allows for written direct testimony which expedites the process; the Board having the ability to transfer hardship requests to a single hearing officer or a panel of three hearing officers and one of the pending cases most likely being premature and the prior requests the Board has received that have been settled prior to being scheduled for a hearing.

 

OLD BUSINESS

  1. Proposed Legislation: Chairman Dionne, referring to the draft legislation the Board received at its last meeting, reported that he will be discussing the proposals with the Governor and his Cabinet members on 11-5-04 and/or at the Cabinet Retreat scheduled for 11-8-04 and 11-9-04.
Discussion:
Directors and Staff discussed Executive Director/Chairman P.Dionne attending a Governor’s Cabinet meeting in Auburn on 11-8-04 and 11-9-04 at which time budgetary and legislative matters will be discussed (Chairman Dionne stated he will be prepared to apprise directors of Administration’s feedback at the next board meeting).

DRAFT LEGISLATION

BOARD REVIEW
(Approved for Submission on 10-19-04)

Sec. 1. 39-A MRSA §320 is amended to read:
Within 5 days of issuing a decision, a A hearing officer may request that the full board review a decision of the hearing officer if the decision involves an issue that is of significance to the operation of the workers' compensation system. Except when a motion to find the facts specially and state separately the conclusions of law is filed, the request must be made within 25 days of issuing a decision. If a motion to find the facts specially and state separately the conclusions of law is filed the request must be made within 5 days of issuing a decision on the motion. There may be no such review of findings of fact made by a hearing officer. If a hearing officer asks for review, the time for appeal to the Law Court pursuant to section 322 is stayed and no further action may be taken until a decision of the board has been made. If the board reviews a decision of a hearing officer, any appeal must be from the decision of the board. The time for appeal begins upon the board’s issuance of a written decision on the merits of the case or written notice that the board denies review. The board shall vote on whether to review the decision. If a majority of the board’s membership fails to vote to grant review or the board fails to act within 60 days after receiving the initial request for review, the decision of the hearing officer stands. If the board votes to review the decision, the board may delegate responsibility for reviewing the decision of the hearing officer under this section to panels of board members consisting of equal numbers of representatives of labor and management. Review must be on the record and on written briefs only. Upon a vote of a majority of the board’s membership, the board shall issue a written decision affirming, reversing or modifying the hearing officer's decision. The written decision of the board must be filed with the board and mailed to the parties or their counsel. If the board fails to adopt a decision by majority vote, the decision of the hearing officer stands and is subject to direct appellate review in the same manner as if the board had not voted to review the decision. 

SUMMARY

This bill extends the time within which a hearing officer may request review of a decision by the full board to allow for the filing of motions to find the facts specially and state separately the conclusions of law.

INDEPENDENT MEDICAL EXAMINERS

Sec. 1. 39-A MRSA §312(2) is amended to read:

2.  Duties. An independent medical examiner shall render medical findings on the medical condition of an employee and related issues as specified under this section. The Except as provided in paragraph 2-A of this section, the independent medical examiner in a case may not be the employee's treating health care provider and may not have treated the employee with respect to the injury for which the claim is being made or the benefits are being paid. Nothing in this subsection precludes the selection of a provider authorized to receive reimbursement under section 206 to serve in the capacity of an independent medical examiner. A physician who has examined an employee at the request of an insurance company, employer or employee in accordance with section 207 during the previous 52 weeks is not eligible to serve as an independent medical examiner.

Sec. 2. 39-A MRSA §312(2-A) is enacted to read:

2-A. Additional examiners. (A) If the board determines that the list of medical examiners contains an insufficient number of health care providers in a specific health care specialty, the board may appoint one or more health care providers to serve as independent medical examiners for that specific health care specialty if the health care provider is eligible to serve pursuant to subsection 1 of this section but would not be eligible to serve as an independent medical examiner because the health care provider has examined an employee at the request of an insurance company, employer or employee in accordance with section 207 during the previous 52 weeks.
(B) A health care provider appointed pursuant to paragraph A of this subsection shall be removed from the list of independent medical examiners when the board appoints a health care provider for that health care specialty who is eligible to serve as an independent medical examiner pursuant to subsections 1 and 2 of this section.

Sec. 3. 39-A MRSA §312(7) is amended to read:

7.  Weight. If the parties agree to a medical examiner, the examiner's findings are binding. If the board assigns an independent medical examiner, the The board shall adopt the medical findings of the independent medical examiner unless there is clear and convincing evidence to the contrary in the record that does not support the medical findings. Contrary evidence does not include medical evidence not considered by the independent medical examiner. The board shall state in writing the reasons for not accepting the medical findings of the independent medical examiner.


SUMMARY

This bill permits the Board to ensure that it has an adequate number of independent medical examiners in specific health care specialties. This bill allows the Board to appoint a healthcare provider in a specific health care specialty who is qualified pursuant to subsection 1 of this section, but would be disqualified pursuant to subsection 2. The appointment ends when the Board appoints a healthcare provider qualified to serve pursuant to both subsections 1 and 2 to serve as an independent medical examiner in the specific health care specialty.

This bill also encourages parties to agree to the selection of independent medical examiners by establishing that, whether or not the parties have agreed to the selection of an independent medical examiner, the examiner’s findings must be adopted unless there is clear and convincing evidence to the contrary in the record that does not support the medical findings.

Discussion:
Directors and Staff discussed the proposed bill reducing the weight of an agreed-upon IME from binding to “must be accepted as clear and convincing evidence” and allowing the Board to appoint an IME if there is an insufficient number of healthcare providers in a particular specialty, even if that physician would otherwise be disqualified because he or she had performed an exam under Sec. 207 in the last 52 weeks.

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GRANT v. CMP

Sec. 1. 39-A MRSA §205(9) (A-1) is enacted to read:

(A-1) When an employee who is receiving 100% incapacity benefits pursuant to either section 212 or 213 of this Act has obtained post-injury employment with a new employer that is not the employer paying benefits, the employer, insurer or group self-insurer may offset benefits only in accordance with this paragraph.

(1) The employer, insurer or group self-insurer must receive specific verbal or written confirmation of actual earnings from the employee or specific documentation of actual earnings from any other source.

(2) The employer, insurer or group self-insurer must notify the Board and the employee of the offset taken pursuant to this paragraph.

(3) Within 7 days after notice that the employee no longer has earnings or has reduced earnings from the employment with the new employer, the employer, insurer or group self-insurer shall reinstate payment of 100% incapacity benefits to the same level as before the offset or shall reinstate payment of benefits to a level that reflects the reduction in earnings.

Sec. 2. 39-A MRSA §205(9) (C) is amended to read:

(C) The employee may file a petition for review, contesting the employer’s discontinuance, or reduction or offset of compensation under this subsection. Regardless of whether the employee files a petition prior to the date of the discontinuance, or reduction or offset, benefits may be discontinued, or reduced or offset as described in paragraph A, A-1 or B.

 

SUMMARY

This legislation permits an employer, insurer or group self-insurer to offset its obligation to pay incapacity benefits when an employee who is receiving 100% incapacity benefits pursuant to either section 212 or 213 obtains employment with an employer other than the employer paying benefits. The employer, insurer or group self-insurer must obtain confirmation or documentation of the earnings before taking an offset. The ability to offset ends as soon as the employee has a reduction in earnings and benefits must be reinstated to 100% incapacity benefits, if the employee no longer has any earnings, or reinstated to a level commensurate with the employee’s reduced earnings. An employee can contest an offset of benefits pursuant to this section by filing a petition for review. This bill permits an employer, insurer or group self-insurer to offset its obligation to pay incapacity benefits when an employee who is receiving 100% incapacity benefits pursuant to either section 212 or 213 obtains employment within an employer other than the employer paying benefits. The employer, insurer or group self-insurer must obtain confirmation or documentation of the earnings before taking an offset. The 100% incapacity benefits, if the employee no longer has any earnings, or reinstated to a level commensurate with the employee’s reduced earnings. An employee can contest an offset of benefits pursuant to this section by filling a Petition for Review.

Discussion:
Directors and Staff discussed the draft bill permitting an employer, insurer or group self-insurer to offset its obligation to pay incapacity benefits when an employee is receiving 100% incapacity benefits, pursuant to either Sec. 212 or 213 (Staff advised directors that the draft bill requires an employer, insurer or group self-insurer to obtain confirmation or documentation of the earnings before taking an offset and noted an employee can contest an offset of benefits pursuant to this section by filling a Petition for Review); staff providing the Board with a revised version of the bill in preparation for today’s meeting (Staff noted that in the original draft the offset would have applied whether or not the employee was receiving 100% incapacity benefits and remarked that since it is limited to cases where the employee is receiving 100% incapacity if he or she loses those earnings then it would automatically go back to 100% incapacity, or if there is a reduction in earnings then the second part would kick in and the benefits would be adjusted to a level to reflect those reduced earnings); Director Monfiletto’s proposed revisions to the draft (Director Monfiletto recommended changing the word “shall” to “must” in the third and fourth sentence in paragraph 3; removing the words “verbal, or” from paragraph 1 and the language that reads “any other source”, and adding a sentence that states the reinstatement of benefits also applies to cases in which an employee is returning to work for the same employer); what impact, if any, the proposed revisions would have on Sec. 205(9) (A) (Staff explained that the Board will need to amend the language in the statute for the reinstatement to apply for the same employer. Also, Attorney A.Muir noted the draft bill addresses only a small segment of people and commented that the last change would completely change the rules that apply to employees who return to work for the same employer); Attorney A.Muir’s comments regarding his preparation of protocols for his client to follow in regard to return-to-work cases which states that if there is no compensation payment scheme then a form will be sent to the employee for his or her signature (Mr. Muir noted the protocols will pertain to the minority of cases since most cases have a compensation payment scheme in place); executing a Consent Decree at mediation conference (Mr. Muir noted that in such a case there is no obligation to reinstate) and amending the bill for review at the next board meeting.

UNIFIED CURRENT SERVICES BUDGET SUBMISSION

Sec. 1. 39-A MRSA §154(6) is amended to read:

6.  Assessment levied.
      A. Beginning in the 2007-08 fiscal year T the assessments levied under this section may not shall be designed to produce sufficient revenue to fund expenditures approved and allocated by the Legislature pursuant to this section. more than $6,000,000 in revenues annually beginning in the 1995-96 fiscal year, more than $6,600,000 annually beginning in the 1997-98 fiscal year, more than $6,735,000 beginning in the 1999-00 fiscal year, more than $7,035,000 in the 2001-02 fiscal year, more than $6,860,000 beginning in the 2002-03 fiscal year, more than $8,390,000 beginning in the 2003-04 fiscal year, more than $8,565,000 beginning in the 2004-05 fiscal year or more than $8,525,000 beginning in the 2005-06 fiscal year. Assessments collected that exceed $6,000,000 beginning in the 1995-96 fiscal year, $6,600,000 beginning in the 1997-98 fiscal year, $6,735,000 beginning in the 1999-00 fiscal year, $7,035,000 in fiscal year 2001-02, $6,860,000 beginning in the 2002-03 fiscal year, $8,390,000 beginning in the 2003-04 fiscal year, $8,565,000 beginning in the 2004-05 fiscal year or $8,525,000 beginning in the 2005-06 fiscal year by a margin of more than 10% must be refunded to those who paid the assessment. Any amount collected above the board's allocated budget and within the 10% margin must be used to create a reserve of up to 1/4 of the board's annual budget. The board, by a majority vote of its membership, may use its reserve to assist in funding its Personal Services account expenditures and All Other account expenditures and to help defray the costs incurred by the board pursuant to this Act including administrative expenses, consulting fees and all other reasonable costs incurred to administer this Act. The board shall notify the chairs and members of the joint standing committee of the Legislature having jurisdiction over labor matters whenever the board receives approval from the State Budget Officer and the Governor to use reserve funds to increase its allotment above the allocation authorized by the Legislature. Any collected amounts or savings above the allowed reserve must be used to reduce the assessment for the following fiscal year.
      B. The board shall determine the assessments prior to May 1st and shall assess each insurance company or association and self-insured employer it’s pro rata share for expenditures during the fiscal year beginning July 1st. Each self-insured employer shall pay the assessment on or before June 1st. Each insurance company or association shall pay the assessment in accordance with subsection 3.
      C. The board shall submit its budget recommendations as part of the unified current services budget legislation in accordance with Title 5, section 1663 to 1665. The expenditures provided in this section are subject to legislative approval. The board may also receive other funds as appropriated by the Legislature.
      D. Except as specified in this subsection, funds that are not expended at the end of a fiscal year do not lapse but must be carried forward to be expended for the purposes specified in this section in succeeding fiscal years; but, with the exception of funds carried forward from fiscal year 2006-07 to fiscal year 2007-08, unexpended funds in excess of 10% of the total annual assessment authorized in this section must, at the option of the Workers’ Compensation Board, either be presented to the Legislature in accordance with paragraph C for reallocation and expenditure or used to reduce the Administrative Fund assessment in the following fiscal year. In the case of funds carried forward from fiscal year 2006-07 to fiscal year 2007-08, 100% of these funds may be expended for the purposes specified in this section.

 

SUMMARY

This legislation requires the board to submit its budget recommendations as part of the unified current services budget legislation. The assessment for a fiscal year shall be equivalent to the allocation approved by the Legislature for that fiscal year.

ALL OTHER & PERSONAL SERVICES ADJUSTMENTS

Sec. 1. 39-A MRSA §154(6) is amended to read:

6.  Assessment levied. The assessments levied under this section may not be designed to produce more than $6,000,000 in revenues annually beginning in the 1995-96 fiscal year, more than $6,600,000 annually beginning in the 1997-98 fiscal year, more than $6,735,000 beginning in the 1999-00 fiscal year, more than $7,035,000 in the 2001-02 fiscal year, more than $6,860,000 beginning in the 2002-03 fiscal year, more than $8,390,000 beginning in the 2003-04 fiscal year, more than $8,565,000 beginning in the 2004-05 fiscal year or more than $8,525,000 beginning in the 2005-06 fiscal year. Beginning on April 1, 2005, the maximum assessment under this section shall be annually adjusted by an amount equal to the change that results from applying the Consumer Price Index forecast of the Consensus Economic Forecasting Commission to the portion of the budget designated “All Other” and the change in the portion of the board’s budget designated “Personal Services” that results from changes in employee salaries and benefits that will be in effect during the next fiscal year. Assessments collected that exceed $6,000,000 beginning in the 1995-96 fiscal year, $6,600,000 beginning in the 1997-98 fiscal year, $6,735,000 beginning in the 1999-00 fiscal year, $7,035,000 in fiscal year 2001-02, $6,860,000 beginning in the 2002-03 fiscal year, $8,390,000 beginning in the 2003-04 fiscal year, $8,565,000 beginning in the 2004-05 fiscal year or $8,525,000 beginning in the 2005-06 the maximum assessment in a fiscal year by a margin of more than 10% must be refunded to those who paid the assessment. Any amount collected above the board's allocated budget and within the 10% margin must be used to create a reserve of up to 1/4 of the board's annual budget. The board, by a majority vote of its membership, may use its reserve to assist in funding its Personal Services account expenditures and All Other account expenditures and to help defray the costs incurred by the board pursuant to this Act including administrative expenses, consulting fees and all other reasonable costs incurred to administer this Act. The board shall notify the chairs and members of the joint standing committee of the Legislature having jurisdiction over labor matters whenever the board receives approval from the State Budget Officer and the Governor to use reserve funds to increase its allotment above the allocation authorized by the Legislature. Any collected amounts or savings above the allowed reserve must be used to reduce the assessment for the following fiscal year. The board shall determine the assessments prior to May 1st and shall assess each insurance company or association and self-insured employer its pro rata share for expenditures during the fiscal year beginning July 1st. Each self-insured employer shall pay the assessment on or before June 1st. Each insurance company or association shall pay the assessment in accordance with subsection 3.

 

SUMMARY

This bill requires that the maximum assessment be adjusted annually to take into account changes in the cost of the board’s Personal Services budget that result from changes in the cost of employee salaries and benefits and changes, equivalent to the most recent Consumer Price Index forecast of the Consensus Economic Forecasting Commission, in the cost of the board’s All Other budget.

Discussion:
Directors and Staff discussed the draft bill eliminating the Board’s maximum assessment and requiring the Board to prepare a budget for submission to the Bureau of the Budget and for review by the Governor and respective Legislative Committees (Staff noted that whatever the Legislature approves for an allocation becomes the Board’s assessment for the fiscal years of each biennium involved in the submission. Staff also referred directors to the language in the proposed bill regarding the Board keeping 10% of its unexpended funds to be carried forward, which is currently done under the Board’s reserve account); the second draft bill keeping the maximum assessment, which will be adjusted annually by an amount equivalent to the Consumer Price Index (CPI) calculated by the Consensus Revenue Forecasting Committee, which applies to the “All Other” portion of the Board’s budget; the “Personnel Services” portion of the budget being adjusted by an amount equivalent to changes in employee salaries and benefits; Attorney Richards’ e-mail correspondence, which was forwarded to the Board members in preparation for today’s meeting wherein he addresses the various proposals; readdressing staff’s proposed legislation at the next board meeting, which is scheduled for 11-16-04 at the Board’s Augusta Regional Office (at which time the Board can discuss the feedback staff has received on the proposals, as well as the feedback Chairman Dionne receives from Governor Baldacci and his Cabinet members); the issues that have arisen with the past few budget cycles (Staff noted that the Board has prepared a budget and then been informed that it is not showing enough revenue for the projected expenditures, which then requires the Board to use some of its reserve accounts funds, or to submit a legislative proposal increasing the assessment cap); the proposed legislation limiting the Board’s revenue (Staff noted there may be more scrutiny on behalf of the Bureau of the Budget as a result of the draft legislation and remarked that the bill is similar to the process used by the Public Advocate’s Office which has a one-on-one discussion with the Budget Office at the time they submit their budget); the draft bill probably going before the Joint Standing Committee on Labor, the Committee having jurisdiction over Board matters, and then being reviewed by the Appropriations Committee and the draft proposals still allowing the Board to carry forward unexpended funds to use like a salary plan (Staff noted that if a contract increase approved during the middle of a biennium – for which the Board could not budget for, it would have money in its reserves to pay for it).

ADJOURNMENT

John Cooney MOVED TO ADJOURN TODAY’S MEETING; Joan Kirkpatrick seconded. MOTION PASSES 7-0. The meeting formally adjourned at 11:12 a.m.

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