Keeping in touch: A look at worker's comp

Montana has by far the highest workers’ compensation rates in the country, with costs over 160% above the national median. An overhaul of the system is essential to prevent the exodus of employers who find it more cost-efficient to conduct business in nearby states.  House Republicans introduced a bill this past week that addresses our state’s burdensome workers’ comp costs and will allow employers to keep jobs in Montana.

House Bill 334 is a jobs bill.  It allows more earnings to stay in the hands of the private sector, which they can then use to hire new employees and for reinvestment in local economies. Representative Scott Reichner of Bigfork, the primary sponsor House Bill 334, recently received this bill’s rating from the non-partisan NCCI.  In the first year after implementation, workers’ comp costs will decrease anywhere from 21% to 44%.  Those are real savings that have an immediate impact on jobs in our community.

Some of the primary cost savings will be realized by modifying the permanent partial disability component of workers’ compensation.  While these claims only represent 9% of the total amount of claims, they account for almost 70% of the total costs. This legislation also provides for closure of medical benefits sixty months after the date of injury, with exclusions for prosthetics and permanent disabilities. In addition, it provides for insurer designation of a treating physician or non-treating physician.

There are many family businesses that run on tight margins with slim profits in this district. Workers’ comp costs can be the final straw that ends up bankrupting many local employers, especially in this economic downturn.  And for us with unemployment over 17%, this change might be that tool in the tool box (so to speak) that will help turn things around.

For larger operations, it can mean the difference between doing business here in Montana or going a couple hundred miles across the border. Take for instance a company that pays a coal miner $50,000 a year.  Under the current system, the employer pays more than $3,000 in workers’ comp costs over 12 months.  By comparison, a similar employer in Wyoming pays only $500 in workers’ comp costs for an employee who earns the same wage, and it’s examples like these that those larger operations consider when deciding to invest in a state.

Currently, our neighbor North Dakota has the lowest work comp rates in the country, with another neighbor of ours, Idaho raking in the middle. If Montana is able to realize forty percent savings, which the NCCI results suggest is quite possible, we will go from last in the nation to middle of the pack in the first year alone, helping us to join the competitive race for business on a much more pro-active manner, with not only our neighbors but other states as well.

I want to thank all of my constituents who have taken the time to share their concerns, comments, support or opposition of various bills, as it really is about hearing the people’s voice, yet remembering there are many voices being heard which reflect different views, experience and perceptions.  In the end, those of us who serve, such as myself, have only one vote to cast on behalf of their District and the State as a whole.

For those of you haven’t contacted me, but would like to I can be reached during the session by leaving a message for me at (406) 444-4800, or by e-mailing me at pathd13@blackfoot.net , or by visiting the legislative branch website at www.leg.mt.gov and clicking on the Contact a Legislator link. Instructions are given there on how to send electronic messages.  You also may mail your comments to me at Representative Pat Ingraham, Capitol Building, P. O. Box 200400, Helena, MT 59620-0400.