Allan F. Ramsaur, TBA Executive Director
(800) 899-6993 or (615) 277-3200
aramsaur@tnbar.org
February 19, 2004
Workers’comp debate continues
Discussion of the workers’ compensation issue continued to take center stage this week, with the Senate Commerce, Agriculture and Labor Committee joining the Ad-Hoc House Senate Committee in taking testimony on the subject.
The Ad-Hoc Committee continued its difficult task of digging through the complicated data and finding information from other Southern states that would allow a valid comparison with Tennessee workers’ compensation law. One member summarized what appeared to be the prevailing view in the committee when he said that this subject was a lot more complicated than he had thought, and that it would take a great deal of time to sort things out. Another senator, speaking after State Treasurer Dale Sims’ presentation, said that he felt the committee was always comparing "apples to oranges."
The treasurer's presentation was perhaps the most systematic to date, avoiding the “war stories” that have been used by some other speakers. Sims cited national research agencies such as the National Council on Compensation Insurance in noting that Tennessee was about average nationally in workers' compensation costs. He described in detail how premiums are calculated, pointing out the various factors that can affect an employer's costs.
He also compared Tennessee to some Southern states — those that had accurate figures available — on issues that he said were important variables affecting costs. First, he compared the Southern states' average weekly wages. Four states had higher average weekly wages than Tennessee while five had lower figures.
He then compared the maximum weekly benefit for permanent partial disability, a part of the workers' compensation system that has been featured in the debate this year as a possible problem area. Omitting Florida, for which he did not have data, Sims found that two states had higher maximum payments than Tennessee while seven had lower maximum payments. It turned out this was because Tennessee and three other states set the maximum payment at or above 100 percent of the average weekly wage in the state. Others such as Alabama set the maximum benefit as low as 37.5 percent. Also, Tennessee was one of three states in the South that does not have a medical fee schedule.
After discussing the types of permanent partial disability systems, Sims showed comparisons for lost costs for different categories of workers, such as office workers and construction workers. Tennessee was fourth among the 10 states reviewed in overall loss costs and was generally about at that point for all the occupational types he considered, except manufacturing, where Tennessee was the second most costly. Sims concluded that for some unknown reason, Tennessee's costs in this area are relatively higher than in other types of employment categories. He said this indicates that it is not Tennessee's workers' compensation system that is causing any problems in the manufacturing area since the very same system is used in all occupational categories.
Finally, his analysis showed that Tennessee's indemnity costs for permanent partial disability were among the very lowest in the region. The medical costs were also among the lowest in the South, making the average cost per case among the lowest. However, Tennessee had one of the highest frequencies of permanent partial disability claims making total costs for this area near the top.
This discussion illustrates the detailed and intense work that the legislature is devoting to this issue. We are encouraged that many members realize that this is a complicated area of the law where "quick-fixes" designed to remedy anecdotal problems can cause serious negative, but unintended, consequences. The TBA has offered the expertise of its members to aid the General Assembly in its deliberations.
TBA members on the Hill
Members of the TBA this week journeyed to Nashville to meet their legislators live and in person. On Tuesday, TBA's Leadership Law group heard from legislators, staff and lobbyists about the legislative process. They then visited the General Assembly, sitting in on the Senate Judiciary Committee session, and later were in the gallery to hear Gov. Bredesen’s TennCare address to the Joint Convention of the House and Senate. Many of them stayed to join other TBA members at the annual TBA Big Shrimp reception for legislators.
While the Governor's decision to announce his TennCare plans during the reception made logistics a little difficult, a large crowd and many legislators joined TBA officials and staff for a friendly and open discussion of mutual concerns. The next morning TBA's Day on the Hill took place, with members meeting with their individual legislators following a briefing from House Judiciary Committee Chair Joe Fowlkes, D-Cornersville. TBA President John Tarpley also took members of TBA's leadership to visit with Lt. Governor Wilder and Speaker Jimmy Naifeh. They offered TBA's technical assistance on the workers' compensation issue, as well as others.
Keep up to date on legislation of interest
The TBA bill tracking service lets you read abstracts of bills, check their status in both houses, find out who is sponsoring them and link to full versions of the legislation.
TBA Watch List Monitor close to 300 bills and resolutions of interest to the Tennessee legal community.
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Questions, comments? Contact TBA Legislative Counsel Steve Cobb at SAC@wallerlaw.com or TBA Executive Director Allan F. Ramsaur at aramsaur@tnbar.org
