PRINTER'S NO. 3605
No. 660 Session of 2004
INTRODUCED BY GODSHALL, ALLEN, BAKER, BALDWIN, BOYD, BROWNE, CAPPELLI, CAUSER, CLYMER, CRAHALLA, DENLINGER, FAIRCHILD, FICHTER, FORCIER, HERSHEY, HICKERNELL, HUTCHINSON, KILLION, KIRKLAND, LEH, LEWIS, MARSICO, R. MILLER, S. MILLER, MUSTIO, NAILOR, PALLONE, PICKETT, REED, REICHLEY, ROSS, RUBLEY, SAYLOR, SCAVELLO, SCHRODER, SCRIMENTI, SEMMEL, R. STEVENSON, E. Z. TAYLOR, TIGUE, TURZAI, WATSON AND YOUNGBLOOD, MARCH 31, 2004
REFERRED TO COMMITTEE ON LABOR RELATIONS, MARCH 31, 2004
A RESOLUTION 1 Directing the Legislative Budget and Finance Committee to 2 conduct a comprehensive study of the Commonwealth's workers' 3 compensation system in comparison to our neighboring states 4 with regard to particular costs and procedures. 5 WHEREAS, The Legislative Budget and Finance Committee is a 6 bipartisan, bicameral legislative service agency consisting of 7 12 members of the General Assembly established by statute to 8 conduct studies and make recommendations aimed at eliminating 9 unnecessary expenditures, to promote economy in Commonwealth 10 government and to ensure that Commonwealth funds are being 11 expended in accordance with legislative intent and law; and 12 WHEREAS, The committee is authorized to conduct a wide range 13 of research activities pertaining to the operation and 14 performance of State-funded programs and agencies; and 15 WHEREAS, The cost of providing workers' compensation coverage 16 to employees is one of the largest operating costs to employers
1 in this Commonwealth, and keeping the cost of workers' 2 compensation insurance as low as possible is a key factor in 3 making this Commonwealth competitive with neighboring states in 4 retaining businesses and attracting new employers; and 5 WHEREAS, A recent study issued by the Pennsylvania Chamber of 6 Business and Industry ranked Pennsylvania as one of the worst 7 performing states regarding workers' compensation costs to 8 employers when compared to the neighboring states of Delaware, 9 Maryland, New Jersey, New York, North Carolina, Ohio, West 10 Virginia and Virginia; and 11 WHEREAS, The bases for workers' compensation insurance rates 12 are the loss/cost rates issued by the Pennsylvania Compensation 13 Rating Bureau and approved by the Insurance Commissioner; and 14 WHEREAS, The most recent loss/cost rate filing by the bureau 15 proposes a 3.32% overall rate increase to be effective April 1, 16 2004, and the actuarial statistics included in the filing 17 indicate an approximate annual increase of 8% in the indemnity 18 and medical costs associated with each claim; and 19 WHEREAS, The bureau indicates that this rate increase could 20 start a trend of annual rate increases because of the upward 21 trends in medical and indemnity costs associated with each 22 claim; and 23 WHEREAS, The General Assembly believes that the medical, 24 administrative and litigation costs are areas of the workers' 25 compensation system that could be reduced; and 26 WHEREAS, It is in the interests of the Commonwealth for the 27 General Assembly to take action on this problem before the 28 possibility of annual increases in workers' compensation rates 29 makes our State even less competitive with our neighboring 30 states; therefore be it 20040H0660R3605 - 2 -
1 RESOLVED, That the Legislative Budget and Finance Committee 2 conduct a comprehensive study of the Commonwealth's workers' 3 compensation system in comparison to our neighboring states with 4 regard to medical and indemnity costs per claim, litigation 5 costs, claim resolution process and adjudication procedures and 6 the reserve and pricing practices of insurance carriers that 7 write workers' compensation insurance; and be it further 8 RESOLVED, That the committee make recommendations to the 9 General Assembly on how the act of June 2, 1915 (P.L.736, 10 No.338), known as the Workers' Compensation Act, can be changed 11 to lower medical costs, lower indemnity costs, reduce litigation 12 costs, decrease the time needed to adjudicate disputed claims, 13 lower premium costs by changing current reserve and pricing 14 practices by insurers, and simplify adjudication procedures; and 15 be it further 16 RESOLVED, That the committee make these recommendations based 17 on provisions in other states' laws which the committee deems to 18 be worthy of consideration; and be it further 19 RESOLVED, That the committee submit a report of its findings 20 to the Chief Clerk of the House of Representatives by September 21 30, 2004. C30L82MRD/20040H0660R3605 - 3 -