Hearing Held on Retro Legislation - Contact Your State Senators

This week a hearing was held on legislation that would negatively impact the AGC Retro and other workers compensation retrospective rating programs.

AGC members are strongly encouraged to contact their State Senators about this bill via the Grassroots Action Center on AGCs website. Click AGC Grassroots Action Center.

Steve Seger of Fousheé and Associates testified on behalf of AGC in opposition to the bill. Other AGC members who traveled to Olympia to demonstrate opposition to the legislation were Don Coovert (John Korsmo Construction) Mark Gauger and Russ Kilcup (GLY) Bob Maus (Ferguson Construction). AGC Executive Vice President David DHondt and other AGC staff sporting AGC Retro Works stickers also participated.

Among other things the bill (SB 6035) restricts refund flexibility ignores the risk assumed by retro associations and holds retro association to a different standard than would apply to the rest of the State Fund for funds use.

Segers testimony included the following points:

• SB 6035 is an inappropriate intrusion into contractual relationships which Retro members enter into voluntarily
• We know what is in our contract and we have choices if we dont like how the program is run
• As a long-time member of the AGC Retro Committee I see the benefits and help shape the direction of the program
• We dont need the protection from our association that this bill seeks to provide
• AGCs Retro program employs stringent underwriting - including Safety Team - ensuring all members have safety programs that meet or exceed state standards
• Member commitment to light duty and other RTW programs assures the best possible worker outcomes
• Individual employers - as well as the association - invest significantly in providing the safest work place and most responsive claims management services -- which benefit employers and workers alike
• These investments would be jeopardized with the adoption of SB 6035 - if employers could not rely on the services provided and returns expected
• One of the possible effects of the bill would be the retention of larger refund portions by Retro associations because it is the association that is on-the-hook for any additional assessments. Employers may see less money in annual refunds in order to guard against future liabilities to the association.
• This is not a hypothetical concern because many plans have disappeared due to penalties incurred when adjustments are made in subsequent refund years
• 2009 is not the year to pass this bill - wait until the Retro study that the Legislature created finishes its report

SB 6035 was heard in the Senate Labor Commerce & Consumer Protection Committee. Sponsors of the bill are Senators Kohl-Welles McDermott Franklin Keiser Jacobsen Fraser Regala Haugen Murray Kline and McAuliffe.

Contact Rick Slunaker AGCs Director of Government Affairs at 360-352-5000 with questions or comments.