The Cloakroom Report
Apr 26, 2017

Legislators have historically gathered in private rooms, known as "Cloak Rooms," located just off the floor of the House and Senate to privately discuss pending legislation. This special edition of The Way takes you inside the Cloak Room to highlight significant legislation before the Congress and the state general assemblies that affect the claims and risk management industry.







Last year a comprehensive report issued by the U.S. Department of Labor and several award-winning investigative journalism pieces called into question the fairness of the benefits paid to injured workers around the country and chilled workers' compensation reform. This year, particularly against the backdrop of the 2016 election, the tide has turned.



In a move lauded by industry, Iowa Gov. Terry Branstad signed into law multi-faceted workers' compensation reform. In Florida, both the House and Senate are moving bills to limit attorneys' fees to control an anticipated premium rate hike. In New York, Gov. Andrew Cuomo put forward his workers' compensation reform package, which requires a workers' compensation formulary, prompt hearings and relief for first responders. Yet, a budget impasse continues to stall workers' compensation reform here in Illinois as estimates peg the state's workers' compensation system cost to taxpayers at more than a billion dollars annually.



New Mexico Gov. Susana Martinez signed into law a measure that enables employers to terminate workers' compensation benefits to injured staffers fired for misconduct after returning to the job. And, pending the governor's signature, Montana legislation would eliminate workers' compensation benefits for employees who knowingly fail to disclose medical conditions pertinent to their job requirements on pre-employment questionnaires. With respect to the "on demand economy", we are following several measures that seek to clarify a worker's status as an employee or an independent contractor, most notably in Alaska, where Gov. Bill Walker himself is sponsoring the clarifying legislation.



In previous editions of the Cloakroom Report, we have detailed the legislative debate and proposed federal oversight of opt-out programs in various states from Oklahoma, Tennessee and the Southeast. This year only the Arkansas legislature has weighed the opt-out model.



Opioid addiction remains one of most critical public health risks, drawing significant attention at the federal and state level. Earlier this year, New Jersey Gov. Chris Christie signed into law one of the most stringent opioid use bills in our industry. He was then asked to serve as the nation's leading advisor to the President on narcotic addiction and reduction. In Maryland, a measure awaits the governor's signature to improve opioid awareness and education. In Ohio, lawmakers and Gov. Kasich moved to limit opioid prescriptions to just one week. A measure requiring prescribers to access a statewide database before prescribing opioids sailed through the North Carolina statehouse. And, Gov. John Bel Edwards just moved opioid deterrence to the top of his legislative agenda in Louisiana.



Notable states moving on clear formulary programs include New York and California. NY regulators are just beginning the process. However, regulators in California are hard at work to establish the rules necessary to implement the Golden State's drug formulary in advance of the July 1 mandate from Sacramento. The public comment period closes on May 1st. As states make progress in the area of drug formularies and opioid restrictions, we expect to see a continued downward trend in narcotic use and abuse.

Making Our Way Around The Country


In the wake of a GOP-backed Congressional measure to roll back internet privacy protections, ten states around the country are seeking to upload internet privacy more locally. As the marketplace for the Internet of Things (IoT) continues to emerge, numerous policy groups are taking these high-tech, high-stakes to Capitol Hill and the President directly. And on the roads, autonomous vehicles are around the bend in TexasGeorgia, and beyond.



This Saturday marks President Trump's 100th day in office, a traditional marker for the start of a new administration. President Trump is pushing to confirm a Secretary of the Department of Labor. Regardless, the agency has taken significant action this year to roll back many of President Obama's workplace safety initiatives. We have seen enforcement delays in the Silica rule affecting construction and manufacturing sectors and delays in the Beryllium rule targeting high tech assembly facilities and electronics makers. The agency modified the Electronic Reporting rule for "lookback" on reportable claims. We are still tracking the uncertain progress of the Anti-Retaliation provisions of the reporting rule, which addresses the propriety of post-accident drug testing.



We expect to see further clarification on the President's drug enforcement policies as well as a pitched battle in Congress on the "Pathway to Marijuana Reform." And, despite an early setback, the GOP will take a second run at health care reform. In addition, high on the President's agenda is a robust effort to promote an infrastructure funding program. And speaking of legislative agenda, we will be engaged in several initiatives on behalf of the industry involving the pending National Flood Insurance Program and sensible Medicare Secondary Payer reform.

About The Way

The Way is Gallagher Bassett's weekly governmental briefing on state and federal affairs that affect our industry. We thank you for starting your Wednesday morning with us. Please be sure to follow #GBTheWay for additional news and updates as we make our way throughout the country on the issues affecting our industry. For more information, please connect with GB on LinkedIn, follow us on Twitter, or contact the authors, Greg McKenna or Cari Miller, directly.


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