Cloakroom Report
Apr 18, 2018

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 and passed 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.

Cloakroom Report


Kentucky led the way this legislative session with the state's most comprehensive workers' compensation reform bill (H.B. 2) in more than 15 years. The measure imposes significant changes to the act, including the creation of a drug formulary, a 15-year cap on claims from the date of injury (with an amendment that called for recertification filings if a worker is still suffering), increases to weekly wage caps, and the establishment of medical treatment guidelines and standards of care. House Bill 2 garnered support from a broad array of business and industry trade associations.



In recognition of the occupational hazards and disease conditions associated uniquely to fire departments, police officers, and other first responders, Florida Governor Rick Scott signed into law S.B. 376 that would allow first responders to claim post-traumatic stress disorder (PTSD) as a compensable condition for workers' compensation. We saw similar legislation succeed in Washington State and in Arizona. We will continue to track expansions of workers' compensation coverage to include emerging employment risks.



Speaking of emerging coverage issues, and with the proliferation of sharing apps and the "on-demand" economy, 2018 has seen the rise of legislation that focuses solely on creating a clear test for worker classification in the on-demand sector. Bills with nearly identical language around online marketplaces were introduced around the country. Gig economy measures were signed into law in Kentucky, Utah, and Indiana. Similar bills passed both houses in Iowa and Tennessee, passed one house of the legislature in Georgia and Colorado, and was introduced in Alabama.



In Washington, lawmakers in both chambers of Congress are at work on legislation aimed at curtailing the opioid epidemic. Pundits inside the Beltway expect Congress to pass a major opioid reduction package by the end of May, which is likely to be one of the last major legislative efforts ahead of November's midterm elections. In the states, Florida Governor Rick Scott signed legislation that now imposes a three-day limit on most opioid prescriptions, though doctors could provide a seven-day supply if "medically necessary." Physicians will now be required to check a prescription-monitoring database in an effort to prevent doctor shopping. Indiana enacted a similar provision to leverage Hoosier State PDMP. In West Virginia, the state most affected by opioid deaths, Governor Jim Justice signed a bill that limits opioid prescriptions to a seven day supply. So did Arizona Governor Doug Ducey. Hawaii is up next with its workers' compensation opioid reduction bill.



With the development of workers' compensation drug formularies from coast to coast; we look to the states in between. In Indiana, the state legislature passed a drug formulary, which will prohibit WC reimbursement for any "N" drug in the Official Disability Guidelines Drug Formulary. In Kentucky, as part of the Bluegrass State's headlining workers' compensation reform, the Labor Cabinet will adopt an evidence-based pharmaceutical formulary and medical treatment guidelines. The Arkansas Workers' Compensation Commission announced a drug formulary that will regulate all outpatient medications prescribed as a result of work-related injuries. The rule applies to new injuries occurring on or after July 1, 2018. Yet in Pennsylvania, a workers' compensation drug formulary bill died in the House of Representatives after the full house vote resulted in a 98-98 tie. We'll continue to bring you late breaking news from the state legislatures, as the 2018 legislative session winds down.




The Congress moved during the first quarter of the year to fund the government through a $1.3 trillion spending bill. The omnibus bill restored funding for critical transportation programs, including $7.8 billion in new infrastructure spending for transportation-related activities. However, the specific infrastructure legislative package will not likely come before the Congress until after the mid-term elections.



The Federal Motor Carrier Safety Administration (FMCSA) is on the move with enforcement of its Electronic Logging Mandate. Commercial motor vehicle (CMV) drivers are expected to have a registered electronic logging device (ELD) or a grandfathered automatic on-board recording device (AOBRD) inside the power unit. If a property or passenger carrying driver is operating a CMV without one of the two options, he or she can be placed out of service and will face a civil penalty.

Making Our Way Around the Country



The Occupational Safety and Health Administration began its data collection and electronic reporting for 2016 incident reporting this year. OSHA expected more than 350,000 electronic incident reports related to the final Electronic Reporting Rule for 2016 injury and illness data. The agency reports that just 153,653 reports were submitted. Qualified employers must post 2017 by July 1, 2018. While the agency has indicated its intent to more aggressively pursue enforcement of the electronic filing this year, the Administration continues to cite overall privacy concerns and data security issues as a potential impediment to the full implementation of the electronic recordkeeping rule.



In related news, cybersecurity, breaches, and compromised data remain high atop the legislative and regulatory agenda this year. Beyond the front page hearings, the House Financial Services Committee is considering the bi-partisan "Data Acquisition and Technology Accountability and Security Act." The bill would establish, standards for data protection across various industries, impose federal post-data breach notification requirements, and establish a process that covered entities must follow to notify law enforcement, regulators, and victims following different types of data breaches. In response, 32 state attorneys general penned a letter urging Congress to avoid preempting state data breach and data security laws. Last month, South Dakota and Alabama became the 49th and 50th states to establish their states' own cyber-breach protocols. Both measures become effective on July 1, 2018.



Winter Storm Xanto reminded the upper Midwest this week that winter leaves on its own terms. This year has seen significant storm activity, with at least four major Nor'easters affecting the eastern seaboard, causing a $3 billion drain on the U.S. economy. This follows the 2017 hurricane season, which was so destructive that the names Harvey, Irma, and Maria will never be used again in the storm naming convention. This week, the journal Nature published a global study showing that the Gulf Stream is at its weakest strength in more than 1600 years. International meteorologists attribute a rising trend in hurricane, winter storm, and flooding activity to the weakened Gulf Stream. We are likely to see these debates surge this summer as Congress again considers the reauthorization of the National Flood Insurance Program, which is set to expire on July 31, 2018.



It was great to see so many of our readers, supporters, colleagues, and friends this week in San Antonio. Thank you for connecting with us. Are you still in the Alamo City at the RIMS Annual Conference and Exhibition? Drop us a line or please come see us at Booth #2137 in the Exhibition Hall. Until we connect again, we will be tracking the governmental affairs affecting the risk and insurance industry - from the big and bright, to the high and wide, all along the trail to the 2018 mid-term elections. We look forward to seeing you along the way!


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