PRIOR PRINTER'S NO. 3605 PRINTER'S NO. 4082
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
AS AMENDED, HOUSE OF REPRESENTATIVES, JUNE 15, 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
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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 JANUARY 1, 2005. <--
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