An insurance trade group's opposition to bills in the Connecticut legislature that would modify certain workers' compensation benefits is based on flawed estimates, a legislator suggested today.

State Rep. Kevin Ryan, D-Montville, who chairs the Labor and Public Employees Committee, made his comments concerning two measures that the American Insurance Association said would “add costs to the private-sector employment and state and municipal budgets, further burdening an already strained economy.”

The bills were voted out of committee on March 8 and sent to floor of the Senate, but Mr. Ryan said before they could move ahead they would have to get a study by the Office of Fiscal Analysis–which, he added, “may reflect a more realistic cost” than that projected by the National Council on Compensation Insurance.

Among the measures that have drawn AIA fire is Senate Bill 64, concerning awards for scarring.

Under current law, scarring awards are limited to permanent significant scars on the face, head or neck, or any other area of the body that handicaps the employee in obtaining or retaining employment. Senate Bill 64 would delete the limitations on scarring awards and make all permanent scars compensable.

Rep. Ryan said the NCCI estimated the cost for such awards would rise from $3 million to $20 million–which, he added, would be “pretty minimal for folks who have damage for their entire body.” Such injuries he said, “while they may not be visible, can still cause pain.”

Senate Bill 255 would increase potential permanent partial disability benefit payments. AIA said Connecticut PPD awards already are high and well above the national average.

According to AIA, in addition to a huge benefit increase, the legislation would create disincentives for injured workers to return to the job in a timely and appropriate manner, as well as increase the number of disputes within the system and costs associated with those additional disputes, such as attorney fees and medical/legal expert costs.

Mr. Ryan said this would only happen if everyone eligible to get an extension took it, adding that it only applied to the most extreme cases.

“Enactment of these bills would be counterproductive to the interests of the state,” said Laura Kersey, AIA's Northeast assistant vice president, in a statement. “They would undermine the very successful workers' compensation reforms the state of Connecticut enacted in 1993.”

Prior to the 1993 reforms, she said, Connecticut had one of the most expensive and inefficient workers' comp systems in the nation. Average benefit costs per covered worker in 1991, for example, were more than 35 percent higher than the nationwide average, she noted.

Between 1982 and 1991, according to Ms Kersey, average benefit costs in Connecticut increased 250 percent–more rapidly than in any other state during that time, and 84 percent more rapidly than average costs nationwide.

“Connecticut's workers' compensation cost situation has improved significantly from the pre-reform era, but the state's costs remain higher than average costs around the country,” she said.

Ms. Kersey also criticized Senate Bill 5626, which she said would destabilize Connecticut's workers' comp system by negating the exclusive remedy protection that settles worker injuries without lawsuits.

According to her analysis, the bill would allow the injured worker to bring a civil action against the workers' comp insurer for alleged breach of good faith and fair dealing in the administration of claims.

“There is no justification for departing from the exclusive remedy where the claimant's attorney drafts a complaint to allege inappropriate claims handling,” said Ms. Kersey.

Senate Bill 5626, she added, is “an unjustified attack on the commissioner of insurance's jurisdiction to review, investigate and sanction, where appropriate, instances of insurer misconduct.”

She concluded that the state's General Assembly “should seek alternatives to further improve upon the savings already achieved by the reforms, and continue to seek ways to place Connecticut's costs more in line with workers' compensation costs in other states.”

Special Reports /

Connecticut Comp Bills Draw AIA Fire

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