The Committee on Commerce and Labor was called to order at 3:00 p.m., on Friday, May 21, 1999. Chairman Barbara Buckley presided in Room 4100 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Ms. Barbara Buckley, Chairman

Mr. Richard Perkins, Vice Chairman

Mr. Morse Arberry, Jr.

Mr. Bob Beers

Mr. Joe Dini, Jr.

Ms. Chris Giunchigliani

Mr. David Goldwater

Mr. Lynn Hettrick

Mr. David Humke

Mr. Dennis Nolan

Mr. David Parks

Mrs. Gene Segerblom

COMMITTEE MEMBERS ABSENT:

Ms. Merle Berman

Mrs. Jan Evans

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

Chairman Buckley explained two hearings had previously taken place on the bill. She expected there would be recommended amendments to the bill. It was her intention to hear the amendments first, followed by public testimony on the amendments. She also intended to have the committee vote on the bill.

Pete Ernaut, Chief of Staff, Office of the Governor, expressed support for the bill. The intention had been to privatize the state worker’s compensation system. He wanted to address the loss of benefits to Nevada’s workers and the increasing need for consumer protection in the health care industry. Mr. Ernaut felt the bill brought together the best recommendations between all the bill’s affected parties. He stated Nevada’s workers had lost benefits due to the continual changes in the state’s workers compensation system. Approximately one-third of those benefits would be restored with passage of S.B. 37. Mr. Ernaut said there would be an increase in partial permanent disability awards and vocational rehabilitation. In addition, the burden of proving a preexisting condition would be moved from the worker to the insurer. The bill also mandated disclosure of medical records. Mr. Ernaut said the traditional problem with preexisting conditions stemmed from the insurer’s lack of information about the worker and increased litigation. The new language would allow for better service and decreased litigation.

Next, Mr. Ernaut outlined the new cabinet position created by S.B. 37. The appointee would serve at the pleasure of the governor and would be appointed by the governor. The new director would oversee the Office of Consumer Health. That office would provide dispute resolution and a forum for grievances to move health care problems away from the bureaucracy. Section 129 outlined the responsibilities of the governor to protect employees of the Employers Insurance Company of Nevada (EICN). In addition, section 20 moved all currently classified state employees in the agency to unclassified positions. He acknowledged the employees would remain classified if the triggering events outlined in section 129 did not come to fruition. That would allow greater job protection for current employees.

Chairman Buckley suggested all panelists presenting amendments for the bill testify before committee members asked questions. She asked if Mr. Ostrovsky had prepared a copy of the amendments he was proposing to the committee.

Bob Ostrovsky, lobbyist for the Nevada Resort Association, presented those amendments (Exhibit C). Mr. Ostrovsky went over the proposed language, which had not been formatted as an amendment, but simply as a list. Section A discussed vocational rehabilitation and made various changes to rights of out-of-state claimants, maximum length of rehabilitation, and wages paid for temporary jobs. Mr. Ostrovsky stated vocational rehabilitation was an expensive portion of the state’s worker’s compensation budget. The state spent as much as $80 million per year at one time. The changes proposed by Section A of the handout took the current structure and added more funds. He said there was a buyout procedure in place, where employees could get the cost of the program issued to them, then choose whether or not to participate in the program.

Mr. Ostrovsky said problems arose when residents of California, Utah, and Arizona were injured on the job in Nevada. They were not allowed to receive benefits in their home state because they were working in Nevada. The change in the bill would allow a resident within 50 miles of the Nevada border to make a workers compensation claim in Nevada or their state of residence. Under current law, vocational rehabilitation claimants had to come into Nevada to receive their benefits. Mr. Ostrovsky gave an example of a temporary steelworker to show how it was difficult for some people injured in Nevada to receive treatment if they lived far away. The law would change after passage to allow claimants to receive treatment in their home state if they were temporary employees and could prove residence outside Nevada at the time of the injury. He said all the changes to vocational rehabilitation were built around existing law. The changes made longer terms for benefits possible and addressed problems with residency and temporary positions.

Section B of the handout included suggested changes to the permanent partial disability benefits. The first change would be to move the multiplier back to .6. The current multiplier was .54, moved there in 1993 from the original .6. The next change specified the insurer to only deduct the amount previously paid to the claimant. The stipulation referred to a person with a second injury, because if two injuries occurred under current law, the claimant may have to give money back to the insurer for exceeding the permanent total benefits. In addition, the stipulation applied to all open permanent disability claims. Section B also made the Department of Industrial Relations responsible for choosing a doctor if the insurer and claimant could not mutually agree on a physician to establish a rating. The final change to permanent partial disability allowed claimants to get a second opinion for a different disability rating. However, if the second opinion did not change the rating by more than 1 percent, the Department of Industrial Relations could argue against paying for the second doctor.

Section C discussed preexisting conditions. It required the injured claimant to prove the injury aggravated an existing condition. The insurer then had to prove the injury was not a contributing cause of the condition. Section D included language to shift the burden of proof from the claimant to the insurer. He said it had been difficult to define "substantial contributing cause" in the legislation. It did not mean primary cause or factor; it meant the cause was less than primary but still contributing to the injury. Mr. Ostrovsky said each case would be individually evaluated to determine the substantial contributing cause. In addition, the medical records of the claimant would be available for examination by the insurer in an attempt to locate preexisting conditions.

Mr. Nolan asked if the insurer could look for any information on an individual or if the information had to be specific to a certain preexisting condition.

Mr. Ostrovsky replied the insurer would be able to get better information under the new law than in the past. He said the problem had been the insurer did not know where to look for the medical records. The new provision allowed for more investigation. He reiterated each case would be evaluated individually. Mr. Ostrovsky said he wasn’t sure how the investigations would work but felt any change was a big improvement.

Mr. Ostrovsky referred the committee back to the amendment he submitted (Exhibit C). He said unresponsive administrators had been a problem in the state’s industrial insurance system. The amendment proposed administrative fines remain the same, while benefits penalties would be increased. Current penalties ran from $1,000 to $10,000, and the new penalties would range from $5,000 to $25,000. He felt stiffer penalties would foster better insurer administration. The Department of Industrial Relations determined the individual penalties, but Mr. Ostrovsky said it was important to give legislative guidelines. To accomplish that, factors had been established such as the number of previous violations and severity of those violations. Another factor in determining the size of the penalty was the insurer’s timeliness for payment to the claimant. If the claimant was deceased, the benefits would be turned over to the estate. Under current law, benefits were not paid if the claimant was deceased.

Section G dealt with mandatory drug testing as mandated in chapter 652 of the Nevada Revised Statutes (NRS). Under current law, drug-testing centers had to be licensed by particular associations to perform claimant drug tests. The change in law would allow any laboratory licensed by under NRS chapter 652. Finally, section H changed the administrative claim closure procedure. The intent was for the claimant to be notified when the claim would be closed and allow the claimant to appeal closure.

Danny Thompson, representing the Nevada American Federation of Labor-Congress of Industrial Organizations (AFL-CIO), testified on behalf of the bill. He stated employers and employees had paid considerable amounts to repay debt incurred by industrial accidents. He supported the amendments proposed by Mr. Ostrovsky, although they did not guarantee all benefits to all workers. The bill did, however, solve many problems within the current industrial insurance system. The legislature agreed to a three-way system that allowed private carriers to compete with the state system. The new system would protect injured workers and stabilize the funds in public industrial insurance. He urged the committee to support S.B. 37.

Leonard Ormsby, general counsel for the Employers Insurance Company of Nevada, submitted specific language for two of the amendments alluded to by Mr. Ostrovsky (Exhibit D). The first page referred to the newly created Office of Consumer Health Assistance. That office would consist of three workers compensation ombudsmen and their support staff. The second page dealt with language for section 20 of the bill. The provisions protected and declassified current employees of the EICN. Mr. Ormsby stated for the record Ms. Wilcox’s previously suggested amendment would not be put into the bill.

Chairman Buckley submitted her proposed language for the ombudsmen amendment (Exhibit E). She was concerned about having an ombudsman to assist claimants in the new managed care environment of privatized industrial insurance. In the original language of S.B. 37, the three ombudsmen positions in the EICN were eliminated. The amendment would retain those three positions and stipulated their job functions, qualifications, and responsibilities. The amendment created a cabinet position for the Office of Consumer Health Assistance. The appointee was required to have a medical background to be considered for the position. The ombudsmen would respond to written and telephone inquiries from consumers and injured workers with regard to health care questions and problems; assist consumers and injured workers in understanding their rights; identify, investigate, and resolve complaints made by patients and injured workers and assist with appeals; and perform any other function assisting health care consumers and injured workers. The existing ombudsmen positions in the EICN would be transferred to the Office of Consumer Health Assistance, and their equipment and supplies would also be transferred. A Department of Industrial Relations assessment would continue to provide funding for the ombudsmen in the office.

In addition, the Office of Consumer Health Assistance would be able to assist all patients of managed care organizations. The budget for that function was still under consideration. The office would provide information to consumers about possible courses of action toward negligent health care providers. The office would be comprehensive, covering both injured workers and all other patients with health care plan problems.

Mr. Ernaut suggested Mr. Ostrovsky and Mr. Ormsby cover the effective dates of the proposed legislation.

Mr. Ormsby stated the hiring freeze would be lifted for state employees effective June 1, 1999. In addition, the EICN agreed to postpone any layoffs until October 1, 1999.

Mr. Ostrovsky said the new vocational rehabilitation benefits would not become effective until October 1, 1999. Since a new benefit package was being compiled, it required a new insurance rating. He testified new ratings usually took 12 months to evaluate. The intent was to reduce that time by 6 months. The insurance commissioner had committed to getting the new rating within that time and providing them to the insurance carriers.

Chairman Buckley said several concerns had arisen after the previous hearing. One of those was the difficulty of laid off EICN workers in finding another job within the state. She wondered if they would have to complete another probationary period.

Mr. Ernaut replied state personnel rules stipulated all employees must complete another probationary period if transferring to another state position. The governor’s office was not opposed to waiving the probationary period for EICN transfers.

Chairman Buckley also had a concern about buying up to 5 years of credit in the Public Employees Retirement System (PERS) for EICN employees. She wanted to know what would happen if the worker already had purchased PERS credits and if the additional credits supplemented their savings.

Mr. Ormsby said the sponsors of the bill had been working with several state agencies, including PERS, the Department of Personnel, and the Department of Employment, Training and Rehabilitation. He understood the 5 years of PERS credits was a requirement and could not be waived or modified. If an employee had already purchased 5 years of credits, he could not purchase any additional time.

Chairman Buckley expressed her desire to include those credits in any amendment and work with the bill drafters. She was concerned because forward-thinking employees were penalized for purchasing credits while they were employed.

Mr. Ernaut expressed the governor’s desire to work with Chairman Buckley on that language.

Mr. Humke asked if the Office of Consumer Health Assistance would have authority to conduct lobbying activities.

Mr. Ernaut responded there had been no intent for the office to have a lobbying function. The intent was to provide dispute resolution and consumer protection. He said there had never been an opportunity to provide an ombudsman for health insurance, unlike many other regulated industries. The ombudsmen would be responsible for assisting and directing health insurance customers. The office was intended to be high profile.

Mr. Humke asked if the office would have its own set of bill draft requests.

Mr. Ernaut said it was not the intention to give the office its own requests since the office would operate within the Office of the Governor, similarly to the Nuclear Projects Office. The head of the Office of Consumer Health Assistance would report directly to the governor and be administrated by the chief of staff. He expected the governor’s office to provide far fewer bill drafts in the next legislative session.

Mr. Humke asked if the bill’s sponsors wanted to restrict the head of the office to a medical professional, as recommended by the Chair. He thought insurance professional might be just as effective in the position, as would an attorney.

Mr. Ostrovsky said there had been a continuing position within the insurance commissioner’s office to assist consumers with insurance matters. The problem was the Office of Consumer Health Assistance was not to help with insurance, but with health care. Insurance professionals did not know a lot about health problems and did not have a medical background. The intention was to provide a new service and meet the needs of currently unserved health care consumers.

Chairman Buckley was concerned because so many of the problems with health care lay in medical necessity. Medical necessity was such a broad term it had been open to argument between physicians, patients, and health insurance providers. Insurance providers were overruling physicians in some cases as to the medical necessity of a patient’s care, without having a medical background. The intent was to have a focus on health care, rather than insurance or litigation.

Mr. Ernaut added there were four positions in the Office of the Attorney General to investigate patient insurance fraud. The medical background required for the head of the office would make it an advocacy position and office in nature.

Ms. Segerblom commented the legislature received many phone calls from Nevadans with health care issues.

Mr. Ernaut responded the governor’s office received just as many calls, if not more. He stated the office received upwards of 100 calls per week.

Ms. Giunchigliani asked the sponsors to explain the issue of preponderance. She wondered about the terminology and the standard for determining preponderance.

Mr. Ormsby replied preponderance was the lowest threshold in the law.

Ms. Giunchigliani referred to section D, paragraph B of Mr. Ostrovsky’s amendment (Exhibit C). She asked what the word "precipitated" meant in the context of preexisting conditions and additional injuries.

Mr. Ormsby said the language existed in current statute. It had been discussed in several published decisions. It was difficult to separate precipitate, aggravate, or accelerate in the language.

Ms. Giunchigliani asked about the cap of two-thirds of a claimant’s salary. She wanted to know if it had been adjusted.

Mr. Ormsby answered the temporary total disability had been settled at 66 and two-thirds of the average wages as a net dollar amount.

Ms. Giunchigliani asked if the average wage amount had been raised or if the maximum wage amount had been capped.

Mr. Ormsby said the maximum wage amount had been capped for two years, then increased.

Ms. Giunchigliani wanted to know about the standard of "reasonably related" in reference to preexisting conditions. She was referring to section F of Mr. Ostrovsky’s handout (Exhibit C). Ms. Giunchigliani expressed a desire for confidentiality of claimant’s medical records.

Mr. Ostrovsky stated language was already in place to allow access to medical records. He agreed it was inappropriate to examine records for conditions unrelated to the industrial injury.

Ms. Giunchigliani asked if Mr. Ormsby had a comment on assets.

Chairman Buckley said there had been no previous discussion on assets. She had received many calls from individuals concerned about various programs.

Douglas Dirks, Chief Executive Officer of the EICN, said the trust assets included monies paid for workers compensation. Those assets would transfer into the new company, including the capitol complex facilities in Carson City, the Jean Hannah Clark facility and another office building in Las Vegas.

Ms. Giunchigliani asked why those assets could not remain with the state. She understood the assets were paid for with employers’ premiums, but she felt that money was intended for Nevada’s workers. She suggested they could be loaned to the new company, but still kept under the state’s ownership.

Mr. Dirks said the assets would be transferred. The EICN was allowed, under current statute, to sell those assets at fair market value. He hoped to keep utilizing the facilities and open them up for further use by the new company to benefit the injured workers of Nevada.

Ms. Giunchigliani commented that goal could still be accomplished by loaning the buildings to the new company, rather than transferring them.

Chairman Buckley asked if competing insurance companies would be able to use the facilities.

Mr. Dirks replied part of the facilities would be used for community outreach. Especially the Jean Hannah Clark facility, which had been previously underutilized, would be used for community programs like cardiac rehabilitation, which were not currently available.

Mr. Ernaut pointed out it was traditional business practice to have assets and liabilities travel together. If the assets of the EICN were separated from the liabilities, there would be several problems. He said the intention was to reduce liability for the state. It was not advisable to retain the assets because they were the property of the EICN and paid for by premium dollars.

Mr. Nolan understood and agreed with Mr. Ernaut’s statement. He asked Mr. Dirks what would happen if EICN failed. He wanted to know what would happen to any surplus assets under that situation.

Mr. Dirks responded if the private company holding the assets encountered financial problems, it would be subject to all the rules applied to any other insurance company. The insurance commissioner could seize the assets of the company and subsequently rehabilitate or liquidate the company.

Mr. Beers said he was a 10-year ratepayer in the state’s industrial insurance system. He intended to continue by using the new company as his insurance carrier. Mr. Beers would be upset if the assets funded by his premiums were taken from his insurance company without compensation.

Mr. Hettrick had a question about the effective dates. He was concerned the rate filing was not available to tell the new insurance carriers what they could charge. He said the rates would not match the benefit effective date of
October 1.

Mr. Ernaut said a refiling for the new rating would take about 6 months. Without a refiling, insurance companies would be operating without enough premiums.

Alice Molasky-Arman, the Commissioner of Insurance, said she intended to request a new rate filing as soon as the amendment was adopted. The rating agency had already indicated an ability to have the new filing within the 6-month deadline.

Mr. Hettrick asked if there would be any impact on the self-insured employers.

Ms. Molasky-Arman said the self-insured groups filed annually, and had to file an actuarial review to validate the assessments charged to their members. The time period was similar to the private carriers, and she thought it corresponded with when the self-insured group was originally certified. The self-insured groups could refile for their rating at any time. The 6-month time period given to the state’s new private insurance company would be the same time period given for the self-insured groups.

Mr. Hettrick asked if an unexpected financial burden would then be placed on the self-insured groups because of the refiling. He wanted to know how significant the cost would be to those groups.

Ms. Molasky-Arman said they would be required to refile anyway.

Mr. Hettrick asked if they filed now, would the groups be forced to refile again at the end of the normal year. He wondered if their filing requirements would be inadvertently doubled.

Eloise Koenig, Self-Insurance Coordinator for the Division of Insurance, said the self-insured groups were not required to file at any specific time. If they refiled in light of the new benefit requirements, they would not have to refile. However, they would need to file an actuarial review with the division. She said most of the groups carried a surplus, and should be able to carry a small increase with no problem.

Mr. Beers understood the premiums paid by employers went into a separate account. Out of that account, benefits were paid to injured workers and the administration of the program was funded, including any capital improvements. General fund money was never used to pay for the buildings or other assets owned by the EICN.

Chairman Buckley agreed, adding the account was a trust fund.

Mr. Beers said in a business sense, it would be most simple to compile every asset from that separate system and move it to the new entity.

Chairman Buckley pointed out there was also a responsibility to the workers, because they had given up higher wages and the ability to sue for development of an industrial insurance system. The system was a balance, because both employers and employees gave up rights and privileges to provide no-fault insurance.

Mr. Beers did not feel workers would be giving up anything they put into the system, because their new insurer would be part of that same no-fault process. Workers would continue to receive the insurance services they needed.

Chairman Buckley said the employers who chose not to remain with the privatized EICN would not have access to the assets of the state system like the Jean Hannah Clark facility. She was concerned because some injured workers would not get the community resource benefits of the new EICN because their employer chose not to participate. Chairman Buckley acknowledged they would still receive workers compensation benefits. She was also concerned about the loss of those assets if the privatized EICN were to fail.

Mr. Beers hoped the new company formed by the privatization of EICN would charge rent to other companies using the facilities.

Mr. Ernaut said the effect of privatization would lead to greater competition in many services. He anticipated many community resources would be opening up to compete with the new company created from EICN.

Ms. Giunchigliani suggested a real privatized company needed to get its own offices and facilities to be competitive. She said the privatized company would be given an advantage over other companies. She felt the facilities were a state asset and wanted to explore a possible sale.

Mr. Ernaut said the competitors already had facilities. There would not be a rush of new enterprises coming into the state to set up industrial insurance agencies. He said the privatized company would have a competitive disadvantage if the assets were taken away.

Ms. Giunchigliani wanted to know what guarantees were present in the system and which companies would choose to reinsure. She asked which companies would be bidding.

Mr. Dirks responded the EICN was still negotiating the details of those agreements. He assured the committee major insurers were interested in entering the agreement, and the negotiations had been going on for several months. Some primary insurers had not been interested, but he said there were very high quality reinsurers who were interested.

Chairman Buckley wanted to clarify no one lobbying on behalf of the bill had entered into those negotiations.

Mr. Dirks replied no one was participating to the best of his knowledge.

Mr. Ernaut interjected the reinsurance transaction was required before privatization could take place. One of the triggering events for privatization included reinsurance.

Mr. Hettrick said when private insurance carriers exchanged their revenue for exclusive remedy they did not give up their assets. The money held in trust for the injured worker was simply that—money held in trust. When capital was needed for expanded facilities, the premiums were raised accordingly. He contended the assets belonged to the EICN and were paid for by the ratepayers.

Mr. Ernaut added S.B. 37 was a victory for consumers for protection at the cabinet level of government. The bill was also a victory for taxpayers, because it eliminated a huge liability from the state. At the same time, workers compensation benefits had been increased. Labor organizations, businesses, and workers all supported the bill. He said the governor appreciated the hard work of the committee and the Chair on the bill.

Chairman Buckley appreciated Mr. Ernaut’s efforts to pass the legislation as well.

Robert Gagnier, Executive Director of the State of Nevada Employee’s Association, expressed his support for the bill as amended. Mr. Gagnier addressed the issue of reemployment rights and probationary status. The bill provided for reemployment of probationary employees, which was not in current law. All the employees of the EICN were allowed to take their status with them, probationary or not.

Chairman Buckley asked where that provision was located in the bill.

Mr. Gagnier answered the law was in place in Nevada Administrative Code (NAC) chapter 284. He urged the committee to remember that provision did not ensure reemployment rights for probationary employees. Mr. Gagnier also addressed the practice of buying credits from PERS. The EICN general counsel had referred to NRS 286.300 to authorize purchase of 5 years. He did not think it would be possible to change that statute by recommendation from the governor’s office only. He suggested amending NRS 286.300 to allow special rights for purchase of PERS credits, similarly to the amendment of NRS 284 for reemployment.

Mr. Parks said when employees were first hired they were placed in a probationary period. After completion of probation and transfer, they enter into a "qualification" period. He asked if that provision would apply to EICN employees.

Mr. Gagnier said when a permanent employee transferred to a new department they did not have to serve a probationary period. If the employee was promoted to a higher level position they served a new probationary period in that level; however, the employee retained restoration rights to the former position.

Mr. Parks asked if any employees had already entered into a purchase agreement program with PERS.

Mr. Ormsby responded the question was not academic, because the question had been asked on the company’s internet a few times. He was concerned whether or not there would be consequences for the PERS retirement plan, which was approved by the Internal Revenue Service (IRS). He did not know if the tax status of the PERS system would be adversely affected if the rules were changed for EICN employees. He did not know if a change in statute would be adequate.

Mr. Beers asked how seniority applied to the layoffs of EICN employees.

Mr. Gagnier responded a definition was included in NAC 284. Seniority was applied to each job class, then job series and time on the job with satisfactory evaluations. The computation was actually very simple to make.

Mr. Beers clarified the seniority would be calculated based on existing rules.

Mr. Gagnier replied the amendment proposed by Mr. Ormsby removed the layoff section as applied to EICN employees effective July 1. The existing layoff regulation for EICN in NAC 284 would apply until it became a private company. Then, the four triggering conditions would have to be met for more layoffs to occur.

Mr. Ernaut told a short story about a man who went into a place of "ill-repute" to perform some business. When the madam showed him the three ladies of the night from which he could choose, he asked if the shop was union. The madam replied that it was, and asked him to choose. There was a buxom blonde, a redhead, and a large woman called Helga who wore a mumu. The man chose the blonde. Unfortunately, the madam told him he could only have Helga, because she had seniority.

Kara Kelley, representing the Las Vegas Chamber of Commerce, expressed the chamber’s support for the bill and the amendments. She urged the committee to do so as well.

Chairman Buckley asked Mr. Dirks to discuss what may happen to buildings owned by EICN if the company was to fail after privatization.

Mr. Dirks replied the state would be given a right of first refusal if the EICN ever decided to sell the properties in the capitol complex. He offered to extend that right to all property currently held by EICN.

Ms. Giunchigliani clarified the state would have right of first refusal to buy back its own property at full market value.

Mr. Dirks said the state would be buying back EICN property, not property owned by the state.

Mr. Goldwater asked if Mr. Dirks considered removing the exclusion of the premium tax for policies of reinsurance. Mr. Dirks said the thought was never considered during the transaction. Mr. Goldwater asked if the provision should be removed in the bill to allow for a premium tax. Mr. Dirks responded it could significantly increase the cost of the transaction and may not be economically viable.

Chairman Buckley asked Mr. Ostrovsky a technical question about his amendment (Exhibit C). On the bottom of the first page, there was a request for amendment of subsection 2 of NRS 616C.175 and section 20 of A.B. 326. She did not see section 20 in A.B. 326 and asked if a correlating reference was available.

Mr. Ormsby said those were the correlating chapters in NRS chapter 617 for preexisting conditions and occupational disease.

Chairman Buckley reiterated there was no section 20 in A.B. 326.

Ray Badger, representing the Nevada Trial Lawyers Association, stated the reference was for the original version of the bill. The amended version moved those provisions to a different section.

Crystal Lesbo, Committee Counsel, said in the first reprint version of the bill, the amendment would correspond to section 4 and section 17.

Chairman Buckley wanted to clarify the effective date for benefits restoration.

Mr. Ostrovsky stated the effective date would be no later than January 1, 2000.

Chairman Buckley said she would entertain an amend and do pass motion, with the amendment containing Mr. Ostrovsky’s suggested language (Exhibit C), including clarification on section 20 of A.B. 326 and an effective date of not later than January 1, 2000. The amendment would also contain her suggested language on the ombudsman consumer protection function (Exhibit E) as well as the triggering mechanism and employee clarifications suggested by Mr. Ormsby (Exhibit D). Chairman Buckley wanted to include language to protect the employment status of employees transferring out of EICN. She also suggested language included to amend NRS chapter 326 to allow EICN employees who had purchased previous credits in PERS to be able to purchase the additional 5 years, unless the provision would bring adverse tax consequences to PERS.

Chairman Buckley asked Mr. Ostrovsky to clarify the effective dates for vocational benefits. She wanted to know if it would be the date of injury, or the date of receipt of benefits.

Mr. Ostrovsky said the effective date would be when the injured worker received the right to vocational benefits, regardless of the date of the injury.

Chairman Buckley then asked him to clarify the effective date of other benefits, not including vocational rehabilitation.

Mr. Ostrovsky stated calculation of the permanent partial disability awards would be made at the time of payment. If the payment was made after the increased benefits were in place, the injured worker would be entitled to them. The date of injury would not matter.

Mr. Ormsby clarified the amount of benefits was established on the date of injury. For vocational rehabilitation benefits, there would be an exception in the law to allow increased benefits upon receipt, and not base those benefits on the date of injury. All the other benefits relied on the date of injury as the effective date.

Mr. Ostrovsky recalled that to be the arrangement and stated vocational rehabilitation was the exception to most injured worker benefit rules.

The meeting of the Assembly Committee on Commerce and Labor was adjourned at 5:00 p.m.

RESPECTFULLY SUBMITTED:

Kelly Gregory,

Committee Secretary

APPROVED BY:

Assemblywoman Barbara Buckley, Chairman

DATE: