Generally revise workers compensation laws
The proposed legislation aims to dissolve the current state-operated workers' compensation fund, transferring its responsibilities to private insurance entities. This dissolution is expected to reduce the state's financial liabilities associated with old fund claims, especially those incurred before July 1, 1990. The proponents of the bill argue that modernizing the system will not only mitigate risks for the state but also enhance the flexibility and efficiency of the workers' compensation market in Montana. By enabling a more competitive landscape, the bill intends to drive down insurance premiums for businesses, with an expected influx of funds generated from premium taxes.
Senate Bill 556, titled the 'Montana Workers' Compensation Modernization Act,' seeks to overhaul the existing framework of workers' compensation insurance in Montana. The bill proposes the establishment of a residual market program designed to ensure that all employers, particularly those unable to secure coverage in the voluntary market, can obtain necessary workers' compensation insurance. This move is positioned as a way to enhance competition among insurers, ultimately aiming to lower costs and improve the availability of coverage for employers, thereby protecting employees' rights and benefits.
While supporters advocate for the modernization efforts, critics express concerns regarding the risks of privatization. They caution that erasing state financial oversight could lead to potential inadequacies in worker protections. Furthermore, there are apprehensions about the transitional phase where open claims will still be handled under the old system while new ones are managed by private insurers. Stakeholders worry that this bifurcation might create confusion and could place additional burdens on injured workers seeking timely benefits.