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story.lead_photo.caption Rep. Jack Ladyman, R-Jonesboro, is shown in this file photo.

The state House of Representatives on Friday soundly rejected a workers' compensation bill that opponents said would help big business and insurance companies at the expense of injured workers.

Needing 67 votes for passage, House Bill 1955 received just 35, with 52 members voting against it, after 30 minutes of debate. Three members voted present. Ten members didn't vote.

HB1955 would have given a company, its workers' compensation carrier or a self-insured entity a "first absolute lien" to half of the financial judgment or settlement from a third party found liable for a worker's injury or death. The remaining half would go to the workers' comp beneficiary.

Its sponsor, Rep. Jack Ladyman, R-Jonesboro, and other supporters said the bill would give companies a better way to get reimbursed for medical expenses and payments to a beneficiary. Its backers included the Arkansas State Chamber of Commerce and the Arkansas Self-Insurers Association, whose members include some of the state's largest firms and employers.

Opponents said the bill would prevent an injured worker from being "made whole," especially in cases that involve a death or catastrophic injury, and would remove the ability of a workers' compensation judge to determine facts, including setting percentages of liability, on a case-by-case basis.

[RELATED: Complete Democrat-Gazette coverage of the Arkansas Legislature]

Because of a family emergency, Ladyman wasn't in the House on Friday and had Rep. Mary Bentley present the bill. Bentley said the bill would help keep workers' compensation rates in Arkansas competitive.

"I'm against this bill as much as I've been against anything in my life," said Rep. Doug House, R-North Little Rock. "It's immoral," he said.

Workers' compensation provides only two-thirds of an injured worker's pay, House said, adding that a revamp of workers' compensation law in 1993 prohibits an injured worker from suing an employer enrolled in the workers' comp program.

In cases where a third party is found liable, a settlement or judgment is a way for that worker to come closer to being "made whole," he said. "This bill turns the law on its head" and places companies ahead of workers in collecting payment, House said.

Even when the injured collects from a third party, that settlement or judgment goes before a worker's compensation judge to determine how, or if, the money would be divided, with the injured worker being first in priority, House said. That would no longer be the case if HB1955 became law, House said.

"This is a great bill if you're an insurance company," Rep. Jimmy Gazaway of Paragould said Friday from the House floor. "It's a terrible bill if you're an injured worker."

The Arkansas Workers' Compensation Commission was neutral on the bill, its chief executive officer, David Greenbaum, said last week.

HB1955 was Ladyman's second bill on the issue.

His initial effort -- House Bill 1650 -- was defeated twice, on March 12 and March 26, never getting more than nine votes from the 20-member House Public Health, Welfare and Labor Committee. Bills defeated twice generally are considered dead for the session, unless their sponsors are able to get two-thirds of the committee to expunge the earlier defeats.

From the House floor, Rep. Clint Penzo, R-Springdale, noted those defeats and said, "This bill absolutely makes no sense."

Rather than seeking an expungement after those defeats, Ladyman started all over again with a new bill and a tweak in language never sought by opponents.

HB1955 retained the "first absolute lien" language but increased the percentage -- from at least one-third to one-half -- that would be paid out to the beneficiary.

"HB1955 was just an effort to get a few more votes, to make it more palatable to members," Paul Byrd, a workers' compensation attorney in Little Rock who testified against HB1650, said this week by telephone. "The percentages were never an issue in the two meetings on House Bill 1650."

Byrd also noted that, without new Senate and House rules that removed bill-filing deadlines for this session, Ladyman wouldn't have been able to draft a new effort. (A filing deadline for regular bills this session would have been March 11; HB1955 was filed March 27.)

Three opponents had signed up to speak against the new bill in committee on Tuesday but never got the chance.

After a few minutes of discussion among committee members, Rep. John Payton, who was presenting the bill for Ladyman, made a motion to end debate. "I'm hungry," he said. "I'm ready for lunch."

Committee members approved the motion, voted 11-7 to move the bill to the full House, and broke for lunch.

Rep. Michelle Gray of Melbourne said Friday on the House floor that she regretted voting for the bill in committee.

"This is completely out of character for me. I was a 'yes' vote in committee. I said I was going to be a 'yes' vote on this bill [today]," Gray said, adding that she thought the bill should have been heard in the House Judiciary Committee and not the public health panel. "I was ill-equipped to handle this bill," she said.

"This bill absolutely gives the insurance company the ability to recover all their damages before our constituents get theirs," Gray said. "What happens if there's not enough money to even pay the insurance companies back? Our constituents get absolutely nothing."

Critics of of the original HB1650 included Rep. Josh Miller, a quadriplegic and member of the committee.

At the March 26 hearing, Miller said the bill would hurt workers' comp beneficiaries, especially those with catastrophic injuries. "I support the intent," he said. "They [companies] should get reimbursed. My concern is for the small percentage of people who end up in a permanent disability situation. You have one opportunity ... to get a settlement."

Ladyman's bill, he said, "has too many questions."

"I cannot in good conscience vote for something that is potentially going to take away from somebody with a permanent disability," Miller, a Republican from Heber Springs, said. In such cases, he said, "half a million dollars will evaporate quicker than a balloon in a hurricane." Miller didn't vote Friday on the bill.

"The real question to ask is, who do we want to put first, especially when there's not much money," Rob Beard, a Little Rock attorney who handles workers' compensation cases, said in one meeting, referring to third-party liability cases in which little money is available for collection. Examples, he said, included under-insured motorists who have the state minimum coverage of $25,000.

"If there's plenty of money, insurance companies should get money back," Beard said. But Ladyman's bill, he said, gives insurance companies or the self-ensured an "absolute" right to most of the money won in a third-party claim, with no regard to damages suffered by the injured or deceased.

The House can vote again on HB1955 only if two-thirds, or 67, of its 100 members expunge Friday's vote.

Business on 04/06/2019

CORRECTION: Rep. Jack Ladyman’s first name was incorrectly reported in an earlier version of this story. Sponsored by Ladyman, a Republican from Jonesboro, the bill needed 67 votes to pass. The number of necessary votes was also incorrectly reported.

Print Headline: House rejects workers' comp changes

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