Pending Laws Would Revisit the ‘NIGHTMARE’ of 1992

FOR IMMEDIATE RELEASE: Wednesday, April 3, 2019

MEDIA CONTACT: Julie Rabinowitz, Director of Policy and Communication, 207-292-2722 ext. 102, Julie@mainepbp.com

AUGUSTA — Maine People Before Politics has issued an analysis of sixteen bills pending in the Legislature. The bills attempt to roll back the critical Workers’ Compensation system reforms put in place in 1992 after years of crisis in the system left Maine on the brink of having no coverage for employers and, more importantly, their employees.

The pending legislation could have a disastrous effect on Maine’s economy.

“After nearly 30 years of stability, many people may not fully recall the dire situation of Maine’s Workers’ Compensation system during the late 1980s and early 1990s,” stated Julie Rabinowitz, Director of Policy and Communication for Maine People Before Politics.

“Several liberal legislators have proposed bills that would roll back the reforms of 1992—reforms that were based upon the best practices of other states and that have created an efficient and effective system. Currently Maine strikes the right balance between protecting workers, incentivizing safety, getting injured workers back to work, and keeping costs low,” she continued.

A New York Times article written contemporaneously to the crisis provides important background information for policymakers and paints a dark and stark picture for those who need a refresher on what Maine faced in 1992. “The collapse could be devastating to local employers, many of which say they would have to close without the protection that workers’ compensation provides them when employees are injured. And Maine’s situation provides a nightmare vision to insurance regulators nationwide, as workers’ compensation systems in more than a dozen other states watch costs spin out of control and insurers incur record losses,” wrote the New York Times.

Under Governor McKernan’s leadership, Maine made major strides by putting aside differences, reviewing what worked in other states, and making changes which helped stabilize and protect Maine’s economy.

The system was reviewed by a 12-member panel of employer and employee representatives as recently as 2012 and the results of that report led to some additional bipartisan legislation and was signed into law by Governor Paul R. LePage.

“Our analysis shows that not only do many of these current bills seek to return parts of the Workers’ Comp system to the poor policies that created the disaster in the first place, some bills seek to remove even the few restraints on the system that existed prior to 1992,” said Rabinowitz.

“The result will not only be rising costs for employers, but less worker protections when employers turn to misclassifying employees as independent contractors to avoid paying for the workers’ comp insurance. The system we have now in Maine offers employers choices in coverage, helps employers provide safer workplaces, assists injured workers with wage replacements and helps the vast majority of workers return to work in the same job quickly or a different job making comparable wages.” Rabinowitz stated.

“Maine People Before Politics has reviewed the current proposals in light of these reforms. We only recommend one bill as Ought To Pass. In addition, we offer meaningful policy recommendations that would benefit workers and do not impose substantial or retroactive costs on the system. Beyond these proposals, we believe the bills are burdensome to workers, employers or both; poorly written; duplicate current law; make Maine an outlier among state Workers’ Comp systems; or impose too great a cost on the system that would eventually lead to more workers being misclassified as independent contractors. We are all sympathetic to the plight of injured workers, but policymakers must be objective when looking at public policy to ensure the widest protections are made available to Maine workers,” added Rabinowitz.

Rabinowitz summarized: “These ill-conceived proposals would dismantle our Workers’ Compensation system, wreaking havoc for employees, employers and our economy.”  

MPBP’s recommendations and a one-sheet summary are available on our website.

The records for the 1992 Blue Ribbon Commission on Workers’ Compensation are available from the Maine State Law and Legislative Reference Library, including Ernst & Young’s Actuarial Report on the Evaluation of Workers’ Compensation Law Changes, which reviews the expected system cost reductions of the specific reforms being recommended by the Blue Ribbon Commission.

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