 |
ARIZONA STATE SENATE
Fifty-Fifth Legislature, First Regular Session
workers' compensation; rates; firefighters; cancer
Purpose
Extends, to fire investigators, the firefighter cancer presumption of compensability and adds ovarian cancer and breast cancer to the qualifying cancer types. Modifies cancer presumption requirements relating to firefighters and peace officers. Allows an insurer to increase statewide rates and adjust premiums associated with firefighter and fire investigator presumption claims.
Background
The Industrial Commission of Arizona (ICA) administers workers' compensation laws and adjudicates workers' compensation claims. An injured employee, or a dependent of a deceased employee, is entitled to receive workers' compensation for an accident arising out of and in the course of employment, including an occupational disease (A.R.S. §§ 23-901 and 23-1021).
A disease, infirmity or impairment of a firefighter's health that is caused by outlined types of cancer and results in disability or death is presumed to be an occupational disease arising out of employment. The presumption also applies to peace officers if the peace officer's disease, infirmity or impairment is caused by certain types of cancer. To qualify for the presumption, a firefighter or peace officer must have passed a physical examination before employment, been assigned to hazardous duty for at least five years and documented an exposure to a known carcinogen that is reasonably related to the cancer. A presumption may be rebutted by a preponderance of the evidence that there is a specific cause of cancer other than an occupational exposure to a carcinogen (A.R.S. § 23-901.01).
A workers' compensation or employers' liability insurer (insurer) must adhere to the statewide workers' compensation insurance rates filed with the Director of the Department of Insurance and Financial Institutions (DIFI), except an insurer may file: 1) up to six uniform percentage deviations to adjust the statewide rate portion of the rating organization's rate filing; and 2) a subclassification rate-related rule that deviates from the rating organization rules or schedule rating plan. An insurer may not apply a deviation and a schedule rating to the same insured risk. If an insurer files more than one deviation, each must be consistent with underwriting rules based on criteria that lead to a logical distinction of potential risk (A.R.S. § 20-359).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Occupational Disease Presumption
1. Extends, to a fire investigator who meets the eligibility requirements prescribed for firefighters, the presumption that a disease, infirmity or impairment of health caused by the outlined cancers is an occupational disease arising out of employment.
2. Adds, to conditions presumed to be an occupational disease arising out of employment, any disease, infirmity or impairment of a firefighter's or fire investigator's health caused by ovarian cancer or breast cancer.
3. Removes the requirement, to qualify for the presumptions that an outlined cancer arose from employment, that a firefighter or peace officer:
a) be exposed to a known carcinogen reasonably related to the cancer; and
b) have informed the department of the exposure.
4. Raises the standard for rebuttal of the cancer presumptions to clear and convincing evidence, rather than a preponderance of the evidence, that there is a specific cause of the peace officer's, firefighter's or fire investigator's cancer other than an occupational exposure to a carcinogen.
5. Specifies that the presumptions that the outlined cancers arose from employment apply to firefighters, fire investigators and peace officers currently in service.
Insurance Rate and Premium Adjustments
6. Allows an insurer covering firefighters and fire investigators to increase the statewide rates under the rating organization's rate filing for class codes associated with firefighters and fire investigators by filing one uniform percentage deviation to address anticipated loss and expense increases for firefighter and fire investigator cancer presumption claims.
7. Allows an insurer to, in addition to filing a deviation, file and apply a schedule rating plan to adjust premiums associated with firefighters and fire investigators class codes based on loss control programs or activities the insurer undertakes to reduce losses associated with firefighter and fire investigator cancer presumption claims.
8. Specifies that the schedule rating plan for firefighters and fire investigators is in addition to and separate from any other available schedule rating plan.
9. Requires a schedule rating plan to be filed with and approved by the Director of DIFI.
10. Requires a deviation associated with firefighter and fire investigator cancer presumption claims to be on file with the Director of DIFI for at least 60 days before it becomes effective.
11. Requires a deviation filing to be accompanied by actuarial analysis that substantively illustrates the basis for the rate increase, including:
a) information made available by the ICA according to data-sharing requirements; and
b) the anticipated and, when available, actual combined loss ratio, claim frequency and claim severity associated with firefighter and fire investigator cancer presumption claims.
12. Requires supporting documentation to:
a) be sufficient to allow DIFI to assess the reasonableness of the insurer's assumptions and justification for the deviation; and
b) include data related to workers' compensation indemnity and medical claims and administrative expenses associated with presumptive coverage related to workers' compensation claims.
13. Allows an insurer to use data or analysis from:
a) the ICA;
b) the insured or the insurer;
c) self-funded employers providing workers' compensation;
d) a risk retention pool;
e) the assigned risk pool or assigned risk;
f) studies and information illustrating the frequency of cancer among firefighters and fire investigators;
g) other cancer-related statistics;
h) relevant incurred, unreported workers' compensation claims data; and
i) claims and expense data from other relevant lines of insurance such as long-term disability insurance, group or individual major medical insurance or long-term care insurance.
14. Allows the Director of DIFI to use independent contractor examiners to analyze the supporting justification of a requested deviation.
Information Sharing
15. Requires insurance carriers, self-insuring employers and workers' compensation pools securing workers' compensation for firefighters and fire investigators (insurers) to compile and report to the ICA claim and claim reserve information for cancer-related claims filed by or on behalf of firefighters or firefighter investigators.
16. Requires the ICA to compile and make available to insurers, rating organizations, employers and public safety workers the claim-related information to:
a) assist with setting workers' compensation insurance rates; and
b) ensure the adequate reserving for cancer claims for class codes associated with firefighters and fire investigators.
17. Requires cancer-related claim and claim reserve information to include:
a) the type of cancer;
b) total claim costs;
c) the claim reserved by the insurer; and
d) any other information requested by the ICA.
18. Prohibits the ICA from requiring or obtaining any personally identifiable information for a claimant.
Miscellaneous
19. Defines a fire investigator as a person who is employed full-time by a municipality or fire district and trained in the process of and responsible for determining the origin, cause and development of a fire or explosion.
20. Contains a legislative intent clause.
21. Makes technical and conforming changes.
22. Becomes effective on the general effective date.
House Action
MAPS 2/19/21 DP 14-0-0-0
3rd Read 3/4/21 59-0-1
Prepared by Senate Research
March 22, 2021
LB/kja