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Introduced Version Senate Bill 395 History

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Senate Bill No. 395

(By Senators Wills, Klempa, Tucker, Miller, Snyder, Yost, Kessler (Mr. President) and Plymale)

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[Introduced January 24, 2012; referred to the Committee on the Judiciary.]

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A BILL to amend and reenact §23-1-1a of the Code of West Virginia, 1931, as amended, relating to rules promulgated by the Workers’ Compensation Board of Managers; and providing that these rules are subject to the legislative review process.

Be it enacted by the Legislature of West Virginia:

    That §23-1-1a of the Code of West Virginia, 1931, as amended, be amended and reenacted to read as follows:

ARTICLE 1. GENERAL ADMINISTRATIVE PROVISIONS.

§23-1-1a. Workers' Compensation board of managers; appointment; composition; qualifications; terms; chairperson; meetings and quorum; compensation and travel expenses; powers and duties.

    (a) On October 1, 2003, the compensation programs performance council heretofore established in article three, chapter twenty-one-a of this code is hereby abolished and there is hereby created the "Workers' Compensation board of managers", which may also be referred to as "the board of managers" or "the board".

    (b) (1) The board shall consist of eleven voting members as follows:

    (A) The Governor or his or her designee;

    (B) The Chief Executive Officer of the West Virginia Investment Management Board; if required to attend more than one meeting per month, he or she may send a designee to the additional meetings;

    (C) The Executive Director of the West Virginia Development Office; if required to attend more than one meeting per month, he or she may send a designee to the additional meetings; and

    (D) Eight members appointed by the Governor with the advice and consent of the Senate who meet the requirements and qualifications prescribed in subsections (c) and (d) of this section: Provided, That the members serving on the compensation programs performance council heretofore established in article three, chapter twenty-one-a of this code on the effective date of the enactment of this section in 2003 are hereby appointed as members of the board of managers subject to the provisions of subdivision (1), subsection (c) of this section.

    (2) Two members of the West Virginia Senate and two members of the West Virginia House of Delegates shall serve as advisory members of the board and are not voting members. The Governor shall appoint the legislative members to the board. No more than three of the legislative members may be of the same political party.

    (c) (1) The initial eight appointed voting members of the board of managers shall consist of the members appointed under the provisions of paragraph (D), subdivision (1), subsection (a) of this section and the remaining members appointed pursuant to the provisions of subsection (d) of this section. The term of each of the initial appointed members shall expire on December 31, 2005.

    (2) Effective January 1, 2006, if the commission continues, eight members shall be appointed by the Governor with the advice and consent of the Senate for terms that begin January 1, 2006, and expire as follows:

    Two members shall be appointed for a term ending June 30, 2007;

    Three members shall be appointed for a term ending June 30, 2008; and

    Three members shall be appointed for a term ending June 30, 2009.

    (3) Except for appointments to fill vacancies, each subsequent appointment shall be for a term ending June 30 of the fourth year following the year the preceding term expired. In the event a vacancy occurs, it shall be filled by appointment for the unexpired term. A member whose term has expired shall continue in office until a successor has been duly appointed and qualified. No member of the board may be removed from office by the Governor except for official misconduct, incompetency, neglect of duty or gross immorality.

    (4) No appointed member may be a candidate for or hold elected office. Members may be reappointed for no more than two full terms.

    (d) Except for those initially appointed under the provisions of paragraph (D), subdivision (1), subsection (b) of this section, each of the appointed voting members of the board shall be appointed based upon his or her demonstrated knowledge and experience to effectively accomplish the purposes of this chapter. They shall meet the minimum qualifications as follows:

    (1) Each shall hold a baccalaureate degree from an accredited college or university: Provided, That no more than three of the appointed voting members may serve without a baccalaureate degree from an accredited college or university if the member has a minimum of fifteen years' experience in his or her field of expertise as required in subdivision (2) of this subsection;

    (2) Each shall have a minimum of ten years' experience in his or her field of expertise. The Governor shall consider the following guidelines when determining whether potential candidates meet the qualifications of this subsection: Expertise in insurance claims management; expertise in insurance underwriting; expertise in the financial management of pensions or insurance plans; expertise as a trustee of pension or trust funds of more than two hundred beneficiaries or $300 million; expertise in workers' compensation management; expertise in loss prevention and rehabilitation; expertise in occupational medicine demonstrated by licensure as a medical doctor in West Virginia and experience, board certification or university affiliation; or expertise in similar areas of endeavor;

    (3) At least one shall be a certified public accountant with financial management or pension or insurance audit expertise; at least one shall be an attorney with financial management experience; and one shall be an academician holding an advanced degree from an accredited college or university in business, finance, insurance or economics.

    (e) Each member of the board shall have a fiduciary responsibility to the commission and all workers' compensation funds and shall assure the proper administration of the funds in a fiscally responsible manner.

    (f) The board shall elect one member to serve as chairperson. The chairperson shall serve for a one-year term and may serve more than one consecutive term. The board shall hold meetings at the request of the chairperson or at the request of at least three of the members of the board, but no less frequently than once every three months. The chairperson shall determine the date and time of each meeting. Six members of the board constitute a quorum for the conduct of the business of the board. No vacancy in the membership of the board shall impair the right of a quorum to exercise all the rights and perform all the duties of the board. No action shall be taken by the board except upon the affirmative vote of six members of the board.

    (g) Notwithstanding any provision of article seven, chapter six of this code to the contrary, the board shall establish the salary of the executive director. The board shall establish a set of performance measurements to evaluate the performance of the executive director in fulfilling his or her duties as prescribed in this chapter and shall annually rate the executive director's performance according to the established measurements and may adjust his or her annual salary in accordance with that performance rating.

    (h) (1) Each voting appointed member of the board shall receive compensation of not more than $350 per day for each day during which he or she is required to and does attend a meeting of the board.

    (2) Each voting appointed member of the board is entitled to be reimbursed for actual and necessary expenses incurred for each day or portion thereof engaged in the discharge of official duties in a manner consistent with guidelines of the travel management office of the Department of Administration.

    (i) Each member of the board shall be provided appropriate liability insurance, including, but not limited to, errors and omissions coverage, without additional premium, by the state Board of Risk and Insurance Management established pursuant to article twelve, chapter twenty-nine of this code.

    (j) The board of managers shall:

    (1) Review and approve, reject or modify recommendations from the executive director for the development of overall policy for the administration of this chapter;

    (2) In consultation with the executive director, propose legislation and establish operating guidelines and policies designed to ensure the effective administration and financial viability of the Workers' Compensation System of West Virginia;

    (3) Review and approve, reject or modify rules that are proposed by the executive director for operation of the workers' compensation system before the rules are filed with the Secretary of State. The rules adopted by the board are not subject to sections nine through sixteen, inclusive, article three, chapter twenty-nine-a of this code. The board shall follow the remaining provisions of said chapter for giving notice to the public of its actions and for holding hearings and receiving public comments on the rules Effective on July 1, 2012, all rules adopted by the board are subject to the all provisions of chapter twenty-nine-a of this code, including the provisions of sections nine through sixteen of article three of said chapter. All rules adopted by the board prior to July 1, 2012 shall be resubmitted for approval of the Legislature in accordance with the provisions of article three of chapter twenty-nine-a of this code;;

    (4) In accordance with the laws, rules and regulations of West Virginia and the United States government, establish and monitor performance standards and measurements to ensure the timeliness and accuracy of activities performed under the workers' compensation laws and rules;

    (5) Review and approve, reject or modify all classifications of occupations or industries, premium rates and taxes, administrative charges, rules and systems of rating, rating plans, rate revisions, deficit management and deficit reduction assessments and merit rating for employers covered by this chapter. The executive director shall provide all information required for the board's review;

    (6) In conjunction with the executive director initiate, oversee and review all independent financial and actuarial reviews of the commission. The board shall employ an internal auditor for the purpose of examining internal compliance with the provisions of this chapter. The internal auditor shall be employed directly by the board. The internal auditor shall submit copies of all reports prepared by the internal auditor for the board to the Joint Committee on Government and Finance within five days of submitting or making the report to the board, by filing the report with the legislative librarian;

    (7) Approve the allocation of sufficient administrative resources and funding to efficiently operate the Workers' Compensation System of West Virginia. To assure efficient operation, the board shall direct the development of a plan for the collections performed under section five-a, article two of this chapter. The plan for collections shall maximize ratio of dollars potentially realized by the collection proceeding to the dollars invested in collection activity;

    (8) Review and approve, reject or modify the budget prepared by the executive director for the operation of the commission. The budget shall include estimates of the costs and necessary expenditures of the commission in the discharge of all duties imposed by this chapter as well as the cost of providing offices, furniture, equipment and supplies to all commission officers and employees;

    (9) In consultation with the executive director, approve the designation of health care providers to make decisions for the commission regarding appropriateness of medical services;

    (10) Require the Workers' Compensation Commission to develop, maintain and use an effective program of return-to-work services for employers and workers;

    (11) Require the Workers' Compensation Commission to develop, maintain and use thorough and efficient claims management procedures and processes and fund management in accordance with the generally accepted practices of the Workers' Compensation insurance industry;

    (12) Consider such other matters regarding the Workers' Compensation system as the Governor, executive director or any member of the board may desire;

    (13) Review and approve, reject or modify standards recommended by the executive director to be considered by the commission in making decisions on all levels of disability awards. The standards should be established as an effective means to make prompt, appropriate decisions relating to medical care and methods to assist employees to return to work as quickly as possible;

    (14) Appoint, if necessary, a temporary executive director;

    (15) Employ sufficient professional and clerical staff to carry out the duties of the board. Employees of the board shall serve at the will and pleasure of the board. The board's employees are exempt from the salary schedule or pay plan adopted by the Division of Personnel;

    (16) Study the feasibility of, provide a plan for and provide a proposal for a request for proposals from the private sector for privatizing the Workers' Compensation system of this state, including, but not limited to, a plan for privatizing the administration of the Workers' Compensation system of this state and a plan for allowing employers to obtain private insurance to insure their obligations under the Workers' Compensation system of this state; study the effect, if any, of attorneys fees on the cost of administering the Workers' Compensation system; study the extent to which fraud or abuse on the part of employees, providers and others have an effect on the cost of administering the Workers' Compensation system; study the extent, if any, that the rates and amounts of disability awards exceed the rates and amounts of such awards in other states; study the comparative desirability of alternative permanent disability administration in those other states, and alternative deficit management strategies, including nontraditional funding; study the feasibility of authorizing a plan of multiple rate classifications by individual employers for employers who have different or seasonally diverse job classifications and duties: Provided, That no such plan may be implemented until adopted by the Legislature; and, in consultation with the director of the Division of Personnel, study the feasibility of establishing a work incentive program to place unemployed qualified recipients of Workers' Compensation benefits in state or local government employment. On or before January 1, 2006, the commission shall report the findings and conclusions of each study, the plans and proposals, and any recommendations the commission may have as a result of the study to the Joint Committee on Government and Finance; and

    (17) Complete all duties set forth in article two-c of this chapter.

    (k) The board of managers shall continue to exist pursuant to this article until the commission is terminated pursuant to the provisions of this chapter.




    NOTE: The purpose of this bill is to provide that rules adopted by the Workers’ Compensation board of managers are subject to the legislative review process.


    Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

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