Legislative Update: Wrap Up SJ 27

The Economic Affairs Interim Committee is wrapping up its study (SJR 27) of the Montana workers’ compensation system and MSF structure. One meeting on SJ27 remains in September.

Over the past year and a half, the Committee—made up of four democrats and four republicans (two of each from each chamber)—has heard from industry experts from across the country as well as Montana stakeholders. MSF has consistently held the position that we believe the current structure of a competitive workers’ compensation system is the best for Montana businesses and their employees – especially small businesses that have fewer market options. It is MSF’s position that over the course of the study, the facts and data have proven this to be the case.

Based on the facts and data presented to the committee, various alternative concepts have been withdrawn from consideration. For instance, a competing concept was to eliminate MSF altogether and replace the guaranteed market with a high-risk pool. Despite unfounded claims to the contrary, MSF was able to produce data showing that under a high-risk pool scenario, many of Montana’s small businesses would see rate increases. For this reason, and others, the committee opted to abandon the “elimination” option.

Current committee efforts are focused on making MSF look and operate more similar to a private insurance company. There are a few pieces of committee draft legislation in the works to accomplish these efforts:

  1. MSF exemption from the Montana Information Technology Act (MITA).
  2. Allow the State of Montana to explore a bidding process to cover state employees for workers’ compensation (exempting the university system and MSF).
  3. MSF exemption from state procurement.
  4. Election of a minority of MSF board members by MSF policyholders.

We have not yet seen final language on any of these proposals. Therefore, MSF does not at this time have an official position on them. However, we can tell you that conceptually these are very similar to how private companies do business and certainly could go a long way to level the playing field. It is our goal to provide our customers with accurate, reliable information regarding legislation that may impact them in a positive or adverse manner.

If you have any questions, please do not hesitate to reach out to Ethan Heverly, Director of Government and Community Affairs at (406) 495-5426.

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