DES MOINES — The Iowa House on Thursday approved an overhaul of the state’s 104-year-old workers’ compensation law that majority Republicans said was needed to rebalance a lawyer-driven system that’s making it hard for businesses in Iowa to compete.
The system was established so employees would have a “certain and easy process to follow in case of a workplace injury,” floor manager Rep. Gary Carlson, R-Muscatine, said in introducing House File 518. The idea was to avoid the costs and complications associated with litigation for workers and limit overall costs for employers.
“Today,” Carlson said, “due to a number of court rulings and commission rulings, Iowa’s workers’ compensation system has lost its intended balance.”
Some fixes might be necessary, but not the wholesale changes envisioned in the business- and industry-backed bill, argued Rep. Jerry Kearns, D-Keokuk.
“If you’re going to do me wrong, do it right,” Kearns said, quoting from a country western song. “Majority members, you’re far from doing this one right.”
The bill's critics argued Iowa already has a good workers’ comp system with premiums 11 percent below the national average, according to the Iowa Economic Development Authority, and have decreased in three of the last four years. Iowa’s system also received an A rating from the Insurance Journal, which found no weaknesses and said its strengths were low politicization, efficiency and market competitiveness.
“This bill is not necessary,” said Rep. Marti Anderson, D-Des Moines. “This bill guts the rights for injured workers. I don’t understand why we’re doing this at this point.”
As an example, Rep. Gary Worthan, R-Storm Lake, the owner of a trucking firm with one-and-a-half employee positions, said he pays $991 a month for workers’ comp insurance. Across the state line in South Dakota, his rate would be $412 a month less. That works out to about 2.7 cent per mile traveled.
“I compete every day with South Dakota trucks in an industry where we measure improvements in tenths of a cent per mile,” he said.
House Commerce Committee Chairman Peter Cownie, R-West Des Moines, cited a case in which an Iowan who worked in another state filed a workers’ comp claim in Iowa.
He also referred to a ruling that allows injured workers receiving workers’ comp benefits to also collect unemployment insurance.
“When you’re on workers’ comp, you’re being compensated for being injured at work, but can’t work,” he said. “If you’re on unemployment, you’re supposed to be looking for a job.”
After more than six hours of debate, the House voted 55-38 — mostly along party lines, but with Rep. Rob Taylor, R-West Des Moines dissenting — to send the bill to the Senate, where a similar bill is on the debate calendar.
A Democratic amendment to replace the changes with a study committee representing labor, management, insurers, agriculture, lawyers and health care was rejected 37-58.
Republicans also refused to defer a vote until Monday that would give lawmakers time to gather more information.