Will Alaska Legislators Jump the Shark on Workers’ Comp Death Benefits?

Most people at this point are familiar with the phrase “jumping the shark.” Those of us old enough to remember its origins know that it developed from an episode of the 1970’s show “Happy Days,” that consisted of the persistently cool Arthur “Fonzie” Fonzarelli jumping a shark on water skis. The stunt came late in the show’s life and became emblematic of a program that had gone too far, from the acceptable past the ridiculous, direct to the sublime.

Perhaps he shouldn’t have been wearing his trademark leather coat on the water. Then it might not have seemed so silly.

Nevertheless, it seems the Alaska State Legislature is considering a bill that could put them in a similar boat (pun intended). A bill introduced before the House of Representatives would change how workers’ compensation reimburses for death benefits in the event a fatally injured worker has no dependents.  House Bill 44 would provide $120,000 to non-dependent parents of a deceased worker when no dependents exist. No other changes to current death benefits would be made.

So, to reiterate (you know how I so love to iterate), if this legislation passes and is signed into law, when a worker is killed on the job and has no spouse or dependent children, the parents of said worker will be paid $120,000.

Now, death benefits for parents of fatally injured workers are not uncommon, however, they are, with very few exceptions, tied to dependency on the worker. Indeed, a review of statutes from across the nation on this topic show that the phrase “Wholly dependent” is quite common as a requirement for parent benefit eligibility.

Alaska’s HB 44 requires no such dependency. In fact, the wording that would be added to the statute expressly addresses the lack of dependency. The bill would amend AS 23.30.215(a) by adding the following language:

(6) if there is no widow or widower or child or children, and the father, mother, grandchildren, brothers, and sisters were not dependent on the deceased at the time of injury, the following amounts are payable in a lump sum:

(A) $120,000 to the surviving parent, if there is only one surviving parent;

(B) $120,000 divided equally among the surviving parents, if there are two or more surviving parents; or

(C) $120,000 to the estate of the decedent, if there are no surviving parents.

Charles Collins, Director Workers’ Compensation for the Alaska Department of Labor and Workforce Development, reinforced the standard of dependency, telling me, “Workers’ compensation has always focused on economic damages.  Providing $120,000 to surviving parents or the deceased employee’s estate when the deceased employee has no dependents is compensation for a non-economic damage like pain and suffering.  It is an attempt to right a wrong.  This proposed benefit goes far beyond the social contract which provide death benefits in the form of wage replacement for dependents of deceased employees.”

Sources within the state tell me that this effort is being pushed by some parents who recently lost adult children as the result of workplace accidents. While we certainly can sympathize with their loss, in most states workers’ comp is not a blanket life insurance policy. It is a social safety net designed to protect the interests of injured workers and those who depend on them.

Indeed, Collins confirms that this is the intent of the Alaska Workers’ Compensation Act. He says, “Death benefits are to provide financial support to surviving dependents of deceased workers.  The purpose of deaths benefits is to alleviate the financial hardship to dependents that may ensue after the work-related death of an employee.  The intent of the Act is that death benefits are available to dependents who financially relied on the deceased employee’s employment.”

As I indicated, benefits providing wholesale payments to non-dependent parents in this country seem to be very rare in the workers’ compensation world. My research found that only 3 4 states provide some level of benefits to non-dependent parents, with only one, Louisiana, having a potential lump sump payout larger than what is being proposed in Alaska. Those three states are:

Hawaii:
Liability in the absence of dependents. If there are no dependents, the employer shall pay an amount equal to 25% of 312 times the effective maximum weekly benefit rate provided in section 386-31, to the nondependent parent or parents.

Louisiana:
If the employee leaves no legal dependents and no biological or adopted children, the sum of $75,000 will be paid to each surviving parent of the deceased employee, in a lump sum, which will constitute the sole and exclusive compensation in this case.

Montana:
If the decedent leaves no beneficiary, a lump-sum payment of $3,000 must be paid to the decedent’s surviving parent or parents.

Update since publishing: Texas has changed their Death Benefits to now provide 104 weeks of benefits to non-dependent parents if no other beneficiaries exist. Previously carriers were required to pay 364 weeks to the subsequent injury fund, but that was reduced to 250 weeks with the change to parental benefits. Thanks to my good friend, attorney Stuart Colburn for the catch!

This, quite honestly, represents nothing but an attempt to implement an undeclared tax on Alaska employers, a tax designed to provide a basic life insurance policy for non-dependents through a system not initially intended to provide for them. It is patently unfair to employers in the state, and steps outside the intent of the “Grand Bargain.” Alaska legislators will hopefully do the right thing and reject this idea. Otherwise, they will have had gone too far, from the acceptable past the ridiculous, direct to the sublime. They may indeed be jumping the shark.

Or more appropriately, being it is Alaska, they may be instead jumping the polar bear.

Originally published on bobscluttereddesk.com