Electricians’ pact could lower cost of workers’ comp
The union says the agreement is not a validation of Gov. Lingle's attempts to change state policy
In what union officials, business representatives, insurers and government officials described as a landmark agreement, an electricians union has entered an innovative workers' compensation contract with an association of electrical contractors.
The agreement will enable injured workers to get medical treatment faster and return to work more quickly than under the current, state-administered system, said Gerald Yuh, business manager of the International Brotherhood of Electrical Workers Local 1186, which entered the contract with the Electrical Contractors Association of Hawaii.
The agreement is expected to save money for contractors through reduced premiums.
Although just six of the association's 116 member contractors have agreed to participate in the contract, many more are expected to sign on by year's end. Altogether, the trade association's member contractors employ some 1,600 members of the electricians union.
Steve Watanabe, president of the Electrical Contractors Association of Hawaii, said the agreement marks a positive change from a system that has been less than perfect for employers and workers.
"Change is good, and it's about time for the state to start changing after years of status quo," he said.
Gov. Linda Lingle, who hosted a signing ceremony commemorating the agreement, called it "a very big deal."
"This is visionary, this is progressive, this is setting the pace for others across the state," said Lingle, whose signature was needed to validate the contract.
Few employment policies cause more heated controversy than workers' compensation programs. Workers often complain that employers and their insurers deny medical treatments. Employers and insurers, meanwhile, accuse doctors of abusing the system with unneeded procedures that raise premiums. State governments are left to adjudicate the disputes while injured workers go untreated in the interim.
While the Republican Lingle administration has sought to change public policies governing the state's workers' compensation program, through both legislation and rule changes, the Democrat-controlled Legislature has blocked those attempts, calling them anti-worker.
Against this background, Lingle and her staff sought to portray the electricians contract as validation of the changes she has sought to make. State labor director Nelson Befitel said that the main provisions of the contract were the same ones that the Legislature had rejected.
But union representatives said it was going too far to say that the union's signing of the agreement suggested that the union supported Lingle's policy changes.
Harold Dias, Jr., a Hawaii-based representative for the IBEW, said that the law already allows unions and employers to enter alternative workers' comp agreements. There's no need for further change, he said.
Dias said the contract's one-year duration will give the union a chance to see if the contract is in fact as beneficial for workers as the union has been told.
"We're willing to give it a try and see how it works," he said.
As Befitel described it, the agreement does four things: It creates a three-part process for resolving disputes outside of the state system, sets up "evidence-based" guidelines for determining medical treatments, sets up a pre-determined network of doctors to provide treatments and allows employees and employers to come together and decide how to treat injured workers.
To support the assertions that the system will benefit everyone, Befitel pointed to an insurer-commissioned study of the impact of a similar system in California, where average claims dropped by 26 percent, or about $7,000. Other programs had reduced the amount of time workers had been out sick.
Befitel could not say how much premiums will come down as a result of the Hawaii electricians contract. But he said the premium costs will drop.
Patrick Conroy, vice president for risk control services with Honolulu insurance company King & Neel Inc., concurred, although he said premium costs probably would not drop as much as claims costs.
"We can't say they will come down 26 percent," he said. "But they will come down."
And this, ultimately, is good for union workers, said Yuh. High claims costs put union contractors at a competitive disadvantage when they're bidding for jobs, Yuh said. And if the union contractors lose business because of this, that means less work for union workers.
Lowering costs for union employers, Yuh said, is ultimately good for union workers.
"Hopefully others will follow in our footsteps," he said.