Brianne Pfannenstiel

bpfannenst@dmreg.com

The Iowa House of Representatives approved changes Thursday to the state's workers' compensation laws, agreeing to scale back the legislation's most controversial proposals after pushback from some Republicans.

House File 518 originally would have ended some benefits at age 67 and raised the standard for some injuries covered under the workers' compensation program. A Republican-authored amendment, hammered out behind the scenes and unveiled the night before the vote, did away with those provisions.

It also moderated a measure which would have significantly reduced benefits for shoulder injuries.

"I feel that the bill at this point does represent more of a reasonable balance between employers and employees, and I felt comfortable supporting it," said Rep. Andy McKean, R-Anamosa.

McKean was among a group of Republicans who said they could not support the original bill. On the final vote, every Republican in attendance supported the bill with the exception of Rep. Rob Taylor, R-West Des Moines, who said he was fulfilling a promise to constituents.

The bill, which must be approved on the floor of the Senate, would minimize late fees for employers who fail to pay benefits on time, limit how much attorneys can reap in legal fees and make it harder for injured workers to claim lump sum payments, among other provision.

Democrats, who unanimously opposed the legislation, said what remains in the bill is still a "slap in the face" to Iowa workers.

"We used to have pride in this state that we took care of our workers, our people," said Rep. Bruce Hunter, D-Des Moines. "If one of us went down, the rest of us would get up and help them out to make sure that they’re taken care of. And that’s how we’ve designed our work-comp laws in this state. … This bill was obviously written by those that want to take advantage of workers.”

The revised bill removes language that would have required workers to show that a workplace injury is the "predominant," rather than a "substantial" factor in their disability. Many voiced concerns that the higher standard would have made it too difficult for anyone with a pre-existing condition to claim workers' compensation benefits.

Supporters say the changes are necessary to curtail costs and keep Iowa competitive with other states with lower premiums.

"We are trying to fix the fact that Iowa’s rates, compared to where they were a few years ago, are not as competitive as they are with other states," said Rep. Gary Carlson, R-Muscatine. "And we have heard consistent reports from many employers who have seen consistent increases in their workers’ compensation rates."

But a Register analysis showed little change in Iowa's workers' comp costs.

In 2006, Iowa's premiums were the 45th lowest in the nation, according to the Oregon Department of Consumer and Business Services, which studies the issue annually.

By 2016, Iowa had risen to 24th. But ProPublica and NPR reported in 2015 that since 2003, 33 state legislatures have voted to reduce workers' comp benefits or make it more difficult to qualify for them — a phenomenon one economist called a "race to the bottom."

Rep. Gary Worthan, R-Storm Lake, who works in the trucking industry, said that as an employer, he covers workers' compensation premiums for about 1½ full-time equivalent employees at a cost of $991 a month. He said those same premiums would cost him about $400 less across the state line in South Dakota.

"I compete every day with South Dakota trucks in an industry where we measure improvements in tenths of a cent a mile," he said. "We’re putting Iowa businesses at a disadvantage every day. This legislation is long past due, and it’s time to move it forward.”

Rep. Mary Wolfe, D-Clinton, said the data doesn't support claims of an out-of-control system. The changes included in the legislation could help employers such as Worthan, she said, but it would do so by harming Iowa's workers.

"You made it clear, this isn’t so much about abuses in the system," she said. "It’s about premiums. It’s that insurance companies are raising their premiums. And so one way to force or to hope that those premiums are going to be lowered is if we gut the workers’ compensation system to the point where insurers can be pretty darn sure that they’re going to be paying out on a lot fewer claims.”

The state's nonpartisan Legislative Services agency predicted the bill, before it was amended, would cost the state about $205,000 a year to administer the changes, while at the same time saving employers more than $2 million in benefit payouts.

Because the bill has been so heavily amended, Rep. Brian Meyer, D-Des Moines, sought to delay a vote until the Legislative Services Agency could issue a new report describing its fiscal effects. That motion was voted down.

The bill comes on the heels of approved legislation that dramatically scaled back public workers' ability to negotiate for benefits through collective bargaining. That bill was introduced, cleared both chambers of the Legislature and was signed into law by Gov. Terry Branstad 10 days later.

A companion bill, Senate File 435, is eligible for debate in the Senate.

Sen. Michael Breitbach, a Republican from Strawberry Point and the bill's floor manager, said the Senate could take up its version of the legislation as early as Monday. He said he expects the Senate to draft its own amendment.

"It won’t be the same as theirs,” he said, referring to the House bill.

William Petroski contributed to this report