Subrogation In Montana Makes News

The recent legislative session in Montana which ended in April 2015 has made the national publication of the National Association of Subrogation Professionals ("NASP"). SB 288, which arose after MCSi's President Michael J. Marsh testified in front of the Economic Affairs Interim Committee. Marsh wrote a draft of language for the bill, which was not used in the creation of SB 288. Both houses of the legislature passed the modified, simplified bill, which Governor Bullock unfortunately vetoed a short while later. The Governor's office sent an e-mail response to Mr. Marsh, which is shown below. Please read the NASP newsletter @ http://subrogation.informz.net/informzdataservice/onlineversion/ind/bWFpb...

From: Bullock, Governor 

Sent: Tuesday, May 12, 2015 5:04 PM

To: Michael Marsh

Subject: Thanks for your comments

 Dear Michael Marsh:

Thank you for contacting me about Senate Bill 288, an act to provide workers’ compensation insurers full subrogation rights against at-fault parties. On April 29, 2015, I vetoed this legislation.

SB 288 changes the law governing subrogation in workers compensation cases where the injured worker recovers damages in a third-party liability case. The bill would allow the workers compensation insurer to recover medical payments made on behalf of the injured worker, regardless of whether the injured worker suffers damages in excess of the workers compensation benefits and third party recovery combined.

The effect of SB 288 in many cases would be to cause harm to a worker who has suffered serious, life-altering injuries. And, even in cases involving less serious injuries, given the low limits of our mandatory insurance liability law, an injured worker will often be left undercompensated for their injuries and damages due to the effects of SB 288’s changes in subrogation law.

The primary concern expressed by proponents of SB 288 is the effect that high cost injuries have on their “mod factor” – the modification factor used to calculate employers’ premium rates. The mod factors may also adversely affect employers’ abilities to get contracts with some companies and governmental entities. While these are serious and legitimate concerns, SB 288 does not directly address those concerns. I believe efforts should be made in the coming interim to identify ways to address the legitimate concerns of employers, without inequitably harming the rights of injured employees to obtain full legal redress for their injuries. Therefore, I will direct the Commissioner of Labor and Industries and other members of my administration to work with the Labor Management Advisory Council and other stakeholders to identify possible alternative ways of addressing the concerns underlying SB 288. For these reasons, I vetoed SB 288.

Thanks again for reaching out about this legislation and please don’t hesitate to do so again with further questions or comments.

 Sincerely,

STEVE BULLOCK

Governor