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State workers' compensation: enactments in 1988.

Little major legislation pertaining to State workers' compensation programs was enacted in 1988. maximum weekly compensation levels, however, were increased in 43 States, the District of Columbia, and the Virgin Islands

LaVerne C. Tinsley is a State standards adviser in the Division of State Workers' Compensation Programs, Office of State Liaison and Legislative Analysis, Employment Standards Administration, U.S. Department of Labor.

Although a moderate number of amendments affecting State workers' compensation programs were enacted into law by State legislatures during the year, there was little major legislation.

As in previous years, new coverage is still being established for specified volunteer employees in hazardous occupations. Elective coverage is being extended to sole proprietors, partners, and corporate officers. Prison inmates also are being covered under certain conditions.

Maximum weekly compensation levels for total disability and death were increased in 43 States, the District of Columbia, and the Virgin Islands.

The State of Washington raised the percentage of the State average weekly wage upon which benefit levels are based to 100 percent from 75 percent. Legislation in Mississippi mandated that benefit levels be based on 66 2/3 percent of the State average weekly wage, thus eliminating the statutory amounts previously established. Oklahoma statutorily raised maximum weekly benefits for disability and death effective July 1, 1988, through July 1, 1990. Alaska eliminated the linkage of its maximum weekly benefits to the State average weekly wage. Compensation rates remain frozen in three States,

New legislation in Indiana entitles injured employees to replace artificial members at the expense of the employer whenever medically prescribed, except for normal wear and tear. The law provides that up to one-half of a compensation award may be designated for child support payments.

An offset of temporary disability benefits by unemployment insurance compensation was enacted in Colorado. Kentucky passed a resolution petitioning the Congress to prohibit the reduction of benefits under the Employee Retirement Income Security Act of 1974 (ERISA) when disability benefits are received under State workers' compensation programs.

Insurers in Alaska must now establish and maintain workplace safety-rate reduction programs.

The Georgia State Board of Workers' Compensation has been transferred out of the State Department of Labor to function as a separate entity under the executive branch of government.

Self-insurance status is authorized for the State of Mississippi, and group self-insurance status is authorized for two or more political subdivisions of the State.

Five States raised the total amount allowable for burial.

Other State workers' compensation enactments made changes in medical, occupational disease, insurance, rehabilitation, and reemployment provisions. Most States added or modified provisions pertaining to financing or penalties.

The 1988 legislative changes by State follow. Alaska

Volunteers performing civil defense and disaster relief services in Alaska are now covered by workers' compensation.

The provision linking maximum weekly benefits to 200 percent of the State average weekly wage was eliminated. Maximum weekly benefits are now limited to $700 per week. Compensation for a permanent partial impairment which does not result in a rating of permanent total disability is determined by multiplying the percentage of disability by $135,000, the amount covering the whole person. Previously, compensation in such cases was an amount equal to 80 percent of the employee's spendable weekly wages, with a maximum of $60,000, in addition to temporary total or temporary partial disability compensation.

An offset is established against the workers' compensation benefit payments to an injured worker by the amount of any dual benefits paid or payable under an employer pension or profit-sharing plan.

Benefit payments for temporary total or temporary partial disability will be terminated when the injured employee's condition becomes medically stable.

The Workers' Compensation Board is given new authority to employ a reemployment benefits administrator whose principal responsibility is to implement the rehabilitation services provided to injured workers. A medical services review committee may also be appointed by the board to provide advice and assistance on matters pertaining to the appropriateness, necessity, and cost of medical and related services.

In compensation cases in which it is found that an employment application or preemployment questionnaire has been intentionally falsified by the employee concerning his or her physical condition, workers' compensation benefits may not be authorized for the employee,

Workers' compensation insurance carriers are now required to establish and maintain a workplace safety-rate reduction program for policyholders. The fine charged to an employer for violating workers' compensation insurance coverage requirements was increased to $10,000 from $1,000. Employers who are covered through the assigned risk pool may be assessed a surcharge of up to 25 percent of their total premium costs after the first $3,000 in any policy year.


The Industrial Commission must now prepare a schedule of fees for services provided by physical therapists in the same manner as physicians' fees are prepared.


An inmate receiving permanent disability benefits for a work-related injury prior to incarceration is entitied to recovery of any future benefits held in trust by the Department of Corrections during the period of incarceration.

Employers are required to file requests for hearings to contest a penalty assessment order within 15 days, rather than the previous 20 days.

The estates of employees of local public agencies are now entitled to receive a maximum of $2,000, formerly $1,500, to cover expenses for burial.


Private homeowners are no longer required to provide coverage protection for workers while they are performing work contracted out for renovations, additions, remodeling, or repairs to a private home.

Vocational rehabilitation services may be terminated by any party 14 days after written notification has been given to the director of workers' compensation and all other parties involved. Health care services are subject to review when a request has been made by an insurer, self-insured employer, or claimant. Funding for the Major Medical Fund will come from taxes on insurance premiums.

Legislation was enacted establishing a workers' compensation self-insurance program for the Department of Institutions. Previously a pilot program of selfinsurance was in effect for this agency.

A penalty of 8 percent per annum will be assessed on every employer or insurance carrier for making untimely compensation payments.

Compensation payments payable to an employee for temporary disability are now subject to offset by unemployment insurance compensation benefits.

An interim study committee was established with members from both the House and Senate to review the workers' compensation system and propose any needed reform. Some of the topics for study are: What constitutes fair and adequate compensation for various types of injuries under the workers' compensation system; the economic impact of compensation rates upon various industries and their effects upon the economic competitiveness of Colorado; and criteria for coverage, payment of medical benefits, and calculation of insurance benefits based on wages and the employee's length of time on the job. A report must be made to the first regular session of the 57th General Assembly, scheduled to convene on January 4, 1989.


All charges for hospital services provided employees for work-related injuries or diseases are the sole responsibility of the employer or carrier and must not be billed directly to the injured employee.

A principal employer who hires a contractor or subcontractor is now subject to civil actions brought by any injured employee of the contractor or subcontractor, or the dependents in case of death, for recovery of damages, unless such employer has paid compensation benefits to the injured employee or the dependents for the injury or death which is the subject of the civil action. The employees of an employer who goes out of business or moves all or most of the company's operations out of the State and fails to continue accident and health insurance coverage payments are eligible for indemnity benefits ftom the Second Injury Fund when a work-related accident occurs.

The burial allowance was increased from $3,000 to $4,000.


A minimum of 60 days' notification must be given to employers concerning nonrenewal of their workers' compensation insurance policy. In the past, untimely notifications in such instances made it difficult for employers to obtain new insurance coverage as needed.


The maximum weekly compensation rate is increased to $700 from $400 for periods of additional temporary total disability in cases of loss of limb or sight.

By enactment, certain governmental entities have been excluded from insurance regulations that relate to employers who pool their liabilities in order to qualify as a group self-insurer's fund.

The immunity of an employer from liability for work-related injury or death is newly extended to any sole proprietor, partner, corporate officer or director, supervisor, or other person serving in a managerial or policymaking position at the time of an injury.

The term "wages" now includes all compensation received for meals, parking, and legal insurance.

Claims initially accepted for compensation but later controverted by the employer or carrier must now be reported to the Division of Workers' Compensation as prescribed by the Division. Georgia

Employees of the Department of Corrections who are engaged in farm and livestock operations are covered by the workers' compensation law.

Injury to an employee caused by an intentional act of the employer and resulting in the death of the employee entitles survivors to additional compensation, not exceeding $20,000, as a penalty against the employer.

The title of "Deputy Director" was changed to "Administrative Law Judge."

The State Board of Workers' Compensation was transferred out of the State Department of Labor and established as a separate entity under the executive branch of government.


Various fines and penalties were increased which will be assessed against employers who violate the law.


New criteria were established for determining whether an employer willfully violated the requirement for securing payment of compensation and whether a penalty should be assessed in such cases.


Maximum weekly benefits for all types of disability have been statutorily increased ftom July 1, 1988, through July 1, 1990. Similarly, the totalmaximum amount payable for any combination of benefits, exclusive of medical benefits, will also increase during the period. Although the law does not specifically mention any increases in death benefits, they will also rise at the same levels as benefits for total disability.

The maximum number of weeks of temporary total disability benefits that a worker may receive, in addition to benefits for permanent partial disability, is 78 weeks, previously 52 weeks.

Artificial apparatus must now be replaced by employers whenever medically prescribed, except for normal wear and tear.

Compensation is no longer payable for occupational diseases caused by inhalation of asbestos dust in cases where the last exposure occurred on or after July 1, 1988, unless disablement occurs within 35 years after the last exposure date, formerly 20 years.

One-half of a compensation award may now be withheld for child support income and for other remedies concerning the enforcement of a child support order.

All records of insurance coverage must now be maintained for a period of 45 years instead of 30 years.

An appropriation of $95,000 was approved for transfer from the State General Fund to the Workers' Compensation Fund to cover workers' compensation administration costs from July 1988 through June 1989.

The Industrial Board of Indiana is renamed the Workers' Compensation Board of Indiana.

The burial allowance was increased from $2,000 to $4,000.


Coverage is extended to include volunteers of the newly formed Kansas Department of Civil Air Patrol.

Ten administrative law judges may be appointed by the Director of the Division of Workers' Compensation to serve in the division as employees covered under the classified service.

Subrogation rights or credits against future compensation payments authorized for employers have now been extended to include the workers' compensation fund.


A resolution was enacted that petitions the Congress to prohibit the reduction of private pension benefits covered under the Employee Retirement Income Security Act of 1974 (ERISA) when disability benefits are received under the State workers' compensation programs.


When an employee dies due to a compensable injury and leaves no legal dependents entitled to benefits under any State or Federal compensation system, a lump sum of $20,000 will be paid to each surviving parent, and the claim will be closed.

Criteria are established concerning the extent of employer liability for furnishing medical care. Injured employees may now change from the physician currently treating them to one in another field or specialty without prior approval.

Employers who fail to secure compensation for work-related injury or death will be at risk of being assessed a civil penalty by the Secretary of Labor or a designee, up to a maximum of $10,000.

New coverage is enacted for prisoners in county jails who are serving under a final sentence of 72 hours or less and are assigned to work outside the jail, prisoners employed by a private employer, those who participate in a work release program, and those who are imprisoned under intensive supervision. Design professionals are no longer liable in cases of civil suits resulting from injuries that occur on construction projects.

The law was amended by providing that no claim for compensation may be assignable or subject to attachment for debts, except for the enforcement of a current support obligation or a support obligation in arrears. The law also provides that compensation for the dependents of a handicapped individual who is employed by a sheltered workshop and receiving compensation is exempt from the weekly minimum amount of compensation payable by law for death ($25).

A legislative council was given authority to establish a subcommittee on rehabilitation to study the vocational rehabilitation and retraining needs of injured workers under the workers' compensation program.

The Administrator of the Office of Employment Rehabilitation is now responsible for collecting data on reemployment trends of injured workers. Employers who provide rehabilitation services must report to the Workers' Compensation Commission the number of workers receiving rehabilitation; the type, duration, and costs of services; and the status, skill levels, salaries, and tasks of each person in rehabilitation.

An appropriation of $150,000 was approved for transfer ftom the General Fund to the Workers' Compensation Commission and the Subcommittee on Rehabilitation for rehabilitation purposes.


Both auxiliary police officers and members of volunteer fire companies in Baltimore County will now be covered for workers' compensation while actually on duty. Likewise, in Charles, St. Mary's, and Worcester Counties, members of volunteer fire departments and rescue squads will be newly covered at the discretion of the respective county commissioners or county council.

The period for making a request for a hearing concerning a controverted rehabilitation plan is extended ftom 10 days to 15 days. Other procedural provisions pertaining to vocational rehabilitation have also been changed. Insurers who violate insurance certification requirements for workers' compensation coverage will be fined $300, formerly $150.


Legislation changed the waiting period for compensation from 5 days or more to 5 calendar days or more.

The period during which benefit payments may be made without prejudice after all parties have come to agreement was extended from 60 days to 120 days.

A stop-work order will now be served on employers to cease all business operations at their places of employment or job sites as a penalty for noncompliance with insurance requirements. Michigan

The legislature passed a resolution that it must approve the certification of competition in the workers' compensation insurance market by the Commissioner of Insurance.


Bomb disposal workers are covered as State employees when disposing of bombs outside of the municipality where they are regularly employed, but within the State.

Several amendments established presumptions of occupational disease. For instance, a firefighter with an organized fire department who has contracted a disabling cancer caused by certain types of exposure in the employment and who is unable to perform the duties required of the job is now presumed, except where otherwise stated in the law, to have an occupational disease for which compensation is payable. A presumption of occupational disease was also added to the law concerning workers who contract any infectious or communicable disease while providing emergency medical care outside of a hospital.


Maximum weekly compensation for disability and death was changed ftom a statutory amount of $140 to 66 2/3 percent of the State average weekly wage, Total maximum compensation now equals 450 weeks of compensation times 66 2/3 percent of the State average weekly wage.

Upon proper notification to the Workers' Compensation Commission, the State is authorized to become a self-insurer. Any municipality with a population of 40,000 or more, formerly 100,000, may choose to become a self-insurer. Two or more political subdivisions and two or more employers engaged in a common type of business are newly permitted to group self-insure their liabilities for workers' compensation.

Beginning on the first days of July and October 1989, the scope of coverage of workers' compensation will be extended to include all political subdivisions and State instrumentalities (as well as all offices, departments, agencies, bureaus, commissions, boards, institutions, hospitals, colleges, universities, airport authorities, and other State instrumentalities). The provision that excluded coverage for handicapped employees in sheltered workshop programs has been eliminated from the law.

The Mississippi Workers' Compensation Self-Insurer Guaranty Association has been formed to ascertain that workers' compensation claims are paid without excessive delays, to avoid financiallosses to claimants as a result of self-insurer insolvency, and to assist in the detection and prevention of self-insurer insolvency. All self-insurers are required by law to become members of the new association as a condition of maintaining their selfinsurer status.


Coverage was amended to exempt volunteers who provide services for a taxexempt organization strictly on a voluntary or charitable basis where no compensation is paid. Inmates confined in a State prison, penitentiary, or county or municipal jail, and patients or residents of a State mental facility, are also exempt under certain conditions.

The services of a chiropractor may now be used by the employer in the treatment of an injured worker.


Authority for conserving the assets of the Second Injury Fund and the Vocational Rehabilitation Fund was given to the presiding judge of the Workers' Compensation Court.

Self-insurers may now establish a trust fund as proof of their financial ability to provide benefits for workers' compensation.

New Hampshire

Employers who fail to secure the payment of compensation without sufficient cause are subject to assessment of civil penalties ordered by the labor commissioner. New Jersey

A rebuttable presumption is established that any cardiovascular or cerebral vascular injury or death to certain volunteer and professional public safety and law enforcement personnel will be compensable if the injury or death occurs while responding to an emergency.

Many changes were made in the law involving the administration and payment of compensation awards made against defaulting employers covered by the Uninsured Employer's Fund. The law was also amended to change the annual assessment on the insurance carrier for financing the Second Injury Fund to a surcharge imposed directly on the individual policyholder.

New Mexico

The legislature modified procedures and regulations regarding payments and claims against the Subsequent Injury Fund.

A joint interim legislative committee on workers' compensation was created. The committee is reviewing the feasibility of a State-administered insurance fund and its impact on public self-insured programs, considering ways to control health care and legal costs, reviewing the insurance-rate filing system and reserve requirements, and reviewing costs to insurance carriers and availability of data on such costs.

New York

Workers' compensation coverage was extended to include volunteer and paid ambulance service workers and certain executive officers of a corporation.

The allowance for funeral expenses was increased to $3,000 from $1,500.

Compensation for permanent partial loss, or loss of use, of an eye is now awarded on the basis of uncorrected loss of vision or corrected loss of vision resulting from injury, whichever is greater. The law was previously silent on corrected loss of vision.

Fee splitting is now acceptable under the law for any professional services furnished by physicians, podiatrists, or chiropractors who practice as partners in groups or professional corporations,


For purposes of workers' compensation coverage, the definition of "employee" was amended to include a participant in a sheltered workshop program certified by the U.S. Department of Labor.


Workers' compensation provisions regarding insolvency of an insurance carrier are now applicable to certain insurers under the Longshore and Harbor Workers' Compensation Act. Payment of compensation pursuant to the Longshore Act will be made by the Workers' Compensation Security Fund at the Federal benefit level or at the State's maximum weekly benefit level, whichever is lower.

Rhode Island

In determining compensation for occupational hearing loss, a new frequency level of 3,000 cycles per second was added; formerly only frequencies of 500, 1,000, and 2,000 cycles per second were used.

A memorandum of agreement must now be filed with the Workers' Compensation Department by the employer within 10 days of initial payment, for all injuries occurring on or before February 28, 1986. Employers are also required to comply with the early pay system for injuries occurring on or after March 1, 1986, as the filing time for the memorandum of agreement.

Terms have been extended for both the special legislative commission studying appellate procedures and the special legislative commission established to identify occupational diseases that pose a major health threat to workers in the State.

A fine of $100, formerly $50 per offense, will be charged to any employer for refusing or neglecting to report every personal injury suffered by his or her employees. Similarly, an insurance carrier or self-insurer will be fined for refusal to provide, or negligence in providing, notice of insurance or cancellation, or for failure to renew a policy. All fines collected for any violation will be paid into the Second Injury Indemnity Fund.

South Carolina

The burial allowance was increased to $2,500 from $400. Also, compensation for the surviving spouse only, in death cases in which there are two or more dependent children, is now based on 50 percent, formerly 66-2/3 percent, of the employee's average weekly wage. Disability compensation for the loss of an eye is payable for a maximum of 140 weeks, previously 110 weeks.

Employers are required to provide and regularly require the use of safety appliances and adopt and enforce safety rules and regulations. Employees who do not comply with safety rules and regulations will not receive compensation for injuries. Previously, employers only had authority to regulate safety devices.

The "South Carolina Industrial Commission" has been renamed the "South Carolina Workers' Compensation Commission."

South Dakota

Annual cost-of-living increases are provided for individuals receiving permanent total disability benefits for a specific bodily injury.


Elective coverage may now be established for subcontractors and a leased operator, and for a leased owner/operator, of a motor vehicle after proper notification has been filed.

Additional compensation payments for temporary total disability may not exceed 25 percent of the award, unless it is proven that refusal to pay compensation was not in good faith and caused additional expense, loss, or injury to the employee.

Insurers are required to provide medical benefits for paid on-call and volunteer firefighters. Members of rescue squads are now covered in generally the same manner as full-time paid firefighters or emergency services personnel.

Fees charged a claimant for testimony given by a physician or specialist by oral deposition concerning a claim are charged to the employer when the employee prevails in a case. Utah

Weekly compensation for a temporary partial disability may not exceed 312 weeks, nor continue for more than 8 years after injury. Benefit payments will be discontinued when disability ends or the injured employee dies. The Industrial Commission will now base awards for permanent partial disability on medical evidence when the compensation for a permanent impairment is not provided for in the schedule of losses, but not to exceed 312 weeks.

Minimum weekly compensation for permanent total disability, after the initial 312 weeks, is currently based on 36 percent of the State average weekly wage, formerly 45 percent.

The "Second Injury Fund" has been renamed the "Employers' Reinsurance Fund." Payments from the fund for any combination of disabilities (at the rate paid for permanent total disability) amounting to 312 weeks of compensation will be reduced by 50 percent of any Social Security benefits received by the employee during the same period, Costs to cover rehabilitation and training expenses will come from the proceeds of the Fund and will be provided at the discretion of the Industrial Commission; previously expenses were limited to $1,000.

Employment of a medical director or medical consultants may be approved as an alternative method for evaluating medical evidence in controverted cases and for advising the Commission on factfinding issues.

Claims for benefits are considered wholly barred unless written notification of an accident is given to the employer, or to the Industrial Commission, within 180 calendar days of the time and place where the accident or the injury occurred. In the past, the employer had to be notified within 1 year and the Commission within 3 years.

The term "presbycusis," defined as a hearing loss common to persons of advanced age and considered to be due to the general environment rather than to industrial conditions, has been deleted from the law.


Sole proprietors or partners are newly permitted to elect coverage for themselves after proper notification to be included for coverage has been submitted to the Commissioner of Labor and Industry.


New coverage may now be elected by any county, city, town, or political subdivision for specified volunteers or officers and employees serving on any board or commission created or controlled by the local governing body.

The definition of "injury of the brain" was changed from an injury which resulted in incurable imbecility or insanity to a severe injury that causes the victim to be permanently unemployable in any gainful employment.

Any employee who is sexually assaulted and who can identify the attacker may opt to pursue an action at law against the attacker even if the accused is the employee's employer or co-employee, instead of pursuing workers' compensation benefits.


Workers' compensation benefits must be furnished to any worker or beneficiary who may also be eligible for, or claims, benefits under the U.S. maritime laws as a result of an asbestos-related disease under certain conditions.

Compensation payments for a registered apprentice or trainee will be determined on the basis of the actual wage rate during employment, instead of using the worker's hourly wages.

Guidelines or standards used during medical examinations to determine the extent or percentage of a permanent disability must be developed by the Department of Labor and Industry. The Department is responsible for investigating self-insurer compliance with insurance-reporting requirements and for monitoring the quality and objectivity of examinations and reports.

West Virginia

Health care providers who fraudulently secure or attempt to secure payment from the Workers' Compensation Fund for services provided to injured workers are guilty of a misdemeanor and subject to a fine of not more than $10,000, or imprisonment of not more than 12 months, or both.

Chiropractors, osteopaths, podiatrists, optometrists, vocational rehabilitation specialists, pharmacists, ophthalmologists, and others practicing medicine and surgery are now included in the list of persons who render medical treatment and services to injured employees for which the Workers' Compensation Commissioner sets a fee schedule for services.

Approval has been authorized for transfer of up to a maximum of $30 million from the Coal Workers' Pneumoconiosis Fund to the General Revenue Fund to assist in financing government operations.


The average weekly wage used in determining compensation for scheduled permanent partial disability was increased ftom $175.50 to $181.50, resulting in a maximum weekly benefit of $121, as of April 1, 1988. On January 1, 1989, the average weekly wage will increase to $187.50, resulting in a maximum weekly benefit of $125.

Deleted from the definition of "injury" are injuries causing mental harm or emotional stress or strain without physical trauma arising from exposure to conditions or circumstances beyond those common to occupational or nonoccupational life, Injured workers are now entitled to receive dental care services under the law.
COPYRIGHT 1989 U.S. Bureau of Labor Statistics
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Author:Tinsley, LaVerne C.
Publication:Monthly Labor Review
Date:Jan 1, 1989
Previous Article:Changes in unemployment insurance legislation during 1988.
Next Article:Labor market completes sixth year of expansion in 1988.

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