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Protect Your Treasure | Understanding the Latest Workers’ Compensation Laws

High seas, salty air and sword fights. It may be hard to believe, but the first historical accounts of workers’ compensation are linked to pirates. As motivation to participate in this dangerous trade, they were often rewarded in gold if they sustained significant injuries. The bigger the sacrifice, the bigger the reward.

A pirate who lost his right arm was compensated more than one who lost his left arm, and if someone was unfortunate enough to lose both, he’d get an even higher combined reward for the pair. Workers’ compensation has changed drastically since this era. It is no longer intended to encourage bravery in dangerous situations, but rather serve as a security net when injuries occur despite regulated safety efforts. It is one of the most important insurance coverages that an employer can have because it not only protects the workers, but the business as well. As most things do, workers’ compensation laws change over time and can impact how claims are adjudicated and benefits are received. It is crucial that employers remain current on these laws so that they understand their responsibilities to employees, as well as their rights as employers.Workers’ Compensation

Case in Point
To illustrate how significantly these laws can change, let’s take a look at some recent revisions to Iowa’s workers’ compensation statutes. Governor Terry Branstad signed the Workers’ Compensation Reform Bill earlier this year, which essentially led to a major overhaul of Iowa’s workers’ compensation laws. We have outlined some of the key revisions that employers should know and understand.

An injury to a shoulder will no longer be considered an injury to a body as a whole, which is valued at 500 weeks and industrial disability. The shoulder injury will be considered a member injury with a maximum benefit payment of 400 weeks.

Industrial disability will no longer be allowed for the body as a whole if the injured worker returns to the same employer, doing the same occupation at the same or a higher wage. The employee will receive the functional impairment based on the medical rating and will be subject to a 500-week maximum. If the employee is terminated, industrial disability would still apply. In addition, if the employee returns to work and is terminated shortly thereafter, that issue can then be reviewed to allow the consideration of industrial disability.

It has been clarified that permanent partial disability begins when the injured worker reaches maximum medical improvement (MMI) and the extent of disability can be determined by the doctor using approved American Medical Association (AMA) guidelines.

If drugs and / or alcohol show up in an employee’s system after a work-related injury, the employee now carries the burden of proof to establish that he or she was not intoxicated at the time of the injury, or that intoxication was not a substantial factor in causing the injury.

Compensability regarding a pre-existing disability has been clarified to state that an employer is liable for compensation only to the portion of an employee’s disability that arises out of his or her employment. An employer is not liable for a pre-existing condition that occurred during a previous work-related injury with this employer or past employers, or for causes unrelated to employment.

The revised statute restricts recovery for plaintiff attorneys by no longer allowing them to recover fees for compensation that were voluntarily paid or agreed to be paid. Plaintiff attorneys can only collect money that they can demonstrate would not have been paid except for their efforts.

Benefit eligibility is no longer allowed for injured workers who are domiciled in Iowa and injured elsewhere. The employer has to have a place of business in Iowa where employees regularly work to collect Iowa benefits.

Ignorance Isn’t Bliss
Given recent administration changes on a state and national level, as well as repeated criticisms from the Department of Labor (DOL) on workers’ compensation programs, more policy changes and reforms are expected throughout the country. Employers have a number of obligations to follow under each state’s workers’ compensation system. If these obligations aren’t met, employers can be fined and face various lawsuits. For example, if an employer does not have the workers’ compensation coverage required by law, employees may be able to sue the company or, in some states, file a workers’ compensation claim against a special uninsured employers’ fund.

Employers are also required to post notices and inform employees of their legal rights and various workers’ compensation benefits. This information must be displayed in a convenient location that is frequented by employees during normal working hours (i.e., an employee lounge). When an injury does occur, employers need to provide a claims form, as well as written information outlining the employee’s rights under the workers’ compensation system. Failure to follow and understand the latest workers’ compensation laws could prevent an employer from meeting requirements such as these, ultimately putting the company at great risk.

Ready for Reform?
It’s probably safe to assume that most employers would prefer to embrace the workers’ compensation system of today and make progress away from the one used by pirates, but keeping up with the changes can be difficult. We encourage employers to pay close attention to reform efforts, and to enlist professional guidance when statutes change within their own states. Staying on top of this information can reduce risk and help employers address workplace injuries in accordance with the law. SilverStone Group’s Claims and Safety Team is dedicated to following emerging legislation and eager to help employers comply with the newest workers’ compensation laws. For more information and additional guidance on this topic, contact one of our experienced claims professionals.

This article originally appeared in the 2017 | ISSUE THREE of the SilverLink magazine, under the title “Protect Your Treasure | Understanding the Latest Workers’ Compensation Laws.” To receive a complimentary subscription to the SilverLink magazine, sign up here.

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