2014 Tennessee Workers’ Compensation Legislative Update

1. 2014 Tennessee Workers’ Compensation Legislative Update Jill Talbert, TNSIA Executive Director JILL TALBERT

2. PC 837- Ombudsman & WC Appeals Board • Legislation passed in 2013 established the Ombudsman Program and the WC Appeals Board • This legislation clarifies the ombudsman’s authority • It also states that the unrepresented persons have a right to an ombudsman’s services • States that an ombudsman shall not be called to testify in any proceeding • No statement or representation made to an ombudsman shall be considered by a workers' compensation judge for any purpose

3. PC 837- Ombudsman & WC Appeals Board • As drafted, the legislation gave the WC Appeals Board appointment authority to the Speaker of the House, Lieutenant Governor and Governor on a rotating basis • As passed, the Governor has sole appointment authority but must make the appointments “in consultation” with the Speaker of the House and the Lieutenant Governor

4. PC 765- Uninsured Employers Fund Benefit Provision Act • This new law gives the WC Administrator discretion to pay up to $40,000 of temporary disability and medical benefits to a qualifying employee injured and working for an employer who violated the law by failing to carry WC insurance • To qualify, an employee must: • have suffered an injury while working for an uninsured employer • be a Tennessee resident • pursue a claim against the employer in the court of WC claims • Within 60 days of injury, report to the Division that the employer lacks coverage • have suffered an injury on or after July 1, 2015

5. PC 765- Uninsured Employers Fund Benefit Provision Act • If the employee prevails, the Division can file a lien against the employer’s property to cover the benefits paid to the employee from the Fund • If the administrator makes any payments of temporary disability or medical benefits and the employee fails to prosecute the claim, the division has authority to seek recovery of the payments from the employee.

6. PC 633- Leased Owner/Operators of Semi Trucks • Legislation passed codifying case law on this issue • TN law excludes application of TN WC law to common carriers but it allows the common carrier to provide insurance to a leased owner/operator upon written agreement • This law establishes a venue for the contract dispute • Requires proof of compliance with contractual terms in a separate suit before a WC claim can be filed

7. PC 903- Workers’ Compensation Clean-up legislation Two important substantive components: • Amends the procedure for assessing uninsured employers fund penalties • Provides a “safety-valve” provision for claims

8. PC 903- New Penalties Procedure for Uninsured Employers Fund • New penalties procedure for uninsured employers fund • Division can now assess a penalty upon receiving notice of a coverage violation (happens before the hearing now, prior procedure was after the hearing) • Defendant can either pay or request UAPA contested case hearing • Hearing is set within 45 days of request (prior procedure was 30 days)

9. PC 903- “Safety Valve” Provision • The new TCA 50-6-242 provides clear, predictable criteria for determining which workers are eligible to potentially receive additional disability benefits • Section 242 exists to provide additional benefits to injured workers who do not return work • In these cases, such workers receive benefits in addition to the benefits they are eligible to receive when applying the appropriate multipliers to that worker's impairment rating

10. PC 903- “Safety Valve” Provision • Prior Section 242 allowed for additional disability benefits if at least (3) of the following facts concerning the employee are true: • Lacks a high school diploma or GED or cannot read or write on a 8th grade level • 55 years of age or older • No reasonably transferable job skills from prior vocational background and training; • No reasonable employment opportunities

11. PC 903- “Safety Valve” Provision Issues with prior Section 242 • Section did not take into account the younger, injured workers who do not return to work and therefore a gap existed in this section. • Some employers found the criteria regarding the ability to read or write on the grade eight level to be too difficult to evaluate.

12. PC 903- “Safety Valve” Provision • The new Section 242 took effect on July 1, 2014 but it has a built-in sunset as it does not apply to injuries occurring after June 30, 2016. • The new Section 242 allows for an additional award of benefits if three facts concerning the employee are true: • Impairment rating of at least ten percent (10%) to the body as whole, that has been determined according to the AMA guides as defined by § 50-6-102, • Authorized treating physician certifies that employee cannot perform pre-injury occupation. • Employee is earning less than 70% pre-injury wage

13. PC 903- “Safety Valve” Provision These benefits will only be awarded if presiding workers’ compensation judge: • first determines, based on clear and convincing evidence, that limiting the employee’s recovery to the benefits provided by § 50-6-207(3)(B) would be inequitable in light of the totality of the circumstances and • makes findings that all three facts are true

14. PC 903- “Safety Valve” Provision • In such circumstances, the employee may receive disability benefits of 66 2/3% of the employee’s pre-injury average weekly wage or salary • This award is for a period not to exceed 275 weeks inclusive of the benefits provided to the employee under § 50-6-207(3)(A)