Changes to Workers’ Compensation and Unemployment Insurance Under Review

The Senate Economic Development, Housing, and General Affairs Committee is working on legislation that could increase costs for workers’ compensation while studying changes to UI that could also impact costs.  The Committee is reviewing two bills passed by the House, H.55 and H.217.  These particular bills are not themselves concerning – following testimony by AIV and the Department of Labor, potentially harmful provisions were removed in the House Commerce and Economic Development Committee earlier this year and the bills now address studies and minor, largely technical changes to both unemployment insurance and workers’ compensation.  However, the Senate committee is considering combining them with provisions in S.101, which would be more concerning.  The following are summaries of the key provisions of the three bills:

H.55.  This bill would remove the exemption for UI participation for non-profits with fewer than four employees.  It would also require a report from the Department of Labor regarding “the potential impact of extending eligibility for unemployment insurance benefits to individuals who separate from employment due to urgent, compelling, or necessitous circumstances, including the individual’s injury or illness, to obtain or recover from medical treatment, to escape domestic or sexual violence, to care for a child following an unexpected loss of child care, or to care for an ill or injured family member.” (The original bill would have in fact expanded eligibility for these causes, which AIV opposed – click here for related post).

H.217.  This bill would set the coming year’s workers’ compensation premium surcharge for administrative support by the Department of Labor at 1.5%, and would establish that if legislation is not passed to set this rate (as required under current law) in future years, the previous year’s rate would apply.  It would also make permanent a currently temporary provision allowing workers’ compensation claimants to seek an additional 14 days of provisional benefits on top of the default 7 days of provisional benefits if they challenge a discontinuation.

S.101. This bill would include a number of workers’ compensation changes, including:

  • permit an injured worker to request preauthorization of benefits in addition to medical treatment
  • specify when an employer may require an employee who has been medically cleared to return to work to engage in a work search
  • amend the formula for determining the amount of compensation that is due to an employee with a temporary partial disability
  • expand dependency benefits and clarify cost of living adjustments to compensation paid to an employee with a temporary partial disability
  • increase penalties for late benefit payments
  • permit the Commissioner to award the necessary costs of a proceeding to a claimant if the claimant prevails.

In addition, the Committee is expected to incorporate the provisions of H.55 and H.217 as passed by the House.  As introduced, S.101 would actually expand UI eligibility in the areas where H.55 was amended by the House to study instead.  At this time, however, it appears the Committee will be looking to the House version of these provisions.

The key areas of concern for employers will be increasing dependency benefits and late payment penalties under workers’ compensation, which will increase the costs, and, if the Committee changes directions, any actual expansion of unemployment insurance eligibility for voluntary separation.

AIV is engaged in discussions over the bill with the Department of Labor and insurance and labor stakeholders, and will likely testify in the coming days as the Committee considers the legislation. Employers interested in more information, updates, or opportunities to engage with legislators on this issue are strongly encouraged to contact us at info@aivt.org.