Expand Workers' Comp Benefits

Section 2 repeals the waiting period, in order to expedite timely first payment to injured workers.

Section 3 creates a committee consisting of medical professionals, busi- ness, labor, the board, and appointees of the Legislature to conduct an annual review of the board's medical fee schedule. It prohibits the board from requiring out-of-state physicians from complying with the board's rules and regulations. It requires the employer or carrier to file with the board any medical records concerning a claim that come into the employer or carrier's possession. This will provide meaningful information and expertise to the board in adopting a fee schedule, codi- fy the existing principle that the board lacks the power to enforce its regulations outside of New York State, and ensure that information essential to a claim is equally available to the board and the injured worker.

Section 4 clarifies that the term "independent medical examiner" is applicable only to physicians who examine on behalf of an employer or carrier. It also re-establishes the legislative intent that medical treatment guidelines be used to expedite, not deny, treatment for injured workers. It expands the threshold for authorization for special services not covered by the medical treatment guidelines from $1,000 to $2,000. Taken together, these amendments will expedite the delivery of medical treatment to injured workers.

Section 5 clarifies that a health care provider has a right to be heard by the board on the issue of whether a medical bill should be paid. This will enable health care providers to adjust payment disputes directly with employers and carriers, instead of requiring injured workers to do so on their behalf.

Section 6 establishes that the criteria for permanent total disability include the inability to perform sedentary work and approval for Social Security disability benefits as a result of the compensable injury. It defines temporary total disability as the inability to perform the at-injury employment or a reasonable alternative position offered by the employer. It increases the maximum award for a permanent facial disfig- urement from twenty thousand dollars to thirty thousand dollars. It ensures that benefits awarded for significant loss of function of a limb will be paid for the period intended by the statute, which is the date of eligibility for Social Security retirement benefits. It clarifies that a finding of permanent partial disability for an injury to one body part, unaccompanied by an award, does not preclude the payment of a schedule loss award, but provides a credit for payment of a schedule loss award against any later award for permanent partial disability. It clarifies that awards for permanent disability are payable to the depen- dents of a worker who dies for reasons other than the workplace injury.

It reduces the time frames that define protracted healing period in recognition of the impact of advances in medicine. It clarifies that an injured worker's "loss of wage-earning capacity" is the inverse of his or her "wage-earning capacity." It establishes a statutory guideline for the circumstances in which the injured worker must show attachment to the labor market as a condition of receiving benefits. It increases the maximum compensation rate for workers injured between March 13, 2017 and July 1, 2017 from $400 per week to $500 per week to correspond to the effective date of the duration limits on permanent partial disability.

It indexes the minimum benefit rate as twenty-five percent of the maxi- mum benefit rate. It establishes a cost of living adjustment mechanism to ensure that compensation benefits remain a meaningful source of wage replacement for workers who are permanently totally disabled and for the dependents of deceased workers. Taken together, these provisions ensure that injured workers will receive full and fair compensation for work- related injuries in view of the benefit limitations that occurred in 2007 and 2017.

Section 7 applies the cost of living adjustment to permanent total disa- bility and death benefits.

Section 8 eliminates the "remarriage penalty" for the surviving spouses of deceased workers. It eliminates the offset provision for social secu- rity survivor benefits for the surviving spouses of employees of private voluntary hospitals who died as a result of September 11, 2001 and for the surviving spouses of workers who died on or after January 1, 2016.

Each of these anachronistic provisions reduce wage support for the survivors of workers who lost their lives in the course of their employ- ment.

Section 9 creates a requirement for the board to provide service to workers with limited English proficiency. This provision will help to ensure that workers with limited English proficiency receive adequate information and are able to access the benefits provided by law.

Section 10 requires the employer to show that it was prejudiced by late notice if that is the basis for the denial of a claim for compensation.

This remedies the current interpretation of the law, in which the injured worker is required to show that the employer was not prejudiced by late notice.

Section 11 requires the board to hold at least one hearing in every claim in order to be certain that workers are properly advised of their rights under the law.

Section 12 creates a clear statutory mechanism for attorney fees in workers' compensation claims. This will provided much-needed clarity about attorney fees and provide injured workers with specific informa- tion about legal representation.

Section 13 repeals the conciliation program, which has not been utilized. It clarifies that the board may not issue a decision without a hearing that provides the parties with notice and an opportunity to be heard. It requires the board to keep a stenographic record of all hear- ings. This will end the issuance of non-hearing determinations that do not comply with the statutory process, improving the delivery of infor- mation and enhancing access to benefits for injured workers.

Section 14 limits an employer or carrier's lien right to the correspond- ent damages in a personal injury case, since there is no workers' compensation award for pain, suffering, or the loss of enjoyment of life. This will permit injured workers to retain some benefit from pursuing a personal injury lawsuit to the extent the personal injury recovery does not duplicate benefits provided by the workers' compen- sation law.

Section 15 reduces the threshold for eligibility for the safety net to a fifty percent loss of wage earning capacity and provides a statutory definition for the "extreme hardship" requirement, and eliminates the arbitrary time frame within which the injured worker must make a safety net application. It establishes a requirement for return to work programs in order to return injured workers to gainful employment and thus limit the use of the safety net. These provisions will ensure that permanently disabled workers with significant injuries are provided with every opportunity to return to gainful employment, and adequate wage-re- placement benefits if they are unable to do so.

Section 16 creates a requirement that insurers provide specified infor- mation to the board in order to create transparency about the use of employer premiums and to enable employers to compare insurers.

Section 17 requires annual premium audits of employers in order to ensure a level playing field and reduce costs resulting from employer fraud.

Section 18 codifies the rule in Liberius v. City of New York and Hazan v. World Trade Center Volunteer Fund that the board may not use "subject numbers" and other informal administrative guidance as a substitute for the regulatory process or appellate decisions. The judicial process affords litigants a due process right to an impartial determination based on the evidence and the law, and the latter consists of the stat- ute, cases, and duly enacted regulations, as opposed to informal agency guidance.

Section 19 expands the coverage and increases the penalties for discrim- ination and retaliation against injured workers in the workers' compen- sation system. The existing statute and penalties are wholly inadequate to protect injured workers from workplace discrimination or to compen- sate them when it occurs.

Section 20 clarifies that the term "independent medical examiner" is applicable only to physicians who examine on behalf of an employer or carrier. This amendment will expand access to health care providers for injured workers who require the assistance of expert opinion in obtain- ing compensation benefits.

Justification

The 2007 and 2017 amendments to the Workers' Compensation Law were intended to improve benefits for injured workers while reducing costs for employers. Unfortunately, recent studies have shown a deterioration not only in worker benefits, but also in the ability of workers to obtain access to those benefits. The problem is particularly acute for low wage and immigrant workers, who face a wide range of obstacles in obtaining information and pursuing the benefits provided by law.

The Workers' Compensation Reform Bill of 2019 preserves all of the elements of previous reform legislation, while ensuring that the bene- fits now provided by law are delivered to injured workers in a manner consistent with the fundamental intent of workers' compensation law: swiftly, surely, and through a worker-friendly process. At the same time, it expands on previous initiatives intended to provide transparen- cy for employers and to reduce costs for employers who maintain safe workplaces.

The Reform Bill covers four areas in which the workers' compensation system can be substantially improved for workers, employers, and health care providers while retaining all of the previous reforms. Those areas are (1) medical care; (2) worker benefits; (3) due process and access to benefits; and (4) transparency.

Medical Care The 2007 reform legislation directed the Chair of the Work- ers' Compensation Board to prepare a list of pre-authorized procedures in order to reduce delays in the delivery of medical treatment. Regret- tably, the Board's "Medical Treatment Guidelines" have operated as a "ceiling" on available medical treatment, rather than a "floor" to expe- dite a level of basic treatment. Because this is contrary to the original intent of the Legislature, Section 4 of the bill provides that the Board's Guidelines may only be used to approve, not deny, treatment and that requests for treatment that vary from the Guidelines should be decided as provided by the statute. In order to further reduce time-con- suming and costly disputes that delay a worker's recovery and diminish positive outcomes, the dollar amount required for pre-authorization is increased from $1,000 to $2,000. An employer or carrier remains free to dispute a medical bill in accordance with established procedures.

Under current practice, health care providers whose bills are disputed are denied the right to be heard on the issue of payment. Instead, the burden is placed on the injured worker, who is in an inferior position to the health care provider where the issue relates to payment of a medical bill. Accordingly, Section 5 of the bill expressly provides that health care providers have standing to address payment of their bills. The workers' compensation medical fee schedule has been the subject of chronic complaint and debate, has generated substantial friction within the system, and results in inadequate and untimely reimbursement to health care providers. Section 3 of the bill creates a committee consisting of medical professionals and others to address these issues in a systematic and ongoing manner. Worker Benefits.

Section 6 of the bill builds upon the 2007 and 2017 reforms in order to further define the circumstances in which benefits are due and to correct certain unintended consequences that have reduced benefits in a manner inconsistent with the legislative intent. This section (a) reduces friction and litigation associated with the determination of permanent total disability; (b) defines temporary total disability for the first time; (c) increases compensation for permanent facial disfig- urement, which has remained unchanged for over two decades; (d) ensures that workers who are permanently disabled from work due to a significant injury to a major limb remain eligible for wage replacement benefits until they reach retirement age; (e) expands the recognition included in the 2017 reform legislation that periods of temporary total disability have become shorter as a result of medical advances to the definition of "protracted healing period;" (f) defines the term "loss of wage earning capacity" as the inverse of "wage earning capacity;" (g) specifies the circumstances in which an injured worker is required to demonstrate attachment to the labor market as a condition of receiving benefits; (h) increases the maximum weekly benefit rate from $400 per week to $500 per week effective March 13, 2007 in order to coincide with the effective date of the time limitations on permanent partial disability; (i) indexes the minimum benefit rate to correspond to previous indexing of the maximum benefit rate; and (j) establishes a cost of living increase for workers who are permanently totally disabled and for the dependents of workers whose death arose out of their employment. Taken together, these provisions ensure that the benefits provided by the law will be delivered to injured workers with less controversy, and further that statutory benefits will not diminish to irrelevance without further legislative action. Section 2 of the bill eliminates the statutory wait- ing period, which will reduce the time period an injured worker must go without compensation following a work related injury;

Section 8 of the bill eliminates the "remarriage penalty" for the surviving spouses of deceased workers, and also eliminates the statutory offset for social security survivors benefits for deaths that occurred on or after January 1, 2016 and for employees of private voluntary hospital who died on September 11th. Both the remarriage penalty and the offset for social security survivors benefits are anachronisms that unnecessarily reduce or terminate benefits for the survivors of workers who died in the course of their employment.

When a worker is injured because of the negligence of a third party, he or she is permitted to bring a lawsuit against the third party in addi- tion to receiving workers' compensation benefits. The Workers' Compen- sation Law gives the employer or insurer a lien on the workers' recov- ery, regardless of whether it is for lost wages and medical expenses (which are covered by workers' compensation) or pain and suffering (which is not). As a result, much or even all of an injured worker's personal injury recovery is often repaid to the employer or insurer, leaving the worker with little or nothing.

Section 8 of the bill limits the workers' compensation lien to the portion of a personal injury recovery that corresponds to the workers' compensation benefits paid. This prevents a double recovery while ensur- ing that the worker will be compensated for the portion of his or her damages that are not covered by workers' compensation.

Due Process and Access to Benefits.

It is challenging for injured workers to access the workers' compen- sation system and to obtain benefits. Low wage and immigrant workers often face substantial additional barriers related to language, litera- cy, and other considerations. It is critical that injured workers be provided with meaningful access to the system and full due process rights in order to be certain that they have adequate not ice of the issues at stake and benefits involved in their claim, and a full and. fair opportunity to be heard and to submit evidence in support of their claims.

Section 9 of the bill expands access to the system for immigrant workers by directing the Workers' Compensation Board to create and implement a language access plan. Section 19 of the bill expands the coverage of the statutory discrimination provision and increases the penalties for violations, further protecting the most vulnerable population of injured workers.

The 2007 reforms created a "safety net" for permanently disabled workers who could not return to work and who would face extreme hardship. This provision was amended by the 2017 reform legislation. Section 15 of this bill again amends the safety net provision to expand its coverage and to define "extreme hardship" in order to provide guidance about eligibility. This provision ensures that workers who are permanently disabled and cannot return to work receive the full measure of benefits provided by the law. It also requires the creation and implementation of meaningful return-to-work programs that will minimize the use of the safety nets, while benefiting both workers and employers.

For a variety of reasons, injured workers are not always able to obtain medical evidence from a treating physician. This problem exists in some geographic regions of the state in which there is a scarcity of medical resources, and within some medical specialties due to a shortage of providers who are authorized to provide treatment by the Board. Section 20 of the bill makes it clear that an injured worker may seek treatment or a second opinion from a health care provider without such a provider being deemed an "independent medical examiner" subject to the complex technical rules applicable to employers and carriers. This provision will expand the availability of medical resources for injured workers while reducing technical and legal obstacles that can result in the delay or denial of their claims.

An employer is entitled to notice of a work-related injury within 30 days of the accident. However, the Board may exercise its discretion to excuse late notice if it finds that the employer was not prejudiced by the delay. Judicial decisions currently (and illogically) hold that the worker bears the burden of showing that the employer was not prejudiced, instead of requiring the employer to demonstrate prejudice. Section 10 of the bill would place the burden of proof on the issue of prejudice on the employer, which is in the best position to show what it would or would not have done had it received timely notice. The best means of communicating information to injured workers about their right to benefits and of providing meaningful due process is to provide a hearing. The 1996 workers' compensation reform legislation established a "conciliation" program with a number of statutory require- ments, including a conciliation meeting to ensure that the injured work- er understood the process and that the rights of the parties were adequately protected. This process has not been employed in the manner required by law in over two decades, and has instead been utilized to issue administrative determinations without the benefit of a meeting or hearing. Section 13 of the bill repeals the conciliation statute, there- by prohibiting the issuance of a decision without a hearing being held. Similarly, Section 11 of the bill requires the Board to hold at least one hearing in each claim in order to ensure the workers are provided adequate notice of their rights and at least one opportunity to be heard. Section 13 requires the Board to maintain a stenographic record of all proceedings in order to ensure that an accurate transcript is available for review and use by the parties and the Board. These amend- ments do not impair the ability of the parties to stipulate to findings of fact or law that may be implemented without a hearing.

Many injured workers choose to retain counsel to assist them in their claims. Unlike other areas of the law in which the lawyer and client enter into a written retainer describing a specific contingency fee or hourly rate, or where the attorney fee is fixed by statute, the Workers' Compensation Law presently requires attorneys to make an application to the Board for approval of a fee. This results in a lack of clarity and predictability for workers, who are unable to know what the legal fee will be at the time they retain counsel. Moreover, it can engender conflict between the attorney and client, and imposes a burden on the Board to consider and determine attorney fees in each and every case. Section 12 of the bill replaces this process by establishing a clear contingency-fee retainer. This will provide certainty and clarity to injured workers about their potential legal expense at the time they retain an attorney, ensure that the interests of the attorney and the injured worker are harmonious, and reduce the administrative burden of the Board.

Transparency.

Sections 1, 16 and 17 of the bill are intended to provide employers with transparency about their insurance costs and to relieve law-abiding and safety-conscious employers from the burden of subsidizing those who are not.

The Workers' Compensation Law currently prohibits an injured worker from suing his or her employer for personal injury, even where the employer was grossly negligent or the injury was the result of egregious safety violations. As a result of this provision, some portion of the cost of workplace injury is mutualized among all employers who purchase workers' compensation coverage from the same insurer. Section 1 of the bill permits an injured worker to sue his or her employer for personal injury where the accident was the result of the violation of a safety statute or regulation, or where the worker's benefits have been terminated as a result of permanent partial disability time limitations. This provision will encourage employers to focus on workplace safety, reducing the incidence of accidents and injuries and ultimately reducing costs across the board. It will more immediately reduce costs for safety-conscious employers, providing them with a competitive advantage. And it will provide a significant incentive for employers to create and implement the return-to-work programs required by Section 15 of the bill, reducing workers' compensation costs and increasing productivity. Similarly, section 17 of the bill would require all insurers to conduct annual premium audits of employers in order to identify misclassification, underreporting of payroll, and other activities that increase employer costs.

Section 16 of the bill would require workers' compensation insurers to provide the Board with information about how employer premium dollars are spent. This will enable the Board to publish a subset of the data, which employers can review in order to select an appropriate insurer.

Conclusion.

Taken as a whole, this legislation will improve access to, delivery and quality of benefits for injured workers, reduce litigation and friction within the workers' compensation system, and create opportunities for safety-conscious employers to reduce costs, increase productivity, and obtain a competitive advantage in the marketplace.

Legislative history

New bill

Fiscal implications

None

Effective date

This act shall take effect immediately.