2020 NEBRASKA WORKERS’ COMPENSATION LEGISLATION
Committee hearings began January 21st and will continue through the latter part of February. As discussed below, note that three workers’ compensation bills—LB 846, LB 926 and LB 963—will be heard by the Business and Labor Committee on Monday, January 27th. Floor debate on bills “carried over” from last session began on January 13 and will continue during morning sessions of floor debate by the Legislature. Two additional significant dates of note are:
Jan. 23 – Last day to introduce bills
April 23 – Sine die adjournment (tentative)
CARRYOVER LEGISLATION
All legislation that was not adopted or indefinitely postponed last session was carried over for further consideration during the 2020 legislative session. The carryover legislation which addresses workers’ compensation includes the bills summarized below:
LB 19 – Confidentiality of First Injury Reports:
Introduced by Senator Tom Briese (Albion), on behalf of NWCEF, LB 19 would require First Reports of Injury to be withheld from the public with certain designated exceptions.
The bill is designed to curb solicitations, which injured employees receive from attorneys once the “First Report of Injury” is filed with the Workers’ Compensation Court. While LB 19 would limit the disclosure of first reports of injury to the general public, it does provide exceptions for the Workers’ Compensation Court to release the reports to employees mentioned in the report or the employee’s attorney, to the employer that is a party to the report or its attorney or authorized agent, or in connection with a state or federal investigation or examination or for use by the state or federal government to compile statistical information.
Status: This bill remains in the Business and Labor Committee.
LB 487 – Evidence-Based Drug Formulary:
Senator Andrew La Grone (Gretna) has introduced legislation that would establish an evidence-based drug formulary consisting of Schedule II, III, IV and V prescription drugs in connection with workers' compensation claims with a date of injury on or after January 1, 2020. Over-prescribing of opioids is an epidemic which brings about delays in the ability of employees to return to work as a result of addiction and dependencies resulting from over-utilization of pain killers.
Status: This bill remains in the Business and Labor Committee.
LB 408 – Death Benefits:
Senator Dan Quick (Grand Island) is the sponsor of legislation (LB 408) that would provide, upon the death of an employee, if there is no spouse, child, or other dependent entitled to benefits, that $25,000 is to be paid to the personal representative of the estate of the decedent.
Status: This bill remains in the Business and Labor Committee.
LB 448 – Burial Benefits:
Introduced by Senator Mike McDonnell (Omaha), LB 448 would revise the manner in which an employer’s responsibility for burial expenses is determined. As originally introduced, the burial expense would have been set at 14 times the state’s average weekly wage. An amendment proposed by the Business and Labor Committee would set the burial expense at 12 times the state’s average weekly wage, to be automatically adjusted annually.
Status: LB 448 is on General File.
LB 526 – Temporary Disability:
Also introduced by Senator McDonnell, LB 526 would provide that temporary disability shall continue until the later of (a) any permanent disability, as measured by permanent impairment for a scheduled member injury, has been determined or, in the event of a claim payable under loss of earning capacity, until a loss of earning capacity evaluation has been issued or (b) thirty days after the employee has been given notice of termination of temporary disability benefits. Upon termination of temporary disability benefits, the employer would be required to provide copies of all evidence relied upon in making the determination to cease benefit payments and if evidence from outside of the treating physician has been relied upon, the employee shall be entitled to seek a medical finding by an independent medical examiner to be paid for by the employer, with such independent medical examiner to be chosen by the employee.
LB 526 would effectively allow an employee to be working full-time once temporary disability benefits are ceased but continue to receive temporary disability benefits for a period of 30 days, while earning full wages.”
Status: This bill remains in the Business and Labor Committee.
NEW LEGISLATION
The following legislation relating to workers’ compensation has been introduced this session and referred to the Business and Labor Committee:
LB 765 – Duties of Attorney General
Introduced by Senator Brett Lindstrom (Omaha), LB 765 removes the duty of the Attorney General to prosecute employers, insurers and risk management pools which do not file reports required of them by the Workers’ Compensation Court. Presumably any prosecutor who has authority to prosecute such Class II midemeanors would have authority to prosecute such failures to file required reports.
Status: In Committee
LB 846 – “Reduction of Waiting Period”:
Introduced by Senator Dan Quick (Grand Island), LB 846 would reduce the workers’ compensation “waiting time” period from seven to three calendar days and the time period before benefits must be paid during the “waiting time” would be reduced from six weeks to two weeks.
While on the surface the bill might appear to involve a relatively small increase in benefits for a particular claim, the bill will reduce the number of claims that are “medical only” and increase the number of claims that involve payment of indemnity benefits, negatively impacting an employer’s mod rating, thereby increasing the cost of workers’ compensation to employers in Nebraska.
Status: In Committee. Public hearing in the Business and Labor Committee held on January 27th.
LB 926 – Employee Classification Act
Introduced by Senator Matt Hansen (Lincoln), LB 846 would (a) authorize the Commissioner of the Department of Labor to issue citations to a contractor when an investigation reveals that the contractor has violated the Employee Classification Act; (b) authorize administrative penalties of not more than $500 per misclassified individual for the first offense and not more than $5000 per misclassified individual for each second or subsequent offense; (c) provide a contractor with the ability to contest a citation or penalty within 15 days after the date of the citation or penalty; and (d) provide that the fine of $500 may be issued by citation, rather than after the current notice and hearing requirements under the Employee Classification Act.
Status: In Committee
LB 963 – Mental Claims , Resilience Training, First Responders:
Introduced by Senator Tom Brewer (Gordon), the purpose of the legislation is to provide for “resilience training” for first responders to mitigate the chances that the conditions of employment of first responders causes mental illness. To incent first responders to undergo the training (which is at no cost to the first responder), the legislation modifies the burden of proof a first responder must meet to recover workers’ compensation benefits for "mental–mental" injuries. The bill would allow a first responder to establish prima facie evidence of a work-related mental injury or mental illness if (a) the first responder has undergone a mental health examination upon entry into service as a first responder or subsequent to such entry and before the onset of the mental injury or mental illness and the examination did not reveal the mental injury or mental illness for which the first responder seeks compensation; (b) prior to the employment conditions which are claimed to have caused the mental injury or mental illness, the first responder had participated in resilience training and updated the training at least annually thereafter and (c) testimony or an affidavit from a mental health professional that the first responder suffers from a mental injury or mental illness as a result of the employment conditions.
The significant manner in which the burden of proof is modified is that the legislation allows physician’s assistants, APRNs, licensed mental health counselor, and clergy to provide the requisite causation opinion.
Status: In Committee. Public hearing in the Business and Labor Committee held on January 27th.
LB 1101 – Permanent Disability for Multiple Member Injuries:
Introduced by Senator Steve Halloran (Hastings), LB 1101 would clarify two aspects of existing law regarding the permanent disability to which an employee is entitled when the employee injures two or more extremities in one accident. Its purpose is to restore the original intent of LB 588 so that employees who suffered injuries to separate extremities, each of which result in permanent restrictions, may be entitled to permanent disability based on the employee’s loss of earning capacity, if the combined effect of those injuries results in a loss of earning capacity of 30% or more. The intent of LB 588 was not to compensate employees based on their loss of earning capacity who suffer injuries to the same extremity, or who suffer injuries to two extremities but only one injury limits their ability to work. The theory underlying LB 588, as explained by Senator Lathrop during floor debate of LB 588, was that, for example, “someone who works in the meat packing industry” and “has bilateral carpal tunnel syndrome” “would only receive a few thousand dollars if they were treated as two members. But because it may be a career ending type of an injury, if they have a loss of earning capacity of 30 percent or greater, then they are treated as a body as a whole.” Those who testified at the hearing on LB 588 illustrated the need for the amendment by providing examples of injuries to separate extremities which together, disabled employees far more than contemplated by the schedule of benefits. For example, Senator Nantkes, while explaining purpose of the bill to the Business and Labor Committee, testified that “[i]n some cases involving the loss of use of multiple parts of the body, the schedule does not provide an adequate method of determining compensation.” Senator Nantkes continued, “[f]or example, an unskilled worker who incurs the loss of use of both hands would receive two-thirds of his wages for 125 weeks for each hand.” In that situation, the proposed bill “would allow the court to take into consideration the effect of loss of use of multiple members.” While questioning Lee Loudon, who testified on behalf of NATA, Senator Lathrop used examples of workers with “two broken arms” and “two broken legs.” Steve Howard, testifying on behalf of AFL-CIO, used examples of a worker who “blows a knee has a rotator cuff problem” and a worker who suffered “bilateral carpal tunnel syndrome”. During floor debate, Senator Nantkes again illustrated the need for the amendment by using the example of a worker with “bilateral shoulder injuries” and how that affected the employee’s ability to work and earn wages.
Status: Public Hearing Scheduled in the Business and Labor Committee on February 10th.
LB 1103 – Release and Leaving Future Medical Open:
Introduced by Senator Matt Hansen (Lincoln), LB 1103 would clarify that a release may be used to finalize an agreement to resolve all issues other than future medical care even if the employee is a Medicare beneficiary, or has a reasonable expectation of becoming a Medicare beneficiary.
Status: Public Hearing Scheduled in the Business and Labor Committee on February 10th.
LB 1126 – Penalties and Attorneys’ Fees for Non-payment/authorization of Medical Expenses:
Introduced by Senator Tony Vargas (Omaha), LB 1126 provides that the Workers’ Compensation Court may assess attorneys’ fees, and a penalty of up to $500 per day, when an employer or insurer fails to “authorize” or give “assurance” of payment of a medical service where there is no reasonable controversy as to the compensability of the medical service. It would further provide that the reasonable controversy must exist “at the time of” when the authorization is refused. In other words, an employer or insurer would have 30 days in which to obtain evidence to create a reasonable controversy supporting a denial of “authorization” of payment, and even if the employer obtained such evidence by the time of a hearing, the employer would still be subject to an award of attorneys’ fees and the penalty.
Accordingly, an employee or his/her attorney could take as much time as they need to develop the evidence necessary to meet a prima fascia showing of compensability of a proposed medical service, but employer or insurer would have on 30 days to develop contrary evidence, and in the absence of that, attorneys’ fees and penalties would be awarded, regardless of what evidence exists at the time of the hearing.
Status: In Committee
LB 1127 – Contempt Powers of Workers’ Compensation Judges:
Introduced by Senator Tony Vargas (Omaha), LB 1127 would clarify that a judge of the Workers’ Compensation Court has the same authority to issue contempt orders in accordance with the Rules of Civil Procedure as any other State Court Judge.
Status: In Committee
LB 1128 – Bad Faith:
Introduced by Sentator Tony Vargas (Omaha), LB 1128 would provide a cause of action for “bad faith” against a workers’ compensation insurer, or its agents, if the insurer or its agent denied benefits or authorization of benefits without a reasonable basis “at the time of the denial”, and the insurer or its agent knew or should have known that there was no reasonable basis for denial, or if the insurer engages in any acts or practices described in Section 48-146.02 (2) (failure to comply with an obligation under the Nebraska Workers’ Compensation Act). LB 1128 would also create a five year statute of limitations for any claim of bad faith denial of workers’ compensation benefits.
The bill provides that the action for bad faith “may be brought in a civil action in any court of competent jurisdiction. It does not specify the damages which could be recovered.
Status: In Committee
LB 1129 – Independent Contractors Considered Employees:
Introduced by Senator Tony Vargas, LB 1129 would modify section 48-116, which currently provides that an owner who lets a contract to contractor, or a contractor who lets a contract to a subcontractor, shall be liable for workers’ compensation benefits of the employees of the contractor or subcontractor, if the owner or contractor fails to require the contractor, or subcontractor, to have in place a workers’ compensation policy which pays workers’ compensation benefits to employees of a contractor or subcontractor. This legislation provides that where a person, firm or corporation lets a contract to a contractor or subcontractor and fails to require the contractor or subcontractor to procure a policy of workers’ compensation benefits, the contractor or subcontractor shall be considered an employee entitled to workers’ compensation benefits.
Status: In Committee
If you have any questions about current legislation or Baylor Evnen, LLP contact Dallas Jones or Paul Barta.