2021 WORKERS’ COMPENSATION LEGISLATION

As of yesterday, every legislative bill addressing workers’ compensation has now been heard in committee. Every bill remains in committee and no action has been taken on them, except LB 407, which was advanced to General File on 2/11/21. See below for a summary of each bill and a report on the testimony given at the public hearing on each. As always, if you have any questions about any of these bills, please call or email Dallas Jones or Paul Barta.

LB 52 and LB 139: Business Liability Protections

These two bills propose to provide liability protection to Nebraska businesses from COVID-19 litigation. Neither will likely impact whether an employer is liable for workers’ compensation benefits to its employees who contract COVID-19. LB 52, introduced by Senator Lathrop, is limited in its details and is likely intended to be amended as the process continues. While it does not currently exclude workers’ compensation claims from its application, we anticipate it eventually will if it is advanced.

LB 139, introduced by Senator Briese is far more detailed and provides that there shall be no civil liability for injury or death from COVID-19 unless a plaintiff can prove gross negligence or willful misconduct by clear and convincing evidence. The bill specifically provides that it does not affect the rights or limits under the Workers’ Compensation Act.

The public hearings for both bills were held on 2/1/21 in the Judiciary Committee. As expected, the testimony at the hearing involved numerous business affiliated entities supporting the bill, describing the necessity of protection of businesses from lawsuits filed by the public claiming damages for contracting COVID-19 on the premises of a business. Proponents pointed out that the bill is not necessary, as few such suits have been filed in the country.

Both bills remain in committee and no action has been taken on either.

LB 52

LB 139

LB 207: Reduce “Waiting” and “Retroactive” Periods

Introduced by Senator McDonnell, this bill is identical to LB 846 from last year. Its purpose is to reduce the “waiting time” from seven to three calendar days, and reduce the “retroactive” period from six weeks to two weeks.

While this bill would provide for a limited increase in benefits payable to employees, the cost to employers will be substantially greater than the relatively small increase in benefits. The bill will likely cause a greater number of claims to be converted from “medical only” to “indemnity” claims, resulting in increases in modification ratings and premiums.

The public hearing was held on 3/1/21 in the Business and Labor Committee. Tom Champoux of UNICO testified and explained how the additional benefits the bill would provide to an employee will cost the affected employer far more than the value of the additional benefits. Several other business entities, including NWCEF and LIBA, testified in opposition to the bill. Various non-profit organizations testified in support of the bill, making the case that employees need more money sooner when they cannot work. The bill remains in the committee and it has taken no action on it.

LB 207

LB 256: Releases/Leaving Future Medical Open/Medicare

The current statute requires court approval of any settlement where the employee is eligible for Medicare, is a Medicare beneficiary, or has a reasonable expectation of becoming a Medicare beneficiary within 30 months of the settlement, even if the settlement does not close out future medical. Introduced by Senator Matt Hansen, LB 256 provides that a release may be used to finalize an agreement to resolve all issues other than future medical where the employee is eligible for Medicare, is a Medicare beneficiary, or has a reasonable expectation of becoming a Medicare beneficiary within 30 months of the settlement. As a condition precedent to using a Release in these circumstances, all medical bills must be paid and any Conditional Payments made by Medicare must be reimbursed.

The public hearing was held on 2/1/21 and Dallas Jones testified on behalf of NWCEF in support of the bill. The bill was also supported by the Nebraska Association of Trial Attorneys.

The Workers’ Compensation Court administrator appeared in a neutral capacity, but identified concerns the Court has with the bill, pointing out that without Court review, mistakes which cost employees money will not be caught. And, without Court review, Conditional Payments made by Medicare may be missed, leaving the employee with the obligation to pay those.

The bill remains in committee and it has taken no action on it.

LB 256

LB 407: Mental-Mental Claims/Correctional Officers

Introduced by Senator McDonnell, LB 407 provides that “county correctional officers” in “high-population” may be entitled to workers’ compensation benefits for “mental-mental” injuries, in the same way that “First responders” and “Frontline state employees” may presently do so, by proving that the conditions which caused their mental condition “were extraordinary and unusual in comparison to the normal conditions of the particular employment.”

A “high-population” county is defined as one with more than 300 thousand inhabitants. Only Douglas County and Lancaster County fit that definition.

The public hearing was held on 2/1/21 in the Business and Labor Committee and no entities offered testimony in opposition to it. On 2/1/21 the committee advanced the bill to General File where it remains. No debate has occurred yet.

LB 407

LB 420: Rebuttable Presumption/Firefighters/Police Officers

Senator Pahls introduced LB 420, the purpose of which is to amend an existing statute which deals with Retirement and Pension plans of paid fire fighters and police officers. The bill presently provides that when a paid fire fighter or police officer suffers death or disability from specified diseases (hypertension/heart/respiratory defect/disease) (pre-screening required) and blood-borne infectious diseases and other listed diseases), there is a rebuttable presumption that paid fire fighter or police officer suffered those diseases or conditions as a result of his or her employment (not just for pension purposes). LB 420 amends that statute to apply the rebuttable presumption that those diseases are the result of an “accident or other causes while in the line of duty” for purposes of the Workers’ Compensation Act.  And the bill adds volunteer fire fighters as additional employees entitled to the presumption for purposes of Workers’ Compensation.

The public hearing was held on 2/8/21. Paul Barta testified on behalf of NWCEF in opposition to the bill, expressing concerns with the precedent that may be set by opening the door to the concept of changing the burden of proof with regard to any claim under the Workers’ Compensation Act.

The bill remains in committee and it the committee has taken no action on it.

LB 420

LB 441: COVID-19 Rebuttable Presumption

Introduced by Senators Hunt and Matt Hansen, LB 441 provides that there shall be a “rebuttable presumption” that COVID-19 is a compensable condition. The presumption applies to “essential workers”. The definition of “essential worker” appears broad enough to encompass nearly all, if not all, employees.

LB 441 creates a “Retroactive COVID-19 Claims Fund” to “pay for any costs from retroactive COVID-19 workers’ compensation claims” occurring between 3/23/20 to 2 years after the effective date of the act. The bill is vague in terms of how this Fund is to be funded. The implication is that it will be funded by the State, and the State may use any Federal COVID-19 relief funds that may be available. It is unclear whether private insurers and employers will have liability for such claims.

Curiously, the Department of Insurance is to administer the claims for COVID-19 that are allowed under the bill. How that Department will be able to do that is unclear. The bill provides that the Department “may contract with a third party” to process such claims.

Also curiously, the “rebuttable presumption” is that COVID-19 is the result of an “accident”. And the manner in which it can be rebutted is by “affirmatively proving that the employee contracted COVID-19 outside of the workplace.” In other words, to rebut the existence of an “accident”, the burden is to disprove “causation.”

To affirmatively prove that an employee contracted COVID-19 outside of the workplace will be nearly impossible in many cases, as the bill provides that an employee does not have to give notice “as soon as practical” as in all other workers’ compensation claims. Instead, an employee seeking benefits for contracting COVID-19 may give notice of the claim any time within 2 years of the effective date of the act. How evidence of non-work exposures to the virus may be located long after the fact is unclear.

The public hearing was held on 3/1/21. Dallas Jones testified in opposition to the bill on behalf of numerous organizations. He explained that only 14 states have some form of “rebuttable presumption” with regard to COVID-19, and of those, only one covers as many employees as proposed by LB 441. He pointed out the practical impossibility of rebutting the presumption given the proposal that employees may wait up to approximately 3 years to report and make a claim. Various other business organizations appeared in opposition, and significantly, the Director of the Department of Insurance testified in opposition to the bill, noting the $90,000,000 fiscal note tied to it.

The bill remains in committee and the committee has taken no action on it.

LB 441

LB 463: Remote Attendance of Employee Physician at DMI

An employee is presently allowed to retain a physician to attend a defense medical examination. Introduced by Senator Arch, the purpose of LB 463 is to allow an employee’s physician to attend a defense medical examination “by electronic means”.

Dallas Jones testified in opposition to LB 463 during the public hearing on 2/1/21, pointing out a number of unanswered questions and the concern that the added hassle may cause some physicians who are presently willing to perform defense medical examinations, may refuse to do so. He also proposed that if an employee may retain a physician to attend an examination scheduled by an employer “by electronic means”, an employer ought to be able to retain a physician to attend an examination scheduled by an employee’s representative “by electronic means”. The bill remains in committee and the committee has taken no action on it.

LB 463

LB 667: Confidentiality of First Reports of Injury

Introduced by Senator Halloran, the purpose of LB 667 is to require the Workers’ Compensation Court to withhold workers’ compensation first reports of injury from disclosure to the public for a period of 60 days from the date of filing, with certain designated exceptions.

The court testified in a neutral capacity, but advised the committee that if this were to be implemented, the Court would incur costs to set up a new system to ensure compliance with it.

The public hearing was held on 3/1/21 and the committee has taken no action on it.

LB 667