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Board Releases Three Subject Numbers Concerning 2017 Workers’ Compensation Reform Legislation Including PPD Cap Provisions and Extreme Hardship Safety Net

On 4/25/17 and 4/26/17, the Board issued a trio of Subject Numbers providing interpretation and guidance on certain elements of the 2017 Workers' Compensation Reform legislation contained in the 2017-2018 Executive Budget (Part NNN of Chapter 59, Laws of 2017).

Subject Number 046-936 outlines the Board's interpretation of the 2017 Workers’ Compensation Reform legislation and provides some insight on how the Board intends to interpret key provisions of the reform legislation, answering some questions raised in Our Summary and Analysis of the Legislation, published earlier this month.

One of the major changes in the legislation was amendment of WCL §15(3)(w) to allow an insurance carrier or self-insured employer to take credit for temporary disability benefits paid after 130 weeks against the maximum number of weeks of indemnity benefits the claimant would be entitled to upon classification with a permanent partial disability. Because of the confusing way the new statute was worded, there was some question as to whether the 130-week waiting period would elapse 130 weeks after the date of injury or after payment of 130 weeks of temporary partial disability benefits. Additionally, there was some question as to whether all indemnity benefits payable after the 130-week waiting period would be subject to the credit or if the credit would only apply to temporary partial disability benefits.

It appears that the Board is taking the position most favorable to insurance carriers and employers in its interpretation of the statute. According to the Board, WCL §15(3)(w) was amended “to provide a credit for periods of temporary disability that extend beyond 2.5 years (130 weeks) from the date of injury. Insurance carriers may receive a credit against the maximum benefits payable for permanent partial disability for any periods of temporary disability paid beyond the 2.5 years (130 weeks). This rule applies to all injuries with dates of accident or disability after April 9, 2017.

This interpretation allows an insurance carrier or employer to apply the credit against capped PPD benefits for any temporary disability benefits paid—whether partial or total—beyond 130 weeks from the date of injury.

The Board also notes that one of the other changes to WCL §15(3)(w) includes a “safety valve” that will extend the period of temporary disability beyond 130 weeks where the Board decides that the claimant has not reached maximum medical improvement on that date. The Board will issue “further guidance regarding the application of the safety valve in the near future.”

Remember that these changes to WCL §15(3)(w) are applicable to cases with a date of injury on or after 4/10/17. As a result, any litigation concerning these changes is probably two-and-a-half years away at best.

Subject Number 046-937 discusses the procedures that claimants and their attorneys should follow in requesting a 45-day hearing under the revised WCL §25(2)(a). The Board has modified the RFA-1 forms to include a section for the claimant to request a hearing under this section. The new law requires the Board to grant a claimant a hearing within 45 days where that claimant has a work injury, is out of work, and is not being paid. The Subject Number further details when a 45-day hearing is and is not appropriate as well as details penalties that may be applicable where a hearing is requested without good cause.

Subject Number 046-938 discusses the Board's procedure for claimants requesting an "Extreme Hardship Redetermination" under WCL §35(3). This is the first time that the Board has commented on any procedure concerning the "Safety Net" provisions of WCL §35 first introduced in the 2007 Workers' Compensation Reforms.

The amendment of WCL §35 to lower the percentage loss of wage earning capacity (LWEC) threshold became effective on 4/10/17 and there is no date of injury limitation on the amendment. Thus, the new "greater than 75%" standard would apply even in cases where the parties stipulated to a LWEC of 80% or lower to avoid applicability of the Extreme Hardship Redetermination provisions of WCL §35 prior to the change in the law.

The Board has created a new form, the C-35, for claimants to use in applying for Extreme Hardship Redetermination. The form primarily requests income and expense information, indicating that financial information will be the primary basis for determining whether a claimant qualifies for extended benefits under this section.

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