|BILL AS INTRODUCED||2007-2008|
Introduced by Representatives McDonald of Berlin, Baker of West Rutland, Barnard of Richmond, Branagan of Georgia, Brennan of Colchester, Canfield of Fair Haven, Clark of St. Johnsbury, Clark of Vergennes, Consejo of Sheldon, Devereux of Mount Holly, Donaghy of Poultney, Errecart of Shelburne, Flory of Pittsford, Godin of Milton, Helm of Castleton, Hube of Londonderry, Johnson of Canaan, Koch of Barre Town, Komline of Dorset, Krawczyk of Bennington, Larocque of Barnet, Lawrence of Lyndon, Livingston of Manchester, Marcotte of Coventry, McAllister of Highgate, McFaun of Barre Town, McNeil of Rutland Town, Mook of Bennington, Morley of Barton, Morrissey of Bennington, O’Donnell of Vernon, Oxholm of Vergennes, Peaslee of Guildhall, Perry of Richford, Scheuermann of Stowe, Turner of Milton, Valliere of Barre City, Winters of Williamstown and Wright of Burlington
Subject: Labor; workers’ compensation; vocational rehabilitation; COLA; waiting period
Statement of purpose: This bill proposes reforms to the workers’ compensation laws to ensure the viability of Vermont’s workers’ compensation system in order to make it strong, stable, and competitive to encourage business growth. These changes employ a three-pronged approach of workplace safety and health; benefit realignment; and system accountability that includes:
(1) Setting the maximum weekly compensation rate at 100 percent of the average weekly wage.
(2) Refining the definition of a “compensable injury” to be based on objective medical definitions and “occupational disease.”
(3) Setting the minimum compensation rate at 15 percent of the average weekly wage.
(4) Providing immunity to coemployees.
(5) Defining gainful employment and return to work as the goal of vocational rehabilitation.
(6) Requiring medical case management intervention for serious workplace injuries.
(7) Offsetting wage replacement benefits for injured workers who are not permanently disabled once they become eligible for certain governmental benefits.
(8) Requiring mandatory after-accident drug testing in certain cases.
(9) Basing indemnity benefits on a 52-week wage statement.
(10) Limiting cost-of-living increases in cases of short-term temporary or partial disability.
(11) Extending the “21-day” rule to 60 days.
(12) Changing the statute of limitations from three to two years.
(13) Excluding “first aid only” claims of less that $750.00 from reporting requirements.
(14) Improving the effectiveness and enforcement mechanisms for fraud by creating a fraud investigation unit.
(15) Requiring a study and legislation on vocational rehabilitation best practices, premium discounts for safety programs, rate reduction for return‑to‑work, fairness regarding preexisting conditions, and a permanent partial disability safety net.
AN ACT RELATING TO DECREASING THE COST OF WORKERS’ COMPENSATION INSURANCE
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. FINDINGS
The general assembly finds that:
(1) The high cost of workers’ compensation insurance affects Vermont’s economy, ability to develop businesses, employers, and employees.
(2) The cost of workers’ compensation insurance can be lowered considerably without disrupting medical and indemnity reimbursements to injured workers through a realignment of benefits that promote return to work programs aimed at gainful employment in the following ways:
(A) Increasing and improving workplace safety.
(B) Conforming benefits to correspond with national norms.
(C) Improving accountability.
(D) Improving enforcement of workers’ compensation fraud.
(E) Promoting return-to-work programs by modifying rehabilitation laws to encourage employee participation.
Sec. 2. 8 V.S.A. § 4750(b) is amended to read:
(b) The commissioner may require an insurer to file annually its anti-fraud plan with the department and an annual summary of the insurer’s anti-fraud activities and results. Upon request of the commissioner of labor, a workers’ compensation insurer shall file its anti-fraud plan with the department of labor with information about any fraud investigations, referrals, or prosecutions conducted involving Vermont workers’ compensation claims.
Sec. 3. 13 V.S.A. § 2031 is amended to read:
§ 2031. INSURANCE FRAUD
(a) Definitions. As used in this section:
* * *
(2) “Insurance policy” has the same meaning as in 8 V.S.A. § 4722(3) and includes a workers’ compensation policy issued pursuant to chapter 9 of Title 21.
(3) “Insurer” has the same meaning as in 8 V.S.A. § 4901(2) and includes a workers’ compensation insurer pursuant to chapter 9 of Title 21.
means a natural person, company, corporation, unincorporated association,
partnership, professional corporation, agency of government, or any other
* * *
section shall not apply to workers’ compensation fraud. Cases involving workers’
compensation fraud shall be prosecuted under section 2024 of this title.
* * *
Sec. 4. 21 V.S.A. § 601(18), (19), and (23) are amended to read:
shall mean means a sum of money equal to 150
100 percent of the average compensation, rounded to the next higher
(19) “Minimum weekly compensation”
shall mean a sum of money equal to
50 15 percent of the average
compensation, rounded to the next higher dollar. However, solely for the
purposes of determining permanent total or partial disability compensation
where the employee’s average weekly wage computed under section 650 of this
title is lower than the minimum weekly compensation, the employee’s weekly
compensation shall be the full amount of the employee’s average weekly wages. For
the purpose of determining temporary total or temporary partial disability
compensation where the employee’s average weekly wage computed under section
650 of this title is lower than the minimum weekly compensation, the employee’s
weekly compensation shall be 90 80 percent of the employee’s
average weekly wage prior to any cost of living adjustment calculated under
subsection 650(d) of this title.
disease” means a disease that
results from causes and conditions
characteristic of and peculiar to a particular trade, occupation, process or
employment, and to which an employee is not ordinarily subjected or exposed
outside or away from the employment and arises out of and in the course of the
employment. arises out and in the course of employment only if the
disease is all the following:
(A) Directly causally connected to the employment conditions.
(B) A natural incident of the work as a result of exposure occasioned by the nature of the employment.
(C) Proximately caused by employment, and not caused by substantial exposure outside employment.
(D) Incidental to the character of the business and not independent of the employer-employee relationship.
(E) The result of exposure connected with employment conditions and was a natural consequence of that exposure.
(F) Not an “ordinary disease of life” which is a disease to which the general public is exposed outside any employment and may be compensable if at least one of the following is established by clear and convincing evidence:
(i) The disease is infectious and contagious and was contracted in the course of employment in a hospital, sanitarium, laboratory, nursing home, or other health care facility and was caused by the direct delivery of health care or in the course of employment as a health care worker.
(ii) The disease is characteristic of the employment and was caused by conditions peculiar to the employment.
Sec. 5. 21 V.S.A. § 618(a) is amended to read:
receives a personal injury by accident arising out of and in the
course of employment by an employer subject to this chapter suffers a
compensable injury as defined in subdivision (2) of this subsection, the
employer or the insurance carrier shall pay compensation in the amounts
and to the person hereinafter specified. The compensation of a person who
is under guardianship shall be paid to the person’s guardian.
(2) “Compensable injury” means a personal injury by accident arising out of and in the course of employment. The injury, its work-related cause, and any resulting manifestations or disability shall be established to a reasonable degree of medical certainty, based on objective relevant medical findings that the compensable injury is the major contributing cause of any resulting injury or disability. For the purposes of this chapter, “major contributing cause” means that the cause is more than 50 percent responsible for the injury or disability as compared to all other causes combined for which treatment or benefits are sought. Major contributing cause shall be demonstrated only by medical evidence. For purposes of this section, “objective relevant medical findings” are conclusions that correlate to the subjective complaints of the injured employee and are confirmed by physical examination or diagnostic testing.
(3) A mental or nervous injury occurring as the result of a compensable physical injury shall be proven by clear and convincing medical evidence by a licensed psychiatrist. The evidence shall meet criteria established in the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders published by the American Psychiatric Association. The following are not compensable injuries under this chapter:
(A) A mental or nervous injury resulting only from stress, fright, or excitement.
(B) A mental or nervous injury suffered without an accompanying physical injury requiring medical treatment.
(C) A physical injury resulting from a mental or nervous condition unaccompanied by physical trauma requiring medical treatment.
(D) A mental or nervous injury resulting from being out of work or losing employment opportunities that resulted from a preexisting mental, psychological, or emotional condition or due to pain or other subjective complaints that cannot be substantiated by objective, relevant medical findings.
the injury occurred while engaged off the premises of the employer in a
recreational activity that is available to the employee as part of the employee’s
compensation package or as an inducement to attract employees, it shall not be
considered to have occurred in the course of employment unless the commissioner
finds at least one of the following:
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Sec. 6. 21 V.S.A. § 624(h) is amended to read:
(h) The injured employee or the employee’s personal representative shall be prohibited from commencing a civil action to enforce liability against a
co-worker or against the workers’ compensation insurance carrier for conducting workplace inspections, or an employer-employee safety committee except in the case of gross negligence or wilful misconduct. The employee or the employee’s personal representative shall have the burden of proving gross negligence or wilful misconduct.
Sec. 7. 21 V.S.A. § 632 is amended to read:
§ 632. COMPENSATION TO DEPENDENTS; DEATH BENEFITS
death results from the injury, the employer shall pay to the persons entitled
to compensation or, if there is none, then to the personal representative of
the deceased employee, burial and funeral expenses in the amount of $5,500.00
and expenses for out-of-state transportation of the decedent to the place of
burial not to exceed $1,000.00. The employer shall also pay to or for the
benefit of the following persons, for the periods prescribed in section 635 of
this title, a weekly compensation equal to the following percentages of the
deceased employee’s average weekly wages. The weekly compensation payment
allowed shall not exceed the maximum weekly compensation or be lower than the
minimum weekly compensation:
* * *
Sec. 8. 21 V.S.A. § 640(e) is added to read:
(e) In the case of a work‑related, first aid only injury, the employer shall file the first report of injury with the department of labor. The employer may then file the first report of injury with the workers’ compensation insurance carrier or pay the medical bill within 30 days. If the employer contests a claim, a first report of injury shall be forwarded to the department of labor and the insurer within five days of notice. If additional treatment or medical visits are required or if the employee loses three or more days of work, the claim shall be promptly reported to the workers’ compensation insurer, which shall adjust the claim. “Work‑related, first aid only treatment” means any one-time treatment that generates a bill for less than $750.00.
Sec. 9. 21 V.S.A. § 641(a) is amended to read:
as a result of an injury covered by this chapter, an employee is unable to
perform work for which the employee has previous training or experience, the
shall may be entitled to vocational rehabilitation
services, including which may include retraining and job
placement, as may be reasonably necessary to restore the employee to suitable employment
employability. The employer may voluntarily provide vocational
rehabilitation services to the injured employee. In the event these services
are not voluntarily provided, the employee may present evidence establishing
the employee’s inability to perform suitable work and the need for vocational
rehabilitation services. Upon receipt of this evidence, the employer shall
either provide an entitlement assessment or present evidence supporting the
denial of vocational rehabilitation services. Vocational rehabilitation
providers shall be paid pursuant to a fee schedule determined by the
commissioner by rule. Vocational rehabilitation services shall be provided
An employer providing vocational rehabilitation services shall
designate a vocational rehabilitation provider from a list provided by the
commissioner to initially provide services. Thereafter, the employee may select
request another vocational rehabilitation provider by written request
to the commissioner that includes reasons for dissatisfaction with the
designated provider and the name and address of the proposed new provider
selected from a list provided by the commissioner and the commissioner
may designate the requested provider.
* * *
(3) The commissioner shall adopt rules to assure that a worker who requests services or who has received more than 90 days of continuous temporary total disability benefits is timely and cost-effectively screened for benefits under this section. The rules shall:
* * *
(F) Assure that vocational rehabilitation benefits shall not:
(i) Extend for more than 52 weeks unless approved by the commissioner.
(ii) Continue for any individual while outside the United States. (iii) Continue when an injured employee has been rehabilitated to return to appropriate work based on the realities of the job market at the time the services have been provided.
* * *
Sec. 10. 21 V.S.A. § 642 is amended to read:
§ 642. TEMPORARY TOTAL DISABILITY BENEFITS
the injury causes total disability for work, during such disability, but not
including the first three days, the day of the accident to be counted as the
first day, unless the employee received full wages for that day, the employer
shall pay the injured employee a weekly compensation equal to two-thirds of the
employee’s average weekly wages, but not more than the maximum nor less than
the minimum weekly compensation. In addition, the injured employee, during the
disability period shall receive $10.00 a week for each dependent child who is
unmarried and under the age of 21 years, provided that no other injured worker
is receiving the same benefits on behalf of the dependent child or children. However,
in no event shall an employee’s total weekly wage replacement benefits,
including any payments for a dependent child, exceed
percent of the employee’s average weekly wage prior to applying any applicable
cost of living adjustment. The amount allowed for dependent children shall be
increased or decreased weekly to reflect the number of dependent children
extant during the week of payment. If the total disability continues after the
third day for a period of seven consecutive calendar days or more, compensation
shall be paid for the whole period of the total disability. If the
disability is defined as a serious injury, pursuant to rules of the department,
or continues for a period of more than 45 consecutive days, the employer shall
utilize medical case management review and intervention, and the injured
employee shall cooperate with the medical case management plan.
Sec. 11. 21 V.S.A. § 645(a) is amended to read:
case of an injury enumerated in section 644 of this title, the employer shall
pay to the injured employee 66 and two-thirds percent of the employee’s average
weekly wages, computed as provided in section 650 of this title and subject to
the maximum and minimum weekly compensation rates, for the duration of the
employee’s permanent total disability, but in no event shall the employee
receive benefits for less than
three hundred and thirty 330 weeks.
Benefits under this section shall continue beyond three hundred and thirty
330 weeks if the injury results in the loss of actual earnings or
earning capacity after the injured employee is as far restored as the permanent
character of the injuries will permit and results in the employee having no
reasonable prospect of finding regular employment. When an employee reaches
the age of 65 or otherwise becomes eligible for government-sponsored retirement
benefits, benefits under this chapter may be offset by retirement benefits as
determined by rule of the department.
Sec. 12. 21 V.S.A. § 648(a) is amended to read:
the injury results in a partial impairment
which that is
permanent and which does not result in permanent total disability,
compensation shall be paid during the period of total disability, as provided
in sections 642 and 643 of this title, and at the termination of total
disability, the employer shall pay to the injured employee 66 2/3 66
and two-thirds percent of the average weekly wage, computed as provided in
section 650 of this title, subject to the maximum and minimum weekly
compensation rates, for a period determined by multiplying the employee’s
percentage of impairment of the whole person by 330 weeks. The percentage of
impairment to the whole person is the percentage of impairment to the
particular body part, system, or function converted to the percentage of
impairment to the whole person as provided in subsection (b) of this section.
Sec. 13. 21 V.S.A. § 649 is amended to read:
§ 649. INJURIES NOT COVERED; BURDEN OF PROOF; DRUG
Compensation shall not be allowed for an injury caused by an employee’s wilful
injure himself or cause self-injury or to injure another
or by or during his intoxication the employee’s impairment due to
alcohol or drug use or by an employee’s failure to use a safety appliance
provided for his the employee’s use.
(b) An employee who claims to have suffered a work injury and refuses to be tested for drug or alcohol use shall not be entitled to compensation under this chapter. This section shall not apply if the employer had actual knowledge of and permitted or condoned the employee’s use of alcohol or drugs.
burden of proof shall be upon the employer if
he the employer
claims the benefit of the provisions of this section.
Sec. 14. 21 V.S.A. § 650(a), (d), and (e) are amended to read:
weekly wages shall be computed
in such manner as is best calculated to give
based on the average weekly earnings of the worker during the 12 52
weeks preceding an injury; but where, by reason of the shortness of the
time during which the worker has been in short duration of the employment,
or the casual nature of the employment, or the terms of the employment, it is
impracticable to compute the rate of remuneration, average weekly wages of the
injured worker may be based on the average weekly earnings during the 12
52 weeks previous to the injury earned by a person in the same grade
employed at the same or similar work by the employer of the injured worker ,
or if . If there is no comparable employee, by the
average weekly wages shall be based on the wages of a person in the same
grade employed in the same class of employment and in the same district during
the 52 weeks previous to the injury. If during the period of 12 52
weeks an injured employee has been absent from employment on account of
sickness or suspension of work by the employer, then only the time during which
the employee was able to work shall be used to determine the employee’s average
weekly wage. If the injured employee is employed in the concurrent service of
more than one insured employer or self-insurer the total earnings from the
several insured employers and self-insurers shall be combined in determining
the employee’s average weekly wages, but insurance liability shall be
exclusively upon the employer in whose employ the injury occurred. The average
weekly wage of a volunteer firefighter, volunteer rescue or ambulance worker, volunteer
reserve police officer, or volunteer as set forth in subdivision 1101(b)(4) of
Title 3, who is injured in the discharge of duties as a firefighter, rescue or
ambulance worker, police officer, or state agency volunteer, shall be the
employee’s average weekly wage in the employee’s regular employment or vocation
but the provisions of section 642 of this title relative to maximum weekly
compensation and weekly net income rates, shall apply. For the purpose of
calculating permanent total or permanent partial disability compensation, the
provisions relating to the maximum and minimum weekly compensation rate shall
apply. In any event, if a worker at the time of the injury is regularly
employed in a higher grade of work than formerly during the 12 52
weeks preceding the injury and with larger regular wages, only the larger wages
shall be taken into consideration in computing the worker’s average weekly
computed pursuant to this section shall be adjusted annually on July 1, so that
such the compensation continues to bear the same percentage
relationship to the average weekly wage in the state as computed under this
chapter as it did at the time of injury; except that compensation for temporary
total, temporary partial, or permanent partial disability shall not be adjusted
under this subdivision in the first three years following designation.
weekly compensation benefits or weekly accrued benefits are not paid within 21
days after becoming due and payable pursuant to an order of the commissioner,
or in cases in which the overdue benefit is not in dispute, ten percent of the
overdue amount shall be added and paid to the employee, in addition to interest
and any other penalties. In the case of an initial claim, benefits are due and
payable upon entering into an agreement pursuant to subsection 662(a) of this
title, upon issuance of an order of the commissioner pursuant to subsection
662(b) of this title, or if the employer has not denied the claim within
60 days after the claim is filed. Benefits are in dispute if the
claimant has been provided actual written notice of the dispute within 21
60 days of the benefit being due and payable and the evidence reasonably
supports the denial. Interest shall accrue and be paid on benefits that are
found to be compensable during the period of nonpayment. The commissioner
shall promptly review requests for payment under this section and, consistent
with the criteria in department rule 10.13, shall allow for the recovery of
reasonable attorney fees associated with an employee’s successful request for
payment under this subsection.
Sec. 15. 21 V.S.A. § 660(a) is amended to read:
notice given under the provisions of this chapter shall not be held invalid or
insufficient by reason of any inaccuracy in stating the time, place, nature, or
cause of the injury, or otherwise, unless it is shown that the employer was in
to about the injury as a result of the inaccuracy. Want
of or delay in giving notice, or in making a claim, shall not be a bar to
proceedings under the provisions of this chapter, if it is shown that the
employer, the employer’s agent, or representative had knowledge of the accident
or that the employer has not been prejudiced by the delay or want of notice. Proceedings
to initiate a claim for a work-related injury pursuant to this chapter may not
be commenced after three two years from the date of injury. This
section shall not be construed to limit subsequent claims for benefits stemming
from a timely filed work-related injury claim.
Sec. 16. 21 V.S.A. § 668 is amended to read:
§ 668. MODIFICATION OF AWARDS
the commissioner’s own motion or upon the application of any party in interest
upon the ground of a change in the conditions, or whenever doubts have arisen
as to the jurisdiction of the commissioner at the time the petition was
presented, the commissioner may at any time within six years of the date of
award review any award by giving at least six days’ notice
the parties personally, or to the attorneys appearing in the cause. On such
review, the commissioner may make an order ending, diminishing, or
increasing the compensation previously awarded, subject to the maximum or
minimum provided in this chapter. If it appears that the petition for hearing
was presented without previous authority or that for other reason the
commissioner did not have jurisdiction in the cause, the commissioner may make
an order striking off the award , and. The order shall
state conclusions of fact and rulings of law and a copy of the order shall
be sent immediately send to the parties a copy of the award. Such
a This review shall not affect any money already paid.
Sec. 17. PROPOSALS FOR LEGISLATION; DEPARTMENT OF LABOR
The department of labor in collaboration with the department of banking, insurance, securities, and health care administration shall develop legislative proposals for improving the effectiveness and enforcement of the current statutes. The proposals shall be presented in writing to the governor and the general assembly on or before November 15, 2008. The proposals shall include:
(1) In collaboration with the attorney general, an assessment of the fraud problem, recommendations for improving enforcement, stimulating interagency cooperation, including sharing of information and prosecution, and creating a fraud unit, including staffing, reporting structure, and funding.
(2) A specific legislative rule proposal, including appropriate administrative rules to effect the following:
(A) Provide workers’ compensation premium discounts for employers whose employees successfully complete certified workplace safety training, and the employer is certified as installing and utilizing appropriate safety equipment and practices.
(B) Providing rate reductions for employers who implement an effective return-to-work program or a drug and alcohol prevention program, or both. The amount of credit will be determined according to rules proposed for adoption.
(3) Legislation to improve the fairness of the distribution of workers’ compensation liability for preexisting conditions. This legislative proposal may include a limitation if an injury is caused by something more than normal activity of everyday life.
(4) Legislation, including projected costs, to create a safety net designed to ensure that workers who are receiving permanent partial disability benefits return to gainful employment by examining best practices by providers and relevant programs in this and other states.
(5) A study of best practices to be applied to the vocational rehabilitation system that will improve its function and effectiveness, with the goal of increasing the percentage of employability; and a specific legislative proposal, including appropriate administrative rules, to implement the results of the study.
The Vermont General Assembly
115 State Street