April 1, 2005
Proposed Workers’ Compensation Reform Legislation

By Barbara A. Knapic, Esq.

Legislative changes may be on the horizon for Ohio employers.  Governor Taft has made it his number two priority behind tax reform, to reform the Ohio workers’ compensation system. Reform legislation is being proposed by Senator Cates under S. B. 7 and by Representative Buehrer under H.B. 7.  Hearings have been held in both chambers of the legislature concerning the proposed legislation with employer groups, such as the Ohio Self-Insured Association, the Ohio Manufacturers Association and the Ohio Chamber of Commerce, providing testimony that they are generally in favor of the bills.   Administrator Jim Conrad and Industrial Commission Chairman Bill Thompson also testified in favor of the legislation. Meetings and hearings in the House and the Senate are continuing.

 Key elements of the proposed legislation are as follows:

Aggravation of Pre-existing Conditions would have to be proven by objective evidence such as X-rays or other objective tests and the standard would be “substantial aggravation” as opposed to the current standard of “mere aggravation”.  Compensation and medical benefits for the “aggravated” condition would not be payable once the condition has returned to pre-injury levels.

Psychological conditions arising from rape or sexual assault would be compensable. “Sexual Assault” would be as defined in the Ohio Criminal Statutes.

“Disability” replaced by “Impairment”.  Hearing officers would not be able to use disability factors as opposed to medical impairment when determining percentage of permanent partial impairment awards. This codifies current practice.

Stephenson Factors eliminated.  The Stephenson factors, such as education, work history and other socioeconomic factors would not be considered in determining applications for Permanent Total Disability Compensation.  Age, however,  could remain a consideration, although a claimant could not be made PTD solely on the basis of age.

Life of Claims.  A claim would expire four years from the date of last payment of compensation or medical benefits regardless of whether it is a lost time or medical only claim.

Plaintiff’s Voluntary Dismissal of Court Case.  A Plaintiff would not be able to dismiss his or her Complaint without the Employer’s consent when it is the Employer’s appeal into court.

Termination of Temporary Total Disability Compensation.  A Hearing Officer could terminate temporary total disability compensation on the basis of maximum medical improvement as of the date of the medical report relied upon, as opposed to the date of hearing on the issue.  An overpayment to the date of hearing could be declared and the employer would have the right to recoupment, pursuant to Ohio Revised Code Section 4123.511(J).  

Nonworking Wage Loss Reduced.  The period of time for which a claimant could receive nonworking wage loss compensation would be reduced to 26 weeks, the same period of time allowed for compensation under the unemployment compensation statutes.

Elimination of 40 week waiting period for PPD.  For example, if temporary total disability compensation is terminated on the basis of maximum medical improvement, the 40-week waiting period for a permanent partial disability award would be eliminated, allowing a claimant to receive a PPD award at the same hearing that MMI is determined.

Loss of arm/hand does not equal statutory PTD.  The proposed legislation would reverse an Ohio Supreme Court decision awarding statutory permanent total disability compensation when a claimant loses an arm and the hand of the same extremity.    

State Fund Employer Settlement Approval.  Settlement approval from the employer would not be required if the claim is out of the employer’s experience or if the employer does not respond to two written notices of the settlement.  A claimant’s death during the 30 day “cooling off period” would void any settlement.

Removal of QHP reporting requirements.  This provision would eliminate the BWC’s requirement to report QHP outcomes and savings to the state legislature. Since the BWC would no longer be required to report this information to the legislature, it would follow that the self-insured employer would not be required to continue those reporting procedures to the BWC.  However, that is not addressed in the proposed legislation. 

BWC Special Investigation Department.  The BWC Fraud Unit would be designated as a criminal justice agency allowing it access to the computer databases of state and federal law enforcement agencies.

Employer Fraud.   This section would increase the fines for failing to report specific information to or providing false information to the BWC.  It would also designate some of these offenses as felonies and assign graduated fines assessed against the employer.

The ADR process.  The proposed legislation would provide that the ADR (alternative dispute resolution) process, currently used primarily in state funded claims,  shall not be used to resolve disputes concerning medical services rendered if those services have approved through standard guidelines adopted by the BWC.  The employer however, does not lose the right to appeal the authorization of treatment under this section.

Administrator given authority to levy penalties against Self-Insured Employers.   Under the proposed legislation, the Administrator of the BWC administrator would have the authority to levy fines against, revoke the self-insured status or refuse to renew self-insured status of any self-insuring employer if that employer knowingly pays an assessment incorrectly or knowingly pays an assessment late.  In addition, the Administrator would have authority to fine, revoke or refuse to renew self-insured status for failure to pay compensation and benefits in a timely manner.  An SI employer would be permitted to appeal the Administrator’s decision to the Self-Insured Employer’s Evaluation Board.

Public Records.  The proposed legislation would prohibit the Administrator of the BWC from releasing claimants' addresses or telephone numbers or releasing anything directly or indirectly leading to that information.

Traumatic Brain Injury PTD Claimants.  The proposed legislation would entitle traumatic brain injury claimants to continue receiving PTD compensation regardless of subsequent employment.

Automatic Certification.   This provision would provide authority for the BWC to automatically certify claims with conditions/diagnosis identified by the BWC as “always” being allowed.  The employer would not lose the right to appeal the certification of the claim.  This provision has already been incorporated in the BWC’s budget bill.

The trial lawyers and labor oppose the reform legislation.  While there are some elements in the proposed legislation that are similar to S.B. 45, which was the subject of a referendum in 1997,  only nine of 31 S.B. 45 provisions are included in this proposed legislation and three of those have received extensive rewrites. 

According to the testimony given in favor of the legislation by employer groups and the BWC and Industrial Commission, this proposed legislation provides a balanced approach to making the Ohio workers’ compensation system more equitable.

If you have any questions regarding this pending legislation, please contact any member of the Workers’ Compensation Practice Group at Buckingham, Doolittle & Burroughs, LLP.