BILL REQ. #:  H-2720.1 

Prefiled 04/25/11. Read first time 04/26/11.   Referred to Committee on Labor & Workforce Development.

     AN ACT Relating to workers' compensation reform through authorization of voluntary settlements and creation of a return-to-work subsidy program; reenacting and amending RCW 51.32.090; adding new sections to chapter 51.04 RCW; and creating new sections.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   A new section is added to chapter 51.04 RCW to read as follows:
     (1)(a) Notwithstanding RCW 51.04.060 or any other provision of this title, beginning January 1, 2012, the parties to an allowed claim for benefits may enter into a voluntary settlement agreement as provided in this section with respect to one or more allowed claims for benefits under this title. No voluntary settlement agreement may be entered into by a worker who has received a permanent total disability award and the award is final and binding. All voluntary settlement agreements must be approved by the board of industrial insurance appeals. The voluntary settlement agreement may:
     (i) Bind the parties with regard to any or all aspects of an allowed claim including, but not limited to, monetary payment, vocational services, and claim closure, but excluding medical benefits;
     (ii) Include a structured settlement in which payments are made pursuant to a payment schedule;
     (iii) Not subject any employer who is not a signatory to the agreement to any responsibility or burden under any claim; and
     (iv) Not be submitted to the board under subsection (2) or (3) of this section within one hundred eighty days of the date the claim is allowed.
     (b) For purposes of this section:
     (i) "Parties" means:
     (A) For a self-insured claim, the worker and the employer; and
     (B) For a state fund claim, the worker, the employer, and the department. However, a "party" for a state fund claim does not include an employer whose experience rating would not be affected by a voluntary settlement agreement or an employer whose account with the department is closed or inactive.
     (ii) "Allowed claim" means a claim for which the determination that the claim is allowed is final and binding.
     (c) For state fund claims, the department shall negotiate the settlement with the worker. Any voluntary settlement agreement entered into under this section must be signed by the parties or their representatives and must clearly state that the parties understand and agree to the terms of the voluntary settlement agreement. Unless one of the parties revokes consent to the agreement, as provided in subsection (5) of this section, the voluntary settlement agreement becomes final and binding thirty days after approval of the agreement by the board of industrial insurance appeals.
     (d) A voluntary settlement agreement that has become final and binding as provided in this section is binding on the department and on all parties to the agreement as to its terms and the injuries and occupational diseases to which the voluntary settlement applies. A voluntary settlement agreement that has become final and binding is not subject to appeal.
     (2)(a) If a worker is not represented by an attorney at the time of signing a voluntary settlement agreement, the parties must forward a copy of the signed settlement agreement to the board with a request for a hearing before an industrial appeals judge. The hearing must be open, under oath, and on the record. Unless one of the parties requests a later date, the industrial appeals judge must convene the hearing within fourteen days after receipt of the request for the limited purpose of receiving the voluntary settlement agreement of the parties, explaining to the worker the benefits generally available under this title, and explaining that a voluntary settlement agreement may alter the benefits payable on a claim. In no event may an industrial appeals judge render legal advice to any party.
     (b) Before recommending approval of the voluntary settlement agreement, the industrial appeals judge must find that the worker has an adequate understanding of the settlement proposal and its consequences to the worker.
     (c)(i) The industrial appeals judge may recommend approval of a settlement agreement only if the judge finds that the settlement is in the best interest of the worker. When determining whether the settlement is in the best interest of the worker, the industrial appeals judge shall consider the following factors, taken as a whole, with no individual factor being determinative:
     (A) The nature and extent of the injuries and disabilities of the worker;
     (B) The age and life expectancy of the injured worker;
     (C) Whether the injured worker has any health, disability, or related insurance;
     (D) Any other benefits the injured worker is receiving or is entitled to receive and the effect a settlement agreement might have on those benefits;
     (E) The marital status of the injured worker; and
     (F) The number of dependents of the injured worker.
     (ii) At the conclusion of the hearing, the industrial appeals judge must make a decision whether to recommend that the board approve or reject the voluntary settlement agreement. The industrial appeals judge may continue the hearing for up to seven days.
     (d) If the industrial appeals judge recommends the voluntary settlement agreement be approved, the recommendation must be submitted to the board for final approval.
     (3) If a worker is represented by an attorney at the time of signing a voluntary settlement agreement, the parties may submit the agreement directly to the board without the hearing described in this section.
     (4) Upon receiving the voluntary settlement agreement, the board shall approve the agreement within thirty working days of receipt unless it finds that the parties have not entered into the agreement knowingly and willingly. If the board approves the agreement, it shall provide notice to the department of the binding terms of the agreement and provide for placement of the agreement in the applicable claim files.
     (5) A party may revoke consent to the voluntary settlement agreement by providing written notice to the other parties and the board within thirty days after the date the agreement is approved by the board.
     (6) To the extent the worker is found to be entitled to benefits while a voluntary settlement agreement is being negotiated, or during the revocation period of an agreement, the benefits must continue until the agreement becomes final.
     (7) Existing law as set forth in RCW 51.52.120 and the principles and factors therein apply to attorney fees, including the limits on fees, for an attorney representing a worker who enters a voluntary settlement agreement.
     (8) The board of industrial insurance appeals shall adopt rules to implement this section.

NEW SECTION.  Sec. 2   A new section is added to chapter 51.04 RCW to read as follows:
     The department must maintain copies of all voluntary settlement agreements entered into between the parties under section 1 of this act and develop processes under RCW 51.28.070 to furnish copies of such agreements to any party contemplating any subsequent voluntary settlement agreement with the worker on any claim. The department shall also furnish claims histories that include all prior permanent disability awards received by the worker on any claims by body part and category or percentage rating, as applicable. Copies of such agreements and claims histories shall be furnished within ten working days of a written request. An employer may not consider a prior settlement agreement or claims history when making a decision about hiring or the terms or conditions of employment.

NEW SECTION.  Sec. 3   A new section is added to chapter 51.04 RCW to read as follows:
     If a worker has received a prior award of, or entered into a voluntary settlement for, total or partial permanent disability benefits, it shall be conclusively presumed that the medical condition causing the prior permanent disability exists and is disabling at the time of any subsequent industrial injury or occupational disease. Except in the case of total permanent disability, the accumulation of all permanent disability awards issued with respect to any one part of the body in favor of the worker may not exceed one hundred percent over the worker's lifetime. When entering into a voluntary settlement agreement under this chapter, the department or self-insured employer may exclude amounts paid to settle claims for prior portions of a worker's permanent total or partial disability.

NEW SECTION.  Sec. 4   A new section is added to chapter 51.04 RCW to read as follows:
     The joint legislative audit and review committee shall contract for an independent study of voluntary settlement agreements approved by the board of industrial insurance appeals under section 1 of this act. The study must be performed by a researcher that has experience in workers' compensation systems. The study must evaluate settlement agreements of state fund and self-insured claims, provide information on the impact of settlement agreements to the state fund and to self-insured employers, and evaluate the outcomes of workers who have settled their claims. The joint legislative audit and review committee shall analyze the study and make recommendations to the appropriate committees of the legislature by November 1, 2015, regarding voluntary settlement agreements. In implementing this section, the joint legislative audit and review committee shall seek input from the department of labor and industries, the board of industrial insurance appeals, and the workers' compensation advisory committee.

Sec. 5   RCW 51.32.090 and 2007 c 284 s 3 and 2007 c 190 s 1 are each reenacted and amended to read as follows:
     (1) When the total disability is only temporary, the schedule of payments contained in RCW 51.32.060 (1) and (2) shall apply, so long as the total disability continues.
     (2) Any compensation payable under this section for children not in the custody of the injured worker as of the date of injury shall be payable only to such person as actually is providing the support for such child or children pursuant to the order of a court of record providing for support of such child or children.
     (3)(a) As soon as recovery is so complete that the present earning power of the worker, at any kind of work, is restored to that existing at the time of the occurrence of the injury, the payments shall cease. If and so long as the present earning power is only partially restored, the payments shall:
     (i) For claims for injuries that occurred before May 7, 1993, continue in the proportion which the new earning power shall bear to the old; or
     (ii) For claims for injuries occurring on or after May 7, 1993, equal eighty percent of the actual difference between the worker's present wages and earning power at the time of injury, but: (A) The total of these payments and the worker's present wages may not exceed one hundred fifty percent of the average monthly wage in the state as computed under RCW 51.08.018; (B) the payments may not exceed one hundred percent of the entitlement as computed under subsection (1) of this section; and (C) the payments may not be less than the worker would have received if (a)(i) of this subsection had been applicable to the worker's claim.
     (b) No compensation shall be payable under this subsection (3) unless the loss of earning power shall exceed five percent.
     (c) The prior closure of the claim or the receipt of permanent partial disability benefits shall not affect the rate at which loss of earning power benefits are calculated upon reopening the claim.
     (4)(a) ((Whenever)) The legislature finds that long-term disability and the cost of injuries is significantly reduced when injured workers remain at work following their injury. To encourage employers at the time of injury to provide light duty or transitional work for their workers, wage subsidies and other incentives are made available to employers insured with the department.
     (b) The employer of injury ((requests that)) may provide light duty or transitional work to a worker who is entitled to temporary total disability under this chapter ((be certified by a physician or licensed advanced registered nurse practitioner as able to perform available work other than his or her usual work,)). The employer or the department shall obtain from the physician or licensed advanced registered nurse practitioner a statement confirming the light duty or transitional work is consistent with the worker's medical restrictions related to the injury. This statement should be obtained before the start of the light duty or transitional work unless the worker has already returned to work with the employer of injury in which case the statement may be obtained following the start date of the job. The employer shall furnish to the physician or licensed advanced registered nurse practitioner, with a copy to the worker, a statement describing the work ((available)) with the employer of injury in terms that will enable the physician or licensed advanced registered nurse practitioner to relate the physical activities of the job to the worker's disability. The physician or licensed advanced registered nurse practitioner shall ((then determine)) confirm whether the worker is physically able to perform the work described. The worker's temporary total disability payments shall ((continue until the worker is released by his or her physician or licensed advanced registered nurse practitioner for the work, and begins the work with the employer of injury. If)) stop effective the date the light duty or transitional job starts. Temporary total disability payments shall resume if the work ((thereafter)) comes to an end before the worker's recovery is sufficient in the judgment of his or her physician or licensed advanced registered nurse practitioner to permit him or her to return to his or her usual job, or to perform other available work offered by the employer of injury((, the worker's temporary total disability payments shall be resumed)). Should the available work described, once undertaken by the worker, impede his or her recovery to the extent that in the judgment of his or her physician or licensed advanced registered nurse practitioner he or she should not continue to work, the worker's temporary total disability payments shall be resumed when the worker ceases such work at the direction of the physician or licensed advanced registered nurse practitioner.
     (((b))) (c) To further encourage employers to maintain the employment of their injured workers, an employer insured with the department and that offers work to a worker pursuant to this subsection (4) shall be eligible for reimbursement of the injured worker's wages for light duty or transitional work equal to fifty percent of the basic, gross wages paid for that work, for a maximum of sixty-six work days within a consecutive twenty-four month period. In no event may the wage subsidies paid to an employer on a claim exceed ten thousand dollars. Wage subsidies shall be calculated using the worker's basic hourly wages or basic salary, and no subsidy shall be paid for any other form of compensation or payment to the worker such as tips, commissions, bonuses, board, housing, fuel, health care, dental care, vision care, per diem, reimbursements for work-related expenses, or any other payments. An employer may not, under any circumstances, receive a wage subsidy for a day in which the worker did not actually perform any work, regardless of whether or not the employer paid the worker wages for that day.
     (d) If an employer offers a worker work pursuant to this subsection (4) and the worker must be provided with training or instruction to be qualified to perform the offered work, the employer shall be eligible for a reimbursement from the department for any tuition, books, fees, and materials required for that training or instruction, up to a maximum of one thousand dollars. Reimbursing an employer for the costs of such training or instruction does not constitute a determination by the department that the worker is eligible for vocational services authorized by RCW 51.32.095 and 51.32.099.
     (e) If an employer offers a worker work pursuant to this subsection (4), and the employer provides the worker with clothing that is necessary to allow the worker to perform the offered work, the employer shall be eligible for reimbursement for such clothing from the department, up to a maximum of four hundred dollars: PROVIDED, HOWEVER, That an employer shall not receive reimbursement for any clothing it provided to the worker that it normally provides to its workers. The clothing purchased for the worker shall become the worker's property once the work comes to an end.
     (f) If an employer offers a worker work pursuant to this subsection (4) and the worker must be provided with tools or equipment to perform the offered work, the employer shall be eligible for a reimbursement from the department for such tools and equipment and related costs as determined by department rule, up to a maximum of two thousand five hundred dollars. An employer shall not be reimbursed for any tools or equipment purchased prior to offering the work to the worker pursuant to this subsection (4). An employer shall not be reimbursed for any tools or equipment that it normally provides to its workers. The tools and equipment shall be the property of the employer.
     (g) An employer may offer work to a worker pursuant to this subsection (4) more than once, but in no event may the employer receive wage subsidies for more than sixty-six days of work in a consecutive twenty-four month period under one claim. An employer may continue to offer work pursuant to this subsection (4) after the worker has performed sixty-six days of work, but the employer shall not be eligible to receive wage subsidies for such work.
     (h) An employer shall not receive any wage subsidies or reimbursement of any expenses pursuant to this subsection (4) unless the employer has completed and submitted the reimbursement request on forms developed by the department, along with all related information required by department rules. No wage subsidy or reimbursement shall be paid to an employer who fails to submit a form for such payment within one year of the date the work was performed. In no event shall an employer receive wage subsidy payments or reimbursements of any expenses pursuant to this subsection (4) unless the worker's physician or licensed advanced registered nurse practitioner has restricted him or her from performing his or her usual work and the worker's physician or licensed advanced registered nurse practitioner has released him or her to perform the work offered.
     (i) Payments made under (b) through (g) of this subsection are subject to penalties under RCW 51.32.240(5) in cases where the funds were obtained through willful misrepresentation.
     (j) Once the worker returns to work under the terms of this subsection (4), he or she shall not be assigned by the employer to work other than the available work described without the ((worker's written consent, or without prior review and)) approval ((by)) of the worker's physician or licensed advanced registered nurse practitioner. An employer who directs a claimant to perform work other than that approved by the attending physician and without the approval of the worker's physician or licensed advanced registered nurse practitioner shall not receive any wage subsidy or other reimbursements for such work.
     (((c))) (k) If the worker returns to work under this subsection (4), any employee health and welfare benefits that the worker was receiving at the time of injury shall continue or be resumed at the level provided at the time of injury. Such benefits shall not be continued or resumed if to do so is inconsistent with the terms of the benefit program, or with the terms of the collective bargaining agreement currently in force.
     (((d))) (l) In the event of any dispute as to the validity of the work offered or as to the worker's ability to perform the available work offered by the employer, the department shall make the final determination pursuant to an order that contains the notice required by RCW 51.52.060 and that is subject to appeal subject to RCW 51.52.050.
     (5) An employer's experience rating shall not be affected by the employer's request for or receipt of wage subsidies.
     (6) The department shall create a Washington stay-at-work account which shall be funded by assessments of employers insured through the state fund for the costs of the payments authorized by subsection (4) of this section and for the cost of creating a reserve for anticipated liabilities. Employers may collect up to one-half the fund assessment from workers.
     (7) No worker shall receive compensation for or during the day on which injury was received or the three days following the same, unless his or her disability shall continue for a period of fourteen consecutive calendar days from date of injury: PROVIDED, That attempts to return to work in the first fourteen days following the injury shall not serve to break the continuity of the period of disability if the disability continues fourteen days after the injury occurs.
     (((6))) (8) Should a worker suffer a temporary total disability and should his or her employer at the time of the injury continue to pay him or her the wages which he or she was earning at the time of such injury, such injured worker shall not receive any payment provided in subsection (1) of this section during the period his or her employer shall so pay such wages: PROVIDED, That holiday pay, vacation pay, sick leave, or other similar benefits shall not be deemed to be payments by the employer for the purposes of this subsection.
     (((7))) (9) In no event shall the monthly payments provided in this section:
     (a) Exceed the applicable percentage of the average monthly wage in the state as computed under the provisions of RCW 51.08.018 as follows:

NEW SECTION.  Sec. 6   The department of labor and industries shall contract for an independent study of the return-to-work provisions under RCW 51.32.090. The study must be performed by a researcher that has experience in workers' compensation systems. When selecting the independent researcher, the department shall consult with the workers' compensation advisory committee. The study must evaluate the quality and effectiveness of the return-to-work program and whether the program is being utilized by employers, and evaluate the outcomes of workers participating in the program. The study must be submitted to the appropriate committees of the legislature by December 2016.

NEW SECTION.  Sec. 7   The department of labor and industries may adopt rules to implement this act.

NEW SECTION.  Sec. 8   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.