FINAL BILL REPORT

HB 1396

                                  C 161 L 88

BYRepresentatives Wang, Patrick and Cole; by request of Department of Labor and Industries

Revising industrial insurance disability benefits.

House Committe on Commerce & Labor

Senate Committee on Economic Development & Labor

SYNOPSIS AS ENACTED

BACKGROUND:

MONTHLY BENEFITS.  The amount of basic workers' compensation disability and death benefits paid monthly to injured workers or beneficiaries is based on a percentage of the worker's wage at injury.  The percentage varies depending on the marital status of the worker and the number of children.  However, the maximum amount is limited to 75 percent of the state average monthly wage.  Tips, overtime pay and gratuities are not included in the calculation of a worker's wage.  The Board of Industrial Insurance Appeals has determined that the Department of Labor and Industries must base wages on the worker's current wage at the time of injury, not on the average of the worker's recent wage history.

OCCUPATIONAL DISEASE.  Compensation for an occupational disease claim is based on the payment schedule that was in effect at the time the worker contracted the disease or was last exposed to injurious substances.  For many occupational diseases, the disease does not manifest itself for many years after the date that the worker was last exposed to the injurious substance.

In a 1987 Washington state supreme court decision, industrial insurance coverage for occupational diseases was extended to certain disabilities caused by repetitive trauma and aggravation of pre-existing nonoccupational diseases.  It is not clear whether the court's decision extends coverage to mental stress cases.

PERMANENT DISABILITY.  If a worker is awarded a permanent partial disability award based on a back injury that does not have marked objective clinical findings, the award is automatically reduced by 25 percent.

JOB MODIFICATION.  Job modification benefits are allowed for modification of the worker's old job, but not a new job.  New jobs or new job modifications are not listed in the return-to- work priorities for vocational rehabilitation plans.

REOPENING CLAIMS.  If aggravation, diminution or termination of a worker's disability occurs within seven years of the previous claim closure order, the worker's claim may be reopened to adjust benefits.

SELF-INSURERS' CLAIM CLOSURE.  In 1986, self-insurers were given authority to close industrial insurance claims that involve medical benefits or temporary disability benefits.  The program is scheduled for termination on June 30, 1988.

SUMMARY:

MONTHLY BENEFITS.  Beginning July 1, 1988, the maximum monthly disability or death benefit payable to an injured worker or beneficiary is 100 percent of the state average monthly wage.  The definition of "wages" for determining the monthly wages on which to compute an injured worker's industrial insurance benefits is amended to include tips, to the extent that tips are reported to the employer for federal income tax purposes.  For employment that is exclusively seasonal or essentially part-time or intermittent, a 12 month averaging formula is established to determine the monthly wage.

OCCUPATIONAL DISEASE.  The rate of compensation for occupational disease claims filed on or after July 1, 1988, is established as of the date that the disease requires medical treatment or becomes disabling, whichever occurs first, without regard to the date on which the disease was contracted or the date the claim was filed. The Department of Labor and Industries is directed to adopt a rule that mental conditions and disabilities caused by stress are not included within the definition of occupational disease.

PERMANENT DISABILITY.  The reduction in the permanent partial disability award for back injuries that do not have marked objective clinical findings is deleted beginning July 1, 1988.

JOB MODIFICATION.  The department is authorized to provide job modification benefits to workers entering employment with a new employer.  Job modification with a new employer or a new job is made a return- to-work priority under a vocational rehabilitation plan.

REOPENING CLAIMS.  The time period for reopening an industrial insurance claim is changed to one seven year period that runs from the date the first closing order becomes final.  However, the director may provide proper and necessary medical care at any time.  After July 1, 1988, an order denying an application to reopen must be issued within 90 days of the filing of the application or it is deemed granted.  The department may extend the 90 day time period an additional 60 days for good cause.

SELF-INSURERS' CLAIM CLOSURE.  The program allowing self-insurers to close certain industrial insurance claims is extended until June 30, 1990.

VOTES ON FINAL PASSAGE:

      House 58  36

      Senate    42     7(Senate amended)

      House 97   0(House concurred)

EFFECTIVE:July 1, 1988 (Sections 1-3 and 6)

            June 30, 1989 (Section 4)