HOUSE BILL REPORT

SHB 400

BYHouse Committee on Commerce & Labor (originally sponsored by Representatives Wang, R. King, Patrick, Chandler, Cole and Winsley; by request of Joint Select Committee on Industrial Insurance and Department of Labor and Industries)

Changing rates for industrial insurance disability benefits.

House Committe on Commerce & Labor

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (6)

      Signed by Representatives Wang, Chair; Cole, Vice Chair; Fisch, Fisher, R. King and Sayan.

Minority Report:  Do not pass.  (4)

      Signed by Representatives Patrick, Sanders, C. Smith and Walker.

House Staff:Chris Cordes (786-7117)

AS PASSED HOUSE MARCH 11, 1987

BACKGROUND:

The amount of basic workers' compensation disability and death benefits paid monthly to workers or beneficiaries is based on a schedule that varies depending on the marital status of the worker and the number of children.  The amount is limited by statute to 75 percent of the state average monthly wage.  Minimum amounts are also established in the dependent schedule.

The disability benefits received by an injured worker are based on the worker's monthly wages at the time of injury.  The law excludes tips, as well as overtime pay and gratuities, from the calculation of the worker's monthly wages.

Compensation for an occupational disease claim is based on the payment schedule that was in effect at the time the worker contracted the disease.  For many occupational diseases, the disease does not manifest itself for many years after the date that the disease was actually contracted.

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.

SUMMARY:

The schedule is deleted that bases disability and death benefit payments on the number of dependents of the injured worker.  The basic disability or death benefit monthly payment to an injured worker or surviving spouse is established at sixty-six and two-thirds percent of the injured worker's wages at the time of injury.  The maximum monthly benefit payable is increased from 75 percent to 100 percent of the state average monthly wage. The schedule for minimum benefit amounts is deleted.

Technical changes are made to remove references to the compensation payable for children, in conformity with the deletion of the dependent schedule.  The lien authority of the Department of Social and Health Services is amended to conform with the dependent schedule changes for purposes of child support enforcement.  It is clarified that death benefit payments made on behalf of a child of a deceased worker are to be made to the person having legal custody of the child.

The definition of "wages" for the purpose of 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. The inclusion of board, housing, fuel and other similar consideration in the definition of wages is clarified by adding that these must be received from the employer as part of the contract of hire.

The rate of compensation for occupational disease claims filed on or after July 1, 1987, 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 reduction in the permanent partial disability award is deleted for back injuries that do not have marked objective clinical findings.

EFFECT OF SENATE AMENDMENT(S):  The Senate amendments make the following changes:

Industrial insurance benefits:  The maximum disability benefit payable to an injured worker is changed from 100 percent to 85 percent of the state average wage.

Suspension of worker benefits:  A self-insurer is authorized to suspend workers' compensation benefits if the worker fails to cooperate with treatment or rehabilitation after notice to the worker and the Department of Labor and Industries, including notice of the consequences of noncooperation and the opportunity to comply, and the right to protest the suspension.  Improper suspension subjects the self-insurer to a penalty.

Resolution of disputes over claim responsibility:  The Department of Labor and Industries will make initial determinations on whether a claim should be allowed as a new claim or be reopened. Pending the determination, benefits must be paid by either the self-insurer or department, as determined by the department. Reimbursement and recoupment is authorized after a final determination is made on claim responsibility.

Claim reopening:  A workers' compensation claim may be reopened within five years of the date the first closing order became final (ten years for eye injuries).  If a claim has been reopened within the specified time period, it may again be reopened within five years after the first reopening order became final.

Reimbursement of employer's sickness and accident fund:  A self- insured employer is permitted to withhold from workers' compensation benefits the amount of any disability payments made to the employee from the employer's sickness and accident fund when the reimbursement is authorized by a collective bargaining agreement.

Fiscal Note:      Requested February 27, 1987.

House Committee ‑ Testified For:    Richard Davis, Director, Department of Labor and Industries; Joe Dear, Deputy Director, Department of Labor and Industries; John Winney, Injured Workers Awareness Committee (with concerns); Beverly Gentry, United Food and Commercial Workers (with concerns); and Joe Albo, Washington State Trial Lawyers Association.

House Committee - Testified Against:      Gary Smith, Independent Business Association; and Clif Finch, Association of Washington Business; and Melanie Stewart-Gerla, Washington Self-Insurers Association.

House Committee - Testimony For:    Benefit increases for workers are overdue after several years of benefit reductions.  The workers' compensation trust fund is now solvent and can support benefit increases.

House Committee - Testimony Against:      Although benefit increases should be considered, they should be balanced with other measures that would ensure maintaining the solvency of the workers' compensation trust fund.

VOTE ON FINAL PASSAGE:

      Yeas 78; Nays 20

Voting Nay: Representatives Amondson, Ballard, Barnes, Beck, Betrozoff, Ferguson, Fuhrman, Holland, May, McLean, Miller, Nealey, Prince, Sanders, Schmidt, C. Smith, D. Sommers, B. Williams, J. Williams and S. Wilson