SB 1 Amends various provisions of workers' compensation law
Sponsor: Loudon Co-Sponsor(s)
LR Number: 0220S.19T Fiscal Note: 0220-19
Committee: Small Business, Insurance & Industrial Relations
Last Action: 3/30/2005 - Signed by Governor Journal Page: S538-539
Title: CCS HCS SS SCS SBs 1 & 130 Calendar Position:
Effective Date: Varied
House Handler: Hunter

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Current Bill Summary


CCS/HCS/SS/SCS/SBs 1 & 130 - This act revises the workers' compensation law.

ACCIDENT AND INJURY - The act modifies the definition of "accident" to include only events that are "an unexpected traumatic event or unusual strain identifiable by time and place of occurrence producing at the time objective symptoms of an injury, caused by a specific event during a single work shift". The act modifies the definition of "injury" by limiting the definition to only allow compensation if the accident was the prevailing factor in causing the condition. The act limits benefits for pre-existing conditions in cases where a work-related injury causes increased permanent disability and reduces compensation by the amount of permanent partial disability that was pre-existing. The act exempts from coverage injuries from unknown causes and personal health conditions that manifest themselves at work, when an accident is not the prevailing factor in the need for medical treatment. The act prohibits accidents which are sustained while traveling to the employer's principal place of business from the employee's home or to the employee's home from the employer's principal place of business from being compensable.

ABROGATION OF CASE LAW - It is the intent of the Legislature to reject and abrogate earlier case law interpretations on the meaning of or definition of "accident", "occupational disease", "arising out of", and "in the course of the employment". It is also the intent of the legislature to reject and abrogate earlier case law interpretations on the meaning of or definition of "owner".

EMPLOYER LIABILITY - Any person who contracts to have work done as part of the usual course of business on their premises shall be liable to the contractor, it's subcontractors and employees for death or injury which occurs on the premises. If the erection of improvements, demolition, alteration or repair of the premises is being provided by an independent contractor, the independent contractor shall be deemed the employer of the subcontractors and employees where the principle contractor is on the premises and doing work. The immediate contractor or subcontractor shall have primary liability as an employer of the employees of his subcontractor. A right to contribution is available for any secondarily liable parties.

COMPENSABILITY - Occupational disease is only compensable if the occupational exposure was the prevailing factor in causing the condition. Injury due to repetitive motion is recognized as an occupational disease and is only compensable if the occupational exposure is a prevailing factor in causing the medical condition or disability. Disease of the lungs or respiratory tract, hypotension, hypertension, or disease of the heart or cardiovascular system, including carcinoma, may be recognized as occupational diseases for the purposes of workers' compensation law and are defined to be disability due to exposure to smoke, gases, carcinogens, inadequate oxygen of paid firefighters of a paid fire department or paid police officers of a paid police department certified under Chapter 590, RSMo, if a direct causal relationship is established.

REDUCTION OF BENEFITS FOR CERTAIN ACTS - The act eliminates the posting requirements for reduction of compensation and death benefits where an injury is caused by the failure the employee to use employer provided safety devises. An employee who suffers an injury as a result of the failure to obey employer safety rules will have benefits reduced by 25 to 50 percent. The act increases the penalty when violation of a drug or alcohol rule is involved, by mandating that workers' compensation and death benefits reduced by fifty percent. Intoxication at or above the legal blood level shall give rise to a rebuttable presumption that the voluntary use of alcohol was the proximate cause of injury. A preponderance of the evidence standard will apply to rebut such presumption.

NOTICE POSTING BY EMPLOYERS - Every employer must post notice in a prominent and conspicuous place, which notifies employees of the requirement that such employees must inform their employers of an accident within thirty days from such accident and that failure to do so may jeopardize their ability to receive medical coverage, compensation or any other benefit for the injury under workers' compensation law.

CRIMINAL PENALTIES FOR VIOLATIONS OF WORKERS' COMPENSATION LAW - Any insurance company or self-insurer who intentionally refuses to comply with known and legally indisputable compensation obligations with an intent to defraud will be guilty of a Class D felony, and receive the greater of a fine up to ten thousand dollars or double the value of the fraud. The punishment for a subsequent offense is a Class C felony.

Any person who knowingly makes a false or fraudulent statement to an investigator of the division of workers' compensation in the course of investigating fraud or noncompliance will be guilty of a class a misdemeanor and receive a fine of up to ten thousand dollars. The punishment for a subsequent offense is increased to a Class C felony.

Any person, company, or other entity that prepares or provides an invalid certificate of insurance as proof of workers' compensation insurance will be guilty of a Class D felony and receive a fine of the greater of a fine up to ten thousand dollars or double the value of the fraud.

Any employer who knowingly fails to insure his liability under workers' compensation law will be guilty of a Class A misdemeanor and will receive the greater of a fine in an amount up to three times the amount of annual premiums the employer would have paid or fifty thousand dollars.

Any health care provided who commits fraudulent billing practices will be guilty of a Class A misdemeanor and receive a fine of up to twenty thousand dollars. The punishment for a subsequent offense is increased to a Class D felony.

ANNUAL REPORT FROM THE ATTORNEY GENERAL - By January 1 of each year, the Attorney General shall forward to the Division of Workers' Compensation, an annual report of the costs of prosecuting fraud and noncompliance under workers' compensation law. The report will include the number of cases filed with the Attorney General by county, by the fraud and noncompliance unit, the number of cases prosecuted by county by the Attorney General and county prosecutor, fines and penalties levied and received, and all incidental costs.

VOCATIONAL TESTING AND ASSESSMENT - The act provides that an employee must submit to appropriate vocational testing and a vocational rehabilitation assessment required by an employer or insurer.

SUBROGATION LIENS - The act grants an employer a subrogation lien when a third person is liable for the death of an employee.

DISQUALIFICATION FOR RECEIPT OF UNEMPLOYMENT COMPENSATION OR POST INJURY MISCONDUCT - The act disqualifies an employee from receiving temporary total disability during any period of time in which the claimant applies and receives unemployment compensation. Any employee who is terminated from post injury employment based upon post injury misconduct shall be ineligible to receive either temporary total disability or temporary partial disability benefits.

PROOF OF PERMANENT DISABILITY - Permanent partial or total disability shall be demonstrated and certified by a physician. In determining compensability and disability, where inconsistent or conflicting medical opinions exist, objective medical findings shall prevail over subjective medical findings. Objective medical findings are those findings demonstrable on physical examination or by appropriate tests or diagnostic procedures.

COMPENSATION FOR HEARING LOSS - Loss of hearing of twenty-six decibels or less shall not constitute any compensable hearing disability and loss of hearing average ninety-two decibels shall constitute total or one hundred percent compensable hearing loss.

COSTS - If the division or the commission determines that any proceedings have been brought, prosecuted, or defended without reasonable grounds, the division may assess the whole cost of the proceedings upon the party who brought, prosecuted, or defended them.

WAGES AND BONUSES - A monetary bonus, paid by an employer to an employee, of up to three percent of the employee's yearly compensation from such employer shall not have the effect of increasing the compensation amount used in calculating the employee's compensation or wages for purposes of any workers' compensation claim governed under workers' compensation law.

ACCIDENT REPORTING - The act requires every employer or his insurer in this state to file with the division a full and complete report of every injury or death to any employee within thirty days after knowledge of the injury or death.

VOLUNTARY SETTLEMENT AGREEMENTS - The act allows parties to enter into voluntary agreements to settle claims and states that approval shall be granted as long as the settlement is not the result of undue influence or fraud, and the employee fully understands his or her rights and benefits and voluntarily agrees to accept the terms of the agreement. In any claim where an offer of settlement is made in writing, and the employee is not represented by counsel, the employee is entitled to one hundred percent of the amount offered. Legal counsel representing the employee will receive reasonable fees for services rendered.

NOTICE OF REPETITIVE TRAUMA CASE - The act requires written notice to an employer be made no later than thirty days after diagnosis of the condition before proceedings are maintained for a repetitive trauma or occupational disease case.

ADMINISTRATIVE LAW JUDGES - After August 28, 2005, the Governor may appoint additional administrative law judges for a maximum of forty authorized administrative law judges. Performance audits shall be conducted every two years by the six member administrative law judge review committee with a recommendation of confidence or no confidence for each administrative law judge. Administrative law judges will stand for retention votes by the committee every twelve years. An administrative law judge will not receive a retention vote if the administrative law judge has received two or more votes of no confidence for performance audits and may be removed from the appointment immediately.

COMPENSATION FOR CHIEF COUNSEL - Each chief legal counsel located at the division office in Jefferson City shall be compensated at two thousand dollars above eighty percent of the rate at which an associate circuit judge is compensated.

SECOND INJURY FUND - Beginning October 31, 2005, the Director of the Division of Workers' Compensation is required to estimate the amount of benefits payable for each year and calculate the total amount of annual surcharge to be imposed upon all workers' compensation policyholders and self-insured for the following calendar year. The amount of the annual surcharge shall be set at a percentage not to exceed three percent.

STANDARD OF REVIEW - The act imposes a strict construction review with regard to the provisions of the workers compensation chapter and an impartial standard of review for the facts and evidence of a case. Beginning January 1, 2006, only administrative law judges, the commission, and the appellate courts of this state shall have the power to review claims filed under workers' compensation law.

OPT-OUT PROVISION - Allows an employee to opt out of the provisions of workers' compensation law for religious reasons.

BURDEN OF PROOF - The burden of proof for establishing an affirmative defense is on the employer. The burden of proving an entitlement to compensation under workers' compensation law is on the employee or dependent.

CLAIMS AGAINST INSOLVENT SELF-INSURED PARTIES - The act requires the Division of Workers' Compensation to notify each employee of a self-insured member filing bankruptcy, liquidation, or dissolution of his or her obligation to file a notice of claim with the court of jurisdiction and of the need of the employee to provide the guarantee fund and the division with the records set out in this section. The act then requires the claimant to file a claim with the appropriate bankruptcy court prior to the time the division attaches jurisdiction.

TREND FACTORS - The Director of Insurance will allow pure premium rate data to be distributed, upon filing with the director with a final distribution, in a format which allows for comparison of such data with trend factors developed by the advisory organization for each of the job classifications.

JASON ZAMKUS