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Davis Brown Employment and Labor Law Blog

Top 10 Proposed Changes to Iowa's Workers' Compensation Law - March 14, 2017

The Iowa Legislature is currently reviewing proposed legislation pertaining to Iowa’s Workers’ Compensation laws. 

The proposed legislation has been introduced as House File 518, with companion Senate File 435.  The legislation passed the commerce committees of both the House and Senate.  Amendments are now being filed by legislators in both the House and Senate. 

The proposed legislation offers the most substantial changes we’ve seen in over 75 years.

Below is an overview and summary of the bills and what appear to be the biggest proposed changes.  Please note that these are only proposed changes. 

1. "Predominant Factor" Causation Standard (85.61(7)) 
  • PROPOSED CHANGE:  Would only make personal injuries arising out of and in the course of employment compensable “if such injuries are found to be the predominant factor in causing the disability for which compensation is claimed under this chapter, or chapter 85A or 85B.”
  • FUNCTION:  This changes the current causation standard from a “probable cause” analysis to a “predominant factor” analysis.  Under the Explanation section of the proposed legislation, it is noted, “An injury is the predominant factor in causing a disability if more than 50 percent of the disability is attributable to the injury.”
2. Shoulder is scheduled member (85.34(2)(m) 
  • PROPOSED CHANGE: Includes the shoulder joint as a scheduled member injury to the arm, compensable on a schedule of 250 weeks.
  • FUNCTION: Takes shoulder injuries out of the purview of section 85.34(2)(u), which employs an industrial disability analysis based on 500 weeks.
3. Age 67 determinative of termination of permanent partial and permanent total disability benefits (85.34(2)(U); 85.34(3)) 
  • PROPOSED CHANGE 1: If an employee sustains an injury compensable under 85.34(2)(u) (body-as-a-whole injury), an employee of age 67 or older may not receive in excess of 150 weeks of compensation.
  • FUNCTION: Utilizing age 67 as the retirement age, this section limits the amount of wage replacement an employee receives from the workers’ compensation system in the form of permanent partial disability benefits for a body-as-a-whole injury.
  • PROPOSED CHANGE 2: Language added to 85.34(3)states that for permanent total disability, “[W]eekly compensation is payable during the period of the employee’s disability until the employee is no longer permanently and totally disabled or until the employee reaches the age of sixty-seven, whichever occurs first. If an employee sustains an injury compensable under this subsection after reaching the age of sixty-seven, compensation shall be paid to the employee so long as the employee remains permanently and totally disabled not to exceed an amount equal to one hundred fifty weeks of compensation.”
  • FUNCTION: Utilizing age 67 as the retirement age, this section caps the amount of permanent total disability benefits an employee may receive on the earlier of (1) no longer being permanently and totally disabled; or (2) reaching the age of 67. In addition, an employee age 67 or older is limited to 150 weeks of compensation. Under these changes, employees would no longer be entitled to benefits indefinitely.
4. Industrial disability analysis can take into consideration retirement age  (85.34(2)(u)) 
  • PROPOSED CHANGE: Add the following language to 85.34(2)(u): “A determination of the reduction in the employee’s earning capacity caused by the disability shall take into account the permanent partial disability of the employee and the number of years in the future it was reasonably anticipated that the employee would work at the time of the injury.”
  • FUNCTION: Under current case law, an industrial disability analysis does not take into consideration an employee’s retirement age or years remaining in the work force. This statutory change would allow the agency and courts to take into consideration the years an employee is anticipated to remain in the work force.
5. Functional loss sole consideration if employee returns to work or is offered to return to work without loss of salary/wages/earning (85.34(2)(u)) 
  • PROPOSED CHANGE: Add the following language to 85.34(2)(u): “If an employee who is eligible for compensation under this paragraph returns to work or is offered work for which the employee receives or would receive the same or greater salary, wages, or earnings than the employee received at the time of the injury, the employee shall be compensated based only upon the employee’s functional disability resulting from the injury, and not in relation to the employee’s earning capacity.”
  • FUNCTION: This change would take away an industrial disability under 85.34(2)(u) and limit recovery to the functional loss under circumstances where an employee is offered to return to work for the same or greater salary/wages/earnings than prior to the injury. There is incentive to return the employee to work in order to limit loss to a functional basis; however, there is also risk to the employee that the work offered may not be permanent in nature and may only last through pending litigation.
6. Clarify what constitutes an offer of “suitable work” (85.33) 
  • PROPOSED CHANGE: The most notable change concerns what constitutes “suitable work” with respect to geographic location of the offered work. Among the changes to this code section, the following language would be added to the statute: “Work offered at the employer’s principal place of business or established place of operation where the employee has previously worked is presumed to be geographically suitable for an employee whose duties involve travel away from the employer’s principal place of business or established place of operation more than fifty percent of the time.” Additional language would also require the employer to communicate the offer in writing and set forth the details of lodging, meals, and transportation. There are also provisions outlining how the employee should communicate the refusal and reasons for refusal.
  • FUNCTION: Provides that traveling employees may be offered suitable work at the employer’s principal place of business and sets standards by which the employer and employee communicate regarding the terms of the offered work.
7. Date of Injury (85.23 and 85.24) 
  • PROPOSED CHANGE: The new legislation would add the following language: “For the purposes of this section, ‘date of the occurrence of the injury’ means the date that the employee knew or should have known that the injury was work-related.”
  • FUNCTION: The legislation codifies the definition of “date of the occurrence of the injury,” which will lead to more consistency in decisions and clarifies the standard versus relying on case law that utilizes different standards.
8. Commencement date for permanent partial disability is date of MMI (85.34(2)) 
  • PROPOSED CHANGE: Compensation for permanent partial disability begins when the Claimant reaches maximum medical improvement (MMI) and the extent of the injury can be determined based on the AMA Guides.
  • FUNCTION: Prevents employees from concurrently receiving temporary benefits and permanency benefits. Helps employers avoid interest payments until the time Claimant reaches MMI.
9. AMA Guides must be used when determining functional impairment (85.34(2)(w))
  • PROPOSED CHANGE: Add a subsection (w) to section 85.34(2), which prohibits the use of lay testimony or agency expertise and requires use of the AMA Guides.
  • FUNCTION: Uniformity in determination of functional disability.
10. Jurisdiction for Claims Occurring Outside of Iowa (85.71) 
  • PROPOSED CHANGE: Removes language stating that for an injury occurring outside the state, an employee is entitled to the benefits of Chapter 85 where “the employer has a place of business in this state and the employee is domiciled in this state.”
  • FUNCTION: The existence of an employer’s location of business in the state of Iowa, paired with an employee’s domicile in the state of Iowa, does not entitle an employee to benefits under Chapter 85. If the employee meets any of the five other tests under 85.71, the employee may still be entitled to benefits for an injury occurring outside of Iowa.

Bottom line

The above list is only proposed changes at this time. The House Republicans caucus again today, March 14, at 3:00 p.m. It’s still unclear as to whether they have the votes to pass it yet.