workers compensation reform
Property Casualty

Workers’ Compensation Update: Iowa Governor Signs Bill into Law

Kari Cooling
Kari Cooling
Sr. Vice President and Managing Director, Brokerage Services - Iowa

It truly is out with the old and in with the new. As I mentioned in a previous blog, lawmakers in Iowa were looking to make some significant changes to the state’s workers’ compensation law this session…and, well, they did. On March 30, Governor Terry Branstad signed the Workers’ Compensation Reform Bill. The changes will go into effect on July 1, 2017.

What it boils down to is this…the bill truly overhauls the workers’ compensation law. And, I’ve said it before, but I’ll say it again. While this is a change in Iowa, employers in all states should take note. With the Trump administration, we might see other states propose more “extreme” reforms to benefit employers as a whole. This may be just the beginning of a domino effect.

As for Iowa, here’s what we know about what will become the “new” law. Note, these are just the highlights…

  • Intoxication — If the employer shows an employee tests positive for any drugs or alcohol at the time of an accident or shortly thereafter, it’s presumed the employee was intoxicated at the time of the injury and that the intoxication was a substantial factor in causing the injury. The burden of proof shifts to the employee to show that he/she was not intoxicated at the time of the injury or that the intoxication was not a substantial factor in causing the injury. Employers are still subject to Code 730.5 in regards to drug testing.
  • Notice of Injury — The employee is not entitled to benefits if he/she fails to give actual knowledge of the work injury to the employer within 90 days from the “date of the occurrence of the injury.” The date of the injury is defined as the date the employee knew or should have known that the injury was work related.
  • Temporary Benefits — If the employer offers the employee suitable work and the employee refuses to accept the suitable work offered by the employer, the employee shall not be compensated with temporary partial, temporary total, or healing period benefits during the period of the refusal. This offer must be in writing, and the letter must include details of lodging, meals, and transportation. It also must state that if the employee refuses the offer of temporary duty work, he/she shall communicate in writing the reason for the refusal and will not be compensated unless the work refused is not suitable.
  • Permanent Partial Disability — Compensation for permanent partial disability begins when it is medically indicated the employee is at maximum medical improvement and that the extent of loss or percentage of permanent impairment can be determined by use of the AMA Guides to Permanent Impairment.
  • Shoulder Injury Claims The loss of a shoulder is now a scheduled member injury (previously “body as a whole”). This means industrial disability is not factored in. The loss of a shoulder is now based on 400 weeks (previously 500 weeks).
  • Permanent Total Disability — Weekly compensation of permanent total disability benefits is payable until the employee is no longer permanently and totally disabled vs. the former language that compensation is payable during the period of the employee’s disability.
  • Successive Disabilities — An employer is liable for compensating only that portion of an employee’s disability that arises out of and in the course of the employee’s employment with that employer.
  • Additional Payment for Attendant – Rehabilitation and Training – New Career Vocational Training and Education Program — An employee who sustains an injury resulting in permanent partial or permanent total disability who is entitled to benefits, and who cannot return to gainful employment, may actively participate in a vocational rehabilitation program recognized by the vocational rehabilitation services division of the Department of Education. If approved, the claimant will be referred to a community college and the state will be responsible for $15,000 max for the program.
  • Injury Outside of the State — In the event of any injury or death outside an employee’s domiciled state, the employee’s dependents are still entitled to the benefits outlined in this chapter, if at the time of such injury any of the following is applicable: a. The employer has a place of business in this state, and the employee regularly works at or from that place of business.
  • Fees — An attorney cannot recover fees for legal services rendered based on the amount of compensation voluntarily paid or agrees to be paid to an employee for temporary or permanent disability benefits. An attorney can only recover fees based on the amount of compensation the attorney can show would not have been paid to the employee but for the attorney.

And again, those are just the highlights! It will be interesting to see if other states make changes to their workers’ compensation laws in the coming months. Either way, if you need help strategizing for your 2017 workers’ compensation programs as a result of these changes or just have questions, don’t hesitate to reach out to us. We’re here to help!

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