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Governor Signs Workers Comp Reform Law

Yesterday Governor Brownback signed into law the Kansas Workers Compensation Reform Act.  This law, which will take effect on May 15, 2011, marks the most-significant overhaul of the Kansas workers comp system since 1993. 

The new law, which has, as they say, a little something for everyone, is the product of negotiations between labor and business interests.  Both the Kansas AFL-CIO and the Kansas Chamber of Commerce supported the bill, and both the Senate and House passed it unanimously.  
So what are the major changes that have everyone so giddy?  As Governor Brownback put it, the new law is intended to provide “higher benefits for people with significant, legitimate claims,” while resulting in “less frivolous claims within this system." 
Higher Benefit Caps.  The new law increases the maximum benefits payable for disabling injuries.  For example, the cap on permanent partial disability was raised from $100,000 to $130,000, the cap on permanent total disability went from $125,000 to $155,000, and the death benefit cap increased from $250,000 to $300,000. 
Bilateral Injuries.  The new law clarifies that “bilateral injuries” (shoulder, arm, or hand combined with other shoulder, arm, or hand; or leg or foot combined with other leg or foot) are treated as a "general bodily injuries," rather than two “scheduled” injuries.  General bodily injuries typically result in higher disability awards than two separate injuries to the affected limbs.  This provision reverses a recent ruling by the Kansas Supreme Court. 
Restrictions on Compensable Injuries.  The new law restricts the scope of compensable injuries by stating that an injury is compensable only if it “arises out of and in the course of employment,” and then providing a new, narrow definition of this phrase, as well as exclusions.   
Exclusions for Employee Misbehavior.  The new law disallows benefits for injuries that result from:  deliberate intention to cause injury; willful failure to properly use protective equipment (whether required by law or voluntarily furnished by the employer); knowing and reckless violation of safety rules; or voluntary participation in fighting or horseplay.
Credit for Pre-existing Conditions.  The new law clarifies that employers get a credit against benefit payments for an injured worker’s pre-existing impairment.  In other words, the employer only pays for the extent of the new injury.
Work Disability Redefined.  If a worker suffers a general bodily disability, she may be entitled to benefits based on her “work disability.”  Work disability is defined as an average of (1) “task loss” and (2) “wage loss.”  The new law redefines both task loss and wage loss.
·         Task loss now means the percentage to which an employee has lost the ability to perform work, based on a five-year period preceding the injury (as opposed to the old fifteen-year period), and excludes preexisting conditions.
·         Wage loss is the difference between the average weekly wage the employee was earning at the time of the injury and the average weekly wage that the employee “is capable of earning” after the injury.  The current version of the statute says “is earning,” not “is capable of earning.”  This change was in response to a recent Kansas Supreme Court decision in which the Court applied the “is earning” language literally and refused to read in a reasonableness requirement.         
Drug Testing.  An injury is not compensable if it was “contributed to” by use of drugs or alcohol.  There is a rebuttable presumption of contribution if the employee has a blood alcohol content of .04 percent or higher, or specified levels of certain drugs.  An employee forfeits workers compensation benefits if he refuses to submit to drug or alcohol testing, provided there is sufficient cause to suspect drug or alcohol use, or the employer has a clear policy authorizing post-injury testing.
Post-Award Medical Benefits.  To obtain medical benefits after a final award has been issued in the case, a worker now must show the injury was the “prevailing factor” (primary cause) of the need for further medical treatment.  The employer has a right to request “permanent termination” of future medical benefits after there has been a two-year lapse in treatment.
Other Changes.  The new Act includes numerous other procedural and technical changes to the Kansas Workers Compensation Act.  One notable change is the time within which an employee must report an injury.   
Business groups and lawmakers applaud the new law because, they say, it will provide more certainty and stability.  Given that the law contains many new definitions and substantive changes, only time will tell if that promise holds true.  Regardless, the Kansas Workers Compensation Reform Act is a great example of bi-partisan cooperation.   
To see a one-minute video with highlights from the ceremony in which Governor Brownback signed and discussed the bill, click on the following link: 



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Don Berner, the Labor Law, OSHA, & Immigration Law Guy
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Boyd Byers, the General Employment Law Guy
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Jason Lacey, the Employee Benefits Guy
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