House File 681 - Introduced
HOUSE FILE
BY COMMITTEE ON JUDICIARY
(SUCCESSOR TO HSB 9)
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to workers' compensation insurance, benefits, and
2 settlements.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. Section 85.27, subsection 7, Code 2005, is
1 2 amended to read as follows:
1 3 7. If, after the third day of incapacity to work following
1 4 the date of sustaining a compensable injury which does not
1 5 result in permanent partial disability, or if, at any time
1 6 after sustaining a compensable injury which results in
1 7 permanent partial disability, an employee, who is not
1 8 receiving weekly benefits under section 85.33 or section
1 9 85.34, subsection 1, returns to work and is required to leave
1 10 work for one full day or less to receive services pursuant to
1 11 this section, the employee shall be paid an amount equivalent
1 12 to the wages lost at the employee's regular rate of pay for
1 13 the time the employee is required to leave work. For the
1 14 purposes of this subsection, "day of incapacity to work" means
1 15 eight hours of accumulated absence from work due to incapacity
1 16 to work or due to the receipt of services pursuant to this
1 17 section. The employer shall make the payments under this
1 18 subsection as wages to the employee after making such
1 19 deductions from the amount as legally required or customarily
1 20 made by the employer from wages. Payments made under this
1 21 subsection shall be required to be reimbursed pursuant to any
1 22 insurance policy covering workers' compensation. Payments
1 23 under this subsection shall not be construed to be payment of
1 24 weekly benefits.
1 25 Sec. 2. Section 85.35, Code 2005, is amended to read as
1 26 follows:
1 27 85.35 SETTLEMENT IN CONTESTED CASE SETTLEMENTS.
1 28 1. The parties to a contested case or persons who are
1 29 involved in a dispute which could culminate in a contested
1 30 case may enter into a settlement of any claim arising under
1 31 this chapter or chapter 85A, 85B, or 86, providing for final
1 32 disposition of the claim, provided that no final disposition
1 33 affecting rights to future benefits may be had when the only
1 34 dispute is the degree of disability resulting from an injury
1 35 for which an award for payments or agreement for settlement
2 1 under section 86.13 has been made. The settlement shall be in
2 2 writing on forms prescribed by the workers' compensation
2 3 commissioner and submitted to the workers' compensation
2 4 commissioner for approval.
2 5 2. The parties may enter into an agreement for settlement
2 6 that establishes the employer's liability, fixes the nature
2 7 and extent of the employee's current right to accrued
2 8 benefits, and establishes the employee's right to statutory
2 9 benefits that accrue in the future.
2 10 3. The parties may enter into a compromise settlement of
2 11 the employee's claim to benefits as a full and final
2 12 disposition of the claim.
2 13 4. The parties may enter into a settlement that is a
2 14 combination of an agreement for settlement and a compromise
2 15 settlement that establishes the employer's liability for part
2 16 of a claim but makes a full and final disposition of other
2 17 parts of a claim.
2 18 5. A contingent settlement may be made and approved,
2 19 conditioned upon subsequent approval by a court or
2 20 governmental agency, or upon any other subsequent event that
2 21 is expected to occur within one year from the date of the
2 22 settlement. If the subsequent approval or event does not
2 23 occur, the contingent settlement and its approval may be
2 24 vacated by order of the workers' compensation commissioner
2 25 upon a petition for vacation filed by one of the parties or
2 26 upon agreement by all parties. If a contingent settlement is
2 27 vacated, the running of any period of limitation provided for
2 28 in section 85.26 is tolled from the date the settlement was
2 29 initially approved until the date that the settlement is
2 30 vacated, and the claim is restored to the status that the
2 31 claim held when the contingent settlement was initially
2 32 approved. The contingency on a settlement lapses and the
2 33 settlement becomes final and fully enforceable if an action to
2 34 vacate the contingent settlement or to extend the period of
2 35 time allowed for the subsequent approval or event to occur is
3 1 not initiated within one year from the date that the
3 2 contingent settlement was initially approved.
3 3 6. The parties may agree that settlement proceeds, which
3 4 are paid in a lump sum, are intended to compensate the injured
3 5 worker at a given monthly or weekly rate over the life
3 6 expectancy of the injured worker. If such an agreement is
3 7 reached, neither the weekly compensation rate which either has
3 8 been paid, or should have been paid, throughout the case, nor
3 9 the maximum statutory weekly rate applicable to the injury
3 10 shall apply. Instead, the rate set forth in the settlement
3 11 agreement shall be the rate for the case.
3 12 The settlement shall not be approved unless evidence of a
3 13 bona fide dispute exists concerning any of the following:
3 14 1. The claimed injury arose out of or in the course of the
3 15 employment.
3 16 2. The injured employee gave notice under section 85.23.
3 17 3. Whether or not the statutes of limitations as provided
3 18 in section 85.26 have run. When the issue involved is whether
3 19 or not the statute of limitations of section 85.26, subsection
3 20 2, has run, the final disposition shall pertain to the right
3 21 to weekly compensation unless otherwise provided for in
3 22 subsection 7 of this section.
3 23 4. The injury was caused by the employee's willful intent
3 24 to injure the employee's self or to willfully injure another.
3 25 5. Intoxication, which did not arise out of and in the
3 26 course of employment but which was due to the effects of
3 27 alcohol or another narcotic, depressant, stimulant,
3 28 hallucinogenic, or hypnotic drug not prescribed by an
3 29 authorized medical practitioner, was a substantial factor in
3 30 causing the employee's injury.
3 31 6. The injury was caused by the willful act of a third
3 32 party directed against the employee for reasons personal to
3 33 such employee.
3 34 7. This chapter or chapter 85A, 85B, 86 or 87 applies to
3 35 the party making the claim.
4 1 8. A substantial portion of the claimed disability is
4 2 related to physical or mental conditions other than those
4 3 caused by the injury.
4 4 7. A settlement shall be approved by the workers'
4 5 compensation commissioner if the parties show all of the
4 6 following:
4 7 a. Substantial evidence exists to support the terms of the
4 8 settlement.
4 9 b. Waiver of the employee's right to a hearing, decision,
4 10 and statutory benefits is made knowingly by the employee.
4 11 c. The settlement is a reasonable and informed compromise
4 12 of the competing interests of the parties.
4 13 If an employee is represented by legal counsel, it is
4 14 presumed that the required showing for approval of the
4 15 settlement has been made.
4 16 8. Approval of a settlement by the workers' compensation
4 17 commissioner shall be is binding on the parties and shall not
4 18 be construed as an original proceeding. Notwithstanding any
4 19 provisions of this chapter and chapters 85A, 85B, 86, and 87,
4 20 an approved compromise settlement shall constitute a final bar
4 21 to any further rights arising under this chapter and chapters
4 22 85A, 85B, 86, and 87. Such regarding the subject matter of
4 23 the compromise and a payment made pursuant to a compromise
4 24 settlement agreement shall not be construed as the payment of
4 25 weekly compensation.
4 26 Sec. 3. Section 85.71, Code 2005, is amended by adding the
4 27 following new subsection:
4 28 NEW SUBSECTION. 5. The employer has a place of business
4 29 in Iowa, and the employee is working under a contract of hire
4 30 which provides that the employee's workers' compensation
4 31 claims be governed by Iowa law.
4 32 Sec. 4. Section 86.24, subsection 4, Code 2005, is amended
4 33 to read as follows:
4 34 4. A transcript of a contested case proceeding shall be
4 35 provided by an appealing party at the party's cost and an
5 1 affidavit shall be filed by the appealing party or the party's
5 2 attorney with the workers' compensation commissioner within
5 3 ten days after the filing of the appeal to the workers'
5 4 compensation commissioner stating that the transcript has been
5 5 ordered and identifying the name and address of the reporter
5 6 or reporting firm from which the transcript has been ordered.
5 7 Sec. 5. Section 87.14A, Code 2005, is amended to read as
5 8 follows:
5 9 87.14A INSURANCE OR BOND REQUIRED.
5 10 An employer subject to this chapter and chapters 85, 85A,
5 11 85B, and 86 shall not engage in business without first
5 12 obtaining insurance covering compensation benefits or
5 13 obtaining relief from insurance as provided in this chapter or
5 14 furnishing a bond pursuant to section 87.16. A person who
5 15 willfully and knowingly violates this section is guilty of a
5 16 class "D" felony.
5 17 Sec. 6. Section 87.19, unnumbered paragraph 1, Code 2005,
5 18 is amended to read as follows:
5 19 Upon the receipt of information by the workers'
5 20 compensation commissioner of any employer failing to comply
5 21 with sections 87.16 and 87.17 section 87.14A, the commissioner
5 22 shall at once notify such employer by certified mail that
5 23 unless such employer comply with the requirements of law,
5 24 legal proceedings will be instituted to enforce such
5 25 compliance.
5 26 Sec. 7. Section 87.20, Code 2005, is amended to read as
5 27 follows:
5 28 87.20 REVOCATION OF RELEASE FROM INSURANCE.
5 29 The insurance commissioner with the concurrence of the
5 30 workers' compensation commissioner may, at any time, upon
5 31 reasonable notice to such employer and upon hearing, revoke
5 32 for cause any order theretofore made relieving any employer
5 33 from carrying insurance as provided by this chapter.
5 34 Sec. 8. Sections 87.16 and 87.17, Code 2005, are repealed.
5 35 EXPLANATION
6 1 This bill relates to workers' compensation insurance,
6 2 payment of workers' compensation benefits, and workers'
6 3 compensation settlements.
6 4 Code section 85.27 is amended to provide that for purposes
6 5 of paying lost wages pursuant to subsection 7, "day of
6 6 incapacity to work" means eight hours of accumulated absence
6 7 from work due to incapacity to work or due to the receipt of
6 8 services pursuant to that section.
6 9 Code section 85.35 is amended to modify settlement
6 10 procedures for workers' compensation claims. The bill
6 11 provides that parties may enter into an agreement for
6 12 settlement that establishes the employer's liability, fixes
6 13 the nature and extent of the employee's rights to accrued
6 14 benefits, and establishes the employee's right to statutory
6 15 benefits that accrue in the future; a compromise settlement of
6 16 an employee's claim to benefits that is a full and final
6 17 disposition of the claim; or a settlement that is a
6 18 combination of an agreement for settlement and a compromise
6 19 settlement that establishes the employer's liability for part
6 20 of a claim but makes a full and final disposition of other
6 21 parts of a claim.
6 22 Code section 85.35 is also amended to provide for a
6 23 contingent settlement, which may be made and approved by the
6 24 workers' compensation commissioner, conditioned upon
6 25 subsequent approval by a court or governmental agency or upon
6 26 any other event that is expected to occur within one year from
6 27 the date of the settlement. The bill provides that if the
6 28 subsequent approval or event does not occur, the contingent
6 29 settlement and its approval can be vacated by order of the
6 30 workers' compensation commissioner upon a petition by one of
6 31 the parties or upon agreement by all parties. If such a
6 32 contingent settlement is vacated, the running of any statute
6 33 of limitations provided for in Code section 85.26 is
6 34 considered to be stopped from the date that the contingent
6 35 settlement was initially approved until the date that the
7 1 settlement is vacated and the claim is then restored to the
7 2 status that it held at the time the settlement was initially
7 3 approved. The contingency on a settlement lapses and the
7 4 settlement becomes final and fully enforceable if an action to
7 5 vacate the settlement or to extend the period of time allowed
7 6 for the subsequent approval or event to occur is not initiated
7 7 within one year from the date that the contingent settlement
7 8 was initially approved.
7 9 Code section 85.35 is also amended to strike the
7 10 requirement that the parties produce evidence of a bona fide
7 11 dispute before a final settlement can be approved by the
7 12 workers' compensation commissioner. The amendment to the Code
7 13 section provides that a settlement cannot be approved unless
7 14 the parties show that substantial evidence exists to support
7 15 the terms of the settlement, waiver of the employee's right to
7 16 a hearing, decision, and statutory benefits is made knowingly
7 17 by the employee, and the settlement is a reasonable and
7 18 informed compromise of the competing interests of the parties.
7 19 The amendment to the Code section also provides that if an
7 20 employee is represented by legal counsel, it is presumed that
7 21 the required showing has been made.
7 22 Code section 85.71 is amended to revise the jurisdiction of
7 23 the workers' compensation commissioner over Iowa employees who
7 24 are injured while working outside the state. The revision
7 25 allows jurisdiction where an employer has a place of business
7 26 in this state and the employee is working under a contract of
7 27 hire which provides that the employee's workers' compensation
7 28 claims be governed by Iowa law.
7 29 Code section 86.24 is amended to remove the requirement
7 30 that in an appeal to the workers' compensation commissioner,
7 31 the appealing party or that party's attorney must file an
7 32 affidavit within 10 days after filing the appeal stating that
7 33 a transcript has been ordered.
7 34 The bill repeals Code section 87.16, which requires an
7 35 employer who has failed to carry workers' compensation
8 1 insurance or to obtain relief from carrying such insurance, to
8 2 furnish a bond approved by the workers' compensation
8 3 commissioner. Code section 87.14A is amended to remove the
8 4 reference to the bonding requirements contained in Code
8 5 section 87.16. The bill also repeals Code section 86.17,
8 6 which requires an employer to post a notice stating the nature
8 7 of the security furnished in lieu of insurance to secure
8 8 workers' compensation payments.
8 9 Code section 87.19 is amended to provide that an employer
8 10 that fails to comply with the provisions of Code chapters 85,
8 11 85A, 85B, 86, and 87, as set forth in Code section 87.14A, may
8 12 be subject to enforcement proceedings.
8 13 The bill amends Code section 87.20 to provide that the
8 14 insurance commissioner may revoke, for cause, an order
8 15 relieving an employer from carrying insurance as required by
8 16 Code chapter 87 without the concurrence of the workers'
8 17 compensation commissioner.
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