HOUSE FILE 217

BY  HORBACH

A BILL FOR

An Act relating to the award of penalty benefits in workers’ compensation cases.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 86.13, subsection 4, paragraph a, Code 2011, is amended to read as follows:
   a.  If a denial, a delay in payment, or a termination of benefits occurs without reasonable or probable cause or excuse known to the employer or insurance carrier at the time of the denial, delay in payment, or termination of benefits, the workers’ compensation commissioner shall award benefits in addition to those benefits payable under this chapter, or chapter 85, 85A, or 85B, up to fifty percent of the amount of benefits to which the employee is found to be entitled, that were denied, delayed, or terminated without reasonable or probable cause or excuse.
   Sec. 2.  Section 86.13, subsection 4, Code 2011, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  d.  The employee shall cooperate with a reasonable investigation and evaluation by the employer or insurance carrier into whether benefits were owed to the employee, including but not limited to providing all reasonably requested information, recorded statements, and authorizations for release of information, and attendance at reasonably requested evaluations by health service providers chosen by the employer. Notwithstanding paragraphs“b” and “c”, the failure of an employee to cooperate with the employer’s reasonable investigation and evaluation shall be an absolute bar to the award of penalty benefits to that employee pursuant to this subsection.
EXPLANATION
   This bill relates to the imposition of penalty benefits in workers’ compensation cases. Code section 86.13(4)(a) is amended to specify that penalty benefits shall only be awarded based on the amount of benefits to which the employee is found to be entitled. Code section 86.13(4) is amended by adding a provision that an employee must cooperate with a reasonable investigation and evaluation by the employer or insurance carrier into whether benefits were owed to the employee. Failure to do so is an absolute bar to the award of penalty benefits to that employee.