Clarifies that payment of benefits under the Workers' Compensation Law shall be terminated if maximum medical improvement has been reached, the employee has filed a false claim, or when the period of benefits paid exceeds the maximum medical improvement limit. Sets the initial maximum medical improvement limit at 156 weeks and requires the director to annually revise the limit based on actuarial evaluations of all workers' compensation claims so that 90% of all claims during the next year are expected to fall. Allows an employee to seek tort remedies if the employee has reached the maximum medical improvement limit and the payment of all workers' compensation benefits has been terminated. Defines "maximum medical improvement". (HB1776 HD1)
HOUSE OF REPRESENTATIVES
TWENTY-SECOND LEGISLATURE, 2004
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO WORKERS' COMPENSATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 386, Hawaii Revised Statutes, is amended by adding a two new sections to be appropriately designated and to read as follows:
"§386- Abolition of tort liability; exceptions. (a) Except as otherwise provided in subsection (b), the rights and remedies granted to an employee or an employee's dependents on account of a work injury suffered by the employee shall exclude all other liability of the employer to the employee, the employee's legal representative, spouse, dependents, next of kin, or anyone else entitled to recover damages from the employer, at common law or otherwise, on account of the injury.
(b) Tort liability is not abolished as to the following persons, their personal representatives, or their legal guardians in either of the following circumstances:
(1) The injury is the result of sexual harassment or sexual assault and infliction of emotional distress or invasion of privacy related thereto; or
(2) An injured employee has reached maximum medical improvement, as defined in section 386-1, and the payment of all benefits authorized under this chapter has been terminated.
§386- Maximum medical improvement limit. (a) The director shall annually revise the medical-rehabilitative limit by accumulating experience data on a yearly basis for all workers' compensation claims. The director shall perform actuarial evaluations of this data as necessary to annually determine the specific time period of benefits paid below which ninety per cent of all workers' compensation claims arising from a work injury suffered by an employee during the next year are expected to fall. This figure shall be used as the maximum medical improvement limit for all work injuries suffered by an employee during the next year for the purposes of section
(b) The maximum medical improvement limit for the one year period commencing July 1, 2004, shall be one hundred fifty-six weeks; provided that if the director is unable to revise the maximum medical improvement limit within the one-year period, the maximum medical improvement limit shall continue at one hundred fifty-six weeks."
SECTION 2. Section 386-1, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:
""Maximum medical improvement" means no further improvement in the injured employee's work-related condition can be expected from treatment or the passage of time; provided that a need for medical care that will not significantly improve the condition of the employee but may be needed to prevent deterioration of the condition due solely to the passage of time shall not preclude a finding of maximum medical improvement."
SECTION 3. Section 386-31, Hawaii Revised Statutes, is amended by amending subsection (b) as follows:
"(b) Temporary total disability. Where a work injury causes total disability not determined to be permanent in character, the employer, for the duration of the disability, but not including the first three calendar days thereof, shall pay the injured employee a weekly benefit at the rate of sixty-six and two-thirds per cent of the employee's average weekly wages, subject to the limitations on weekly benefit rates prescribed in subsection (a), or if the employee's average weekly wages are less than the minimum weekly benefit rate prescribed in subsection (a), at the rate of one hundred per cent of the employee's average weekly wages.
The employer shall pay temporary total disability benefits promptly as they accrue to the person entitled thereto without waiting for a decision from the director, unless such right is controverted by the employer in the employer's initial report of industrial injury. The first payment of benefits shall become due and shall be paid no later than on the tenth day after the employer has been notified of the occurrence of the total disability, and thereafter the benefits due shall be paid weekly except as otherwise authorized pursuant to section 386-53.
The payment of such benefits shall only be terminated upon order of the director or if the employee is able to resume work[
.], if any of the following conditions are met:
(1) Maximum medical improvement has been reached; or
(2) When the period of benefits paid exceeds the maximum medical improvement limit established pursuant to section 386- .
In the event that temporary total disability benefits are paid for a period equal to the maximum medical improvement limit, the director may order a continuation of benefits for another period equal to the maximum medical improvement limit after a hearing at which adequate evidence may be presented to support a finding that maximum medical improvement has not been achieved or that the injury is deteriorating. When the employer is of the opinion that temporary total disability benefits should be terminated because the injured employee is able to resume work, the employer shall notify the employee and the director in writing of an intent to terminate such benefits at least two weeks prior to the date when the last payment is to be made. The notice shall give the reason for stopping payment and shall inform the employee that the employee may make a written request to the director for a hearing if the employee disagrees with the employer. Upon receipt of the request from the employee, the director shall conduct a hearing as expeditiously as possible and render a prompt decision as specified in section 386-86.
An employer or insurance carrier who fails to comply with this section shall pay not more than $2,500 into the special compensation fund upon the order of the director, in addition to other penalties prescribed in section 386-92.
(1) In any case where the director determines based upon a review of medical records and reports and other relevant documentary evidence that an injured [
employee's medical condition may be stabilized] employee has reached maximum medical improvement and the employee is unable to return to the employee's regular job, the director shall issue a preliminary decision regarding the claimant's entitlement and limitation to benefits and rights under Hawaii's workers' compensation laws. The preliminary decision shall be sent to the affected employee and the employee's designated representative and the employer and the employer's designated representative and shall state that any party disagreeing with the director's preliminary findings of [ medical stabilization] maximum medical improvement and work limitations may request a hearing within twenty days of the date of the decision. The director shall be available to answer any questions during the twenty-day period from the injured employee and affected employer. If neither party requests a hearing challenging the director's finding the determination shall be deemed accepted and binding upon the parties. In any case where a hearing is held on the preliminary findings, any person aggrieved by the director's decision and order may appeal under section 386-87.
A preliminary decision of the director shall inform the injured employee and the employer of the following responsibilities, benefits, and limitations on vocational rehabilitation benefits which are designed to facilitate the injured employee's early return to suitable gainful employment:
(A) That the injured employee may invoke the employee's rights under section 378-2, 378-32, or 386-142, or all of them, in the event of unlawful discrimination or other unlawful employment practice by the employer[
(B) That after termination of temporary total disability benefits an injured employee who resumes work may be entitled to permanent partial disability benefits, which if awarded, shall be paid regardless of the earnings or employment status of the disabled employee at the time.
(2) In any case in which the rehabilitation unit determines that an injured employee is not a feasible candidate for rehabilitation and that the employee is unable to resume the employee's regular job, it shall promptly certify the same to the director. Soon thereafter, the director shall conduct a hearing to determine whether the injured employee remains temporarily totally disabled, or whether the employee is permanently partially disabled, or permanently totally disabled."
SECTION 4. Section 386-5, Hawaii Revised Statutes, is repealed.
§386-5 Exclusiveness of right to compensation; exception. The right and remedies herein granted to an employee or the employee's dependents on account of a work injury suffered by the employee shall exclude all other liability of the employer to the employee, the employee's legal representative, spouse, dependents, next of kin, or anyone else entitled to recover damages from the employer, at common law or otherwise, on account of the injury, except for sexual harassment or sexual assault and infliction of emotional distress or invasion of privacy related thereto, in which case a civil action may also be brought."]
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect upon its approval.