The Pennsylvania Chamber of Business and Industry showed its support for the General Assembly's passage of a bill on Wednesday that officials say would save employers hundreds of millions of dollars in workers' compensation costs.
The Harrisburg-based business association urged Gov. Tom Wolf to sign House Bill 1840 into law.
The bill provides a fix to a state Supreme Court decision that the chamber said has been financially detrimental to employers.
In 2017, the Pennsylvania Supreme Court struck down the use of so-called impairment rating evaluations, or IREs. The IRE, instituted in 1996, is a process that allowed employers to cap benefits to injured workers.
Employers could shift employees from total disability to partial disability if an independent doctor assessed their disability at less than 50 percent total body impairment. Pennsylvania caps partial disability payments at 500 weeks, while total disability payments have no cap.
In the absence of IREs, employers are seeing rising costs for workers’ compensation coverage.
“It took out a level of predictability,” said Gene Barr, Pennsylvania Chamber of Commerce president and CEO. “We’ve seen claims on the fund skyrocket. We think it’s absolute common sense to do this.”
Industry experts are conservatively estimating the loss of IREs could cost employers $300 million each year in higher insurance costs, the chamber said.
SENATE BILL 676
Also this week, the General Assembly passed Senate Bill 676, related to the Uninsured Employers Guaranty Fund, which covers medical and wage benefits for injured workers whose employers do not have workers’ compensation coverage.
However, a key reform was removed that would have required proof of wages employees claimed to earn in order to qualify for wage benefits, the chamber said.
“We worked years ago to create a fund,” Barr said. “What we asked for is there should be some proof of it. If you claim to have made ‘X’ per week, you should have no problem letting the Pennsylvania Dept. of Labor and Industry know you made that. There should be some way of safeguarding the taxpayer.”
However, the bill includes a number of positive reforms and goes a long way toward addressing the solvency of the fund, ensuring it can remain a safety net for injured workers, added Barr.
He said he believed Wolf would sign both bills