Gov. Tom Wolf signed two bills into law last week that would bring further changes to workers compensation costs for employers in Pennsylvania.
House Bill 1840 provides a fix to a state Supreme Court decision that business groups such as the Pennsylvania Chamber of Business and Industry have called 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.
Wolf’s approval of H.B. 1840 now restores those IREs.
With H.B. 1840, the bill sent to the governor contained a 35 percent impairment rating, specifically cites to the American Medical Association’s sixth edition of the impairment evaluation guide, and increased burial expenses from $3,000 to $7,000.
However, one lawyer who represents injured workers says IREs are unnecessary.
H.B. 1840 changes the amount of time an employee can receive workers compensation benefits, said Matt Wilson, partner of Martin Law LLC in Philadelphia.
“The 35 percent is a reduction from 50 percent,” Wilson said. Furthermore, the use of the sixth edition of the AMA is a much stricter standard, he said.
However, Barbara Hollenbach, an attorney with Norris McLaughlin of Allentown who represents employers in workers’ compensation cases, said the benefit of the IRE method is that it is a simpler, less expensive, less time-consuming and more certain method of changing someone’s status.
Having this legislation put back in place creates more stability for the employer, she said.
“I think from the employers’ and insurer’s perspective, without the IRE’s, it was hard to know to what extent when you could cap out benefits,” Hollenbach said. “Having the IRE provision back in the legislation helps them, because when it went away, they thought, ‘how do you assess these cases?’ It helps better define the limits as to the extent of the employers’ liability.”
As an example, if an injury arises tomorrow, an employer knows if the employee is going to be out of work for two years, they can request the IRE and start the 500-week process, she added.
Also last week, Wolf signed Senate Bill 676, a bill related to the Uninsured Employers Guaranty Fund, which covers medical and wage benefits for injured workers whose employers do not have workers’ compensation coverage.
With 676, a key reform was removed that would have required proof of wages employees claimed to earn in order to qualify for wage benefits.