District of Columbia Council Resolution PR24-0783, “Parity in Workers’ Compensation Recovery Emergency Declaration Resolution of 2022”

/in /by District of Columbia Council Resolution PR24-0783, “Parity in Workers’ Compensation Recovery Emergency Declaration Resolution of 2022”

Historically, under the District of Columbia’s Official Code § 32-1503(a-1), an injured worker could not receive any workers’ compensation benefits in the District of Columbia, if the worker had ever received benefits for the same accidental injury or death, in another state.

However, on June 6, 2022, new legislation was introduced to the Council of the District of Columbia, seeking to amend the District of Columbia’s Workers’ Compensation Act of 1979. The purpose of this legislation is to permit an employee access to workers’ compensation benefits in the District of Columbia, even if the injured worker has applied for and received benefits in another state.  The basis for this proposed legislation was that the current legislative scheme, which bans an injured worker from recovering in the District of Columbia if they have received benefits in another state, was problematic for injured workers since workers’ compensation laws in the District of Columbia are more favorable to the injured workers than in neighboring states, i.e., Maryland and Virginia.  The legislation included a comment that the injured worker would not be able to “double dip,” meaning that the court would be required to reduce damages based on the amount of compensation recovered in another state.

The legislation was put forth on an emergency basis, relying on the justification that an injured worker should not be prevented from accessing the full compensation and benefits provided under the District of Columbia law.  The proposed legislation was approved by the Council on June 7, 2022, and was sent to Mayor Bowser for ratification.

On June 17, 2022, opponents of the proposed legislation drafted a letter to Mayor Bowser. In the letter, the opponents argued that the proposed legislation would cause a substantial increase in the number of claims in the District of Columbia, noting that the current jurisdictional rule prevents an injured worker from seeking benefits in the District of Columbia once their benefits end in another state.  Additionally, the opponents argued that an injured worker has the right to choose whether to file in the District of Columbia as opposed to another jurisdiction at the onset of their claim.  Finally, the opponents argued that the proposed legislation would result in multiple issues, including, but not limited to, the statute of limitations issues and the effect of orders issued by other jurisdictions.

Notwithstanding the opposition, Mayor Bowser signed the proposed legislation, thereby adopting PR24-0783. As a result, an injured worker can receive workers’ compensation benefits in the District of Columbia, even if the injured has applied for, or received, benefits in another state for the same accidental injury.  The emergency legislation expires on September 26, 2022.https://lims.dccouncil.us/Legislation/PR24-0783

Written by associate Marleigh Davis.

Child Support & the WCC – HB650: A Solution Everyone Can Agree On

/in /by Child Support & the WCC – HB650: A Solution Everyone Can Agree On

On January 31, 2022, Delegate Benjamin Brooks introduced House Bill 650 – Execution on a Judgment – Child Support Arrearage – Workers’ Compensation (“HB 650”) before the Maryland “for the purposes of specifying a certain percentage of the net recovery by the debtor on a claim for workers’ compensation is subject to execution on a judgment for a child support arrearage.”

F&P principals Albert (“Bert”) B. Randall, Jr., Esq., and John J. Handscomb, Esq., worked closely with Delegate Brooks on this bill from the outset, consulting and advising on both the importance and need for such legislation, and assisted in the crafting and drafting of same.   Additionally, Bert Randall provided written and oral testimony in support of HB 650 before the House Judiciary Committee and House of Delegates and written testimony in support of HB650 to the Maryland Senate.

Pursuant to Delegate Brooks’ testimony before the House Judiciary Committee, the purpose of the HB650 bill is to specify that 25% of the net recovery on a claim for workers’ compensation is subject to execution on a judgment for child support arrearage, as current law does not explicitly state what, if any, indemnity benefits can be attached when a child support order is in place. “HB650 merely offers clarity in an otherwise ambiguous statute in determining which workers’ compensation indemnity benefits can be garnished,” Delegate Brooks’ stated.

Under the Maryland Workers’ Compensation Act, victims of on-the-job injuries are entitled to workers’ compensation benefits to compensate for resulting economic losses, including lost wages (“temporary total disability”) and permanency (loss of future earning capacity owing to impairment caused by an injury that did not heal completely). Compensation benefits are paid by a workers’ compensation insurance company, usually by check, directly to the injured worker.

Child support orders are enforced by garnishing money in the hands of a third party (insurance company) that would otherwise be paid to a deadbeat parent. Under a Memorandum of Understanding between the Workers’ Compensation Commission and child support enforcement, commission data files are mined to identify awards to parents with child support arrearages. Garnishments are then served on the workers’ compensation insurers ordered to pay compensation to these parents.

Subsection 11-504(b)(2) of the Courts and Judicial Proceeding Article prohibits garnishment of “money payable in the event of sickness, accident, injury, or death of any person, including compensation for loss of future earnings. This exemption includes but is not limited to money payable on account of . . ., compromises, insurance, benefits, compensation, and relief.”

Notwithstanding Section b of 11-504, which exempts “compensation” from garnishment, child support authorities routinely attempt to garnish a significant proportion or all of a worker’s compensation benefits, leaving claimants with little or no money to meet the costs of daily living. Circuit courts asked to decide whether Subsection B exempts workers’ compensation benefits from child support garnishment have reached conflicting decisions – meaning child support either received 100% of its ask or nothing.

As currently drafted House Bill 650 amends § 11-504 of the Courts and Judicial Proceedings Article to authorize the Child Support Agency (CSA) to execute a judgment on a claim for personal injury and workers’ compensation benefits. The statute would allow the CSA to collect temporary partial disability, temporary total disability, permanent partial disability, permanent total disability, vocational rehabilitation compensation, and any other indemnity benefits paid to in connection with a Workers’ Compensation Claim, from a noncustodial parent for an arrearage in Child Support.

Passage of House Bill 650 would establish that “twenty-five percent of the net recovery” by a debtor is subject to execution on a judgment for child support arrearage on a claim for personal injury (“accidental injury”) with the Workers’ Compensation Commission. Thus, clarifying an existing ambiguity in Family Law for the Child Support Administration to use this collection source for payment of child support arrearages from noncustodial parents who are awarded indemnity benefits and/or settlements from personal injury through workers’ compensation claims.

The need for this clarification of the existing law is clear. As noted in Bert Randall’s written testimony in support of HB650 before the House Judiciary Committee on February 17, 2022, “As a practitioner that litigates workers’ compensation claims on behalf of Maryland Employers and their insurers, like many of my colleagues, I’ve often been caught in the middle of differing opinion offered by Claimants’ attorney’s and child support enforcement authorities. This results in a legal quagmire with threats of litigation and penalties for non-compliance from both Claimant’s attorneys and enforcement authorities with no easy solution. These disputes create additional litigation, and legal expense and result in judicial inefficiency. This bill solves that issue by clarifying all the types and amounts of benefits that may be withheld for child support.”  Randall continued, “This bill favorably amends the existing statute so that workers’ compensation entitlements are treated with other analogous personal injury recoveries and is consistent with existing state and federal law.”

On March 18, 2022, the House of Delegates unanimously passed HB650 in a 131-0 vote. After a hearing before the Senate held on March 31, 2022, HB650 came out of committee with a favorable report on a 9-1 vote before time ran out in the 2022 Legislative Session for the bill to be returned to the originating chamber for review.   Thus, preventing HB650 from becoming a much-needed new law.

Though HB650 did not make the cut for this most recent Legislative Session, the importance of the bill was signified by support from the Defense Bar, Claimants’ Bar, Chesapeake Employers Insurance Company, and representatives from Child Support Enforcement Agencies. All those in support of the bill plan to resubmit the same for consideration next year and anticipate that it will become law at that time.

Written by associate Kara Parker.

Death Benefits in Delaware – Changes to Surviving Spouse’s Eligibility

/in /by Death Benefits in Delaware – Changes to Surviving Spouse’s Eligibility

In Delaware, if an employee dies from a work-related injury or illness, death benefits can be awarded under 19 Del. C. § 2330 to the surviving spouse, children, and other dependents in limited situations.

The compensation rate of death benefits can be between 66 2/3% and 80% of the employer’s average weekly wage, dependent upon the number of eligible beneficiaries.  The benefits are paid for a minimum period of 400 weeks.

Concerning surviving children, such compensation can continue beyond 400 weeks to children until they reach the age of 18, or alternatively, until they reach the age of 25 if they are enrolled as a full-time student.  There are additional considerations made for disabled children beyond 18.

Previously, the surviving spouse’s eligibility for death benefits would end upon remarriage.  When a spouse remarried, they would receive a two-year lump sum payment, but future benefits would be terminated.

Because of a recent amendment to section 2330, a surviving spouse’s eligibility for ongoing benefits has now been extended.  As a result of the amendment, a surviving spouse’s benefits continue until the death of the surviving spouse, regardless of if they remarry.  However, remarriage will reduce the compensation rate for a surviving spouse.  The compensation rate is reduced to 90% upon remarriage for the first ten years after the spouse remarries.  After ten years, the compensation rate is reduced to 75% of the original compensation rate for the surviving spouse’s life.

Contact Robert Hunt, Jr. for more information on this article.

Is There a Time Limit on When a Medical Provider Can Seek Payment?

/in /by Is There a Time Limit on When a Medical Provider Can Seek Payment?

Within the last few years, the answer is yes. In October 2017, the Maryland legislature established a one-year bill submission period for Maryland medical providers. Previously, there was no submission period outlined by state statute. The Maryland General Assembly amended § 9-660 of the Workers’ Compensation Act to add time restraints for providers seeking payment of medical bills for treatment related to an employee’s work-related injury. Specifically, the code under section (d) states that a provider who provides medical service or treatment to a covered employee shall submit to the employer or the employer’s insurer a bill for the service within 12 months from the later of the date that:

1) the medical service was provided;

2) the employer or insurer accepted the claim for compensation; or

3) the claim for compensation was determined to be compensable by the Workers’ Compensation Commission. Md. Lab. & Empl. Code Ann. § 9-660(d).

Providers have more leniency with timely submission than the payers of the medical bills generally. Maryland regulation COMAR 14.09.08.06 requires insurers to reimburse providers or to deny in full or in part or within 45 days of receipt of the provider’s bill.

Does that mean the insurer is completely off the hook if the provider submits nothing within that 12-month period?   As we know, nothing in the law is that black and white. The statute goes on to state that the employer or insurer may not be required to pay a bill that was submitted after the 12 months outlined above unless the provider files an application for payment within the Commission (also known as the C-51) within three years of the later:

(1) the date of the medical treatment or service;

(2) the date the employee’s claim was accepted by the employer or the insurer; or

(3) the date the employee’s workers’ compensation claim was found to be compensable by the Commission; and

The Commission excuses the untimely submission for good cause. Id. At this point, the Commission decides what constitutes “good cause” on a case-by-case basis. The statute is still considered to be new; we can anticipate in the future that we will have a clearer definition as to what instances will establish good cause as required by the Act.

Written by associate Stephanie Broznowicz.

 

 

 

 

 

Credit for IME No-Show Fees Increase

/in /by Credit for IME No-Show Fees Increase

Prior to October 18, 2021, COMAR 14.09.03.08B(6) placed a cap of $125.00 reimbursement of reasonable expenses and costs incurred when a claimant in a Workers’ Compensation matter missed an independent medical examination appointment. The cap of $125.00 was arbitrary and not an accurate reflection of the fees that result from a claimant failing to attend a scheduled medical examination appointment.

Effective October 18, 2021, COMAR 14.09.03.08B(6) was revised to remove the $125.00 cap on the reimbursement of expenses and costs incurred due to a missed medical examination appointment. The controlling version of COMAR 14.09.03.08B(6) now reads: “If a Claimant fails to appear at, refuses to submit to, or fails to cooperate with the medical examination, without good cause, the Commission may order the claimant to attend a medical examination and order reimbursement of reasonable expenses and costs actually incurred because of the missed exam (emphasis added).”  Md. Code Regs. 14.09.03.08. The amendment now allows the penalized party to seek credit for the entire amount of the no-show fee.

The reimbursement amount ordered will be at the commissioner’s discretion presiding over the matter. If either party believes that the decided reimbursement amount inaccurately reflects the costs incurred, a motion for a rehearing may be submitted to the Commission within fifteen of the days after the decision. Additionally, another avenue to further litigate the issue of the reimbursement amount ordered is to appeal the matter to one of the state’s circuit courts for the matter to be litigated before a judge or jury.

Written by associate Marleigh Davis.

Summary Denial of a Motion to Reopen or Modify Is Not Appealable or Subject to Judicial Review

/in /by Summary Denial of a Motion to Reopen or Modify Is Not Appealable or Subject to Judicial Review

Labor & Employment § 9-736(b) grants the Workers’ Compensation Commission (hereinafter the “Commission”) the authority to modify its findings or orders, where justified, so long as the application for modification is made within five years after the later of the date of accident; date of disablement; or date of last compensation paid. Upon receiving such a request, the Commission may summarily deny the request without conducting a hearing.  Alternatively, it may hold an evidentiary hearing on the issue, after which it can either deny or grant the request.  While any new decision reached after an evidentiary hearing is reviewable on appeal by the Circuit Court, a summary denial is not.

In the case of Linda A. Sanders v. Board of Education for Harford County, et al., the Commission’s authority to summarily deny a modification request was reviewed in the appellate courts of Maryland. Specifically, the Court of Appeals considered whether the Commission’s summary denial of a motion to reopen or modify under Labor & Employment § 9-736(b) was subject to judicial review or appeal. The employer, Board of Education for Harford County, and insurer, Maryland Association of Board of Education (“MABE”), hereinafter “Respondents” were represented by Franklin & Prokopik’s own Angela Garcia Kozlowski, Esq. and David A. Skomba, Esq. As a result of Ms. Kozlowski’s and Mr. Skomba’s tireless efforts in representing the Respondents before the Commission, the Circuit Court for Harford County, the Court of Special Appeals, and finally the Court of Appeals, we received a favorable decision from the Court of Appeals. The court held that a summary denial of a motion to reopen or modify under Labor & Employment §9-736 (b) is not subject to judicial review or appeal.

Linda A. Sanders, (hereinafter referred to as “Claimant”) was employed by the Board of Education for Harford County as a bus driver. On October 7, 2014, the Claimant was involved in a work accident involving a special needs student wherein she sustained injuries to her head, neck, spine, and left arm. The Claimant subsequently filed a claim with the Commission and sought authorization for physical therapy and surgery directed at the left shoulder. Following a hearing on the merits, the Commission denied authorization for surgery but granted authorization for physical therapy. The Claimant did not file a petition for judicial review (“appeal”), nor did she file a request for rehearing. Instead, she underwent surgery through her private health insurer.

Over three years later, the Claimant filed a request for modification of the earlier order, wherein surgery was denied. She sought authorization for the surgery and payment of surgery bills in her request. The Commission summarily denied the request, and the Claimant filed a petition for judicial review in the Circuit Court for Harford County. The Respondents filed a motion to dismiss, asserting that the Commission’s summary denial was not subject to judicial review. The motion to dismiss was granted in favor of the Respondents.

Roughly three months later, the Claimant filed a second request for modification wherein she sought the same relief as in the earlier modification request. The Commission again summarily denied the request, and the Claimant again filed a petition for judicial review in the Circuit Court for Harford County. The Respondents again filed a motion to dismiss, which was denied by the circuit court. The Claimant and Respondents then filed cross-motions for summary judgment. The circuit court ultimately ruled in favor of the Claimant and remanded the case to the Commission for further action on the second request for modification. The Respondents appealed this decision to the Court of Special Appeals.

The Court of Special Appeals eventually ruled in favor of the Respondents and held that the circuit erred in denying the Respondents’ Motion to Dismiss. The court explained that the Commission has broad discretion to deny a request to reopen summarily, and the summary denial is not subject to judicial review the Court of Appeals appealed the case.

After a thorough review and discussion of the applicable authorities, the Court of Appeals held that “where a party requests that the Commission reopen or modify a claim under LE Section 9-736(b) and the Commission summarily denied the request without a hearing and does not consider new evidence or the merits of the request to reopen/modify or make findings with respect to the merits of the request or of the earlier order in a new or amended order denying the request, the Commission’s denial is not subject to judicial review.”

The Court of Appeals explained that pursuant to the plain language of Labor and Employment § 9-736 (b), the Commission is vested with “wide discretion to either modify a finding or order that has previously issued or not to do so under LE 9-736(b), provided that a request to modify is made within the statutory limitations period of five years outlined under LE 9-736(b)(3).”  Following an application of a party for modification of an order under LE 9-736(b), the Commission may either grant the request, hold a hearing at which evidence is considered, and afterward issue a decision granting or denying the requested relief. Conversely, the Commission may also deny the request to reopen or modify the order without reopening the case for receipt of additional evidence or a hearing and without considering the merits of the request or earlier order and making new findings. This later course of action, the Court of Appeals explained, “is generally called a summary denial.”

In reaching this decision, the Court of Appeals explained that although Labor & Employment § 9-737 generally provides for judicial review of a decision by the Commission where a petition for judicial review is filed within thirty days after the date of the mailing of the Commission’s order that, “nevertheless, our case law makes clear that the summary denial of a request to modify under Labor & Employment § 9-736(b) is not subject to judicial review.” The court further explained that consistent with more than a century of developing case law, a refusal to reopen a claim constitutes a decision of the Commission, but concluded that such a decision is merely one “not to interfere with a previous decision settling the merits of the instant claim” and that such a decision “is not one intended to be included under a general statutory allowance of an appeal from any decision.” Since, in the instant case, the Claimant filed a request for modification of the Commission’s initial order, which was summarily denied, without reopening, and without addressing the merits of the underlying claim or veracity of the initial order, the Court of Appeals held that the Claimant was not entitled to judicial review of said denial.

Written by associate Kara Parker.

 

For Whom the Statute of Limitations Tolls?

/in /by For Whom the Statute of Limitations Tolls?

On March 5, 2020, Governor Larry Hogan issued an Executive Order declaring a State of Emergency in response to the COVID-19 pandemic.  The governor issued periodic updates to the Order at various points after that.  Under one of such updates, issued under date of March 12, 2020, the governor empowered the heads of Maryland’s courts and administrative agencies to toll or suspend legal time requirements in recognition of the difficulty faced by the judicial system in adjudicating claims – particularly during periods of lockdown.

Pursuant to that authority, and the emergency powers granted to the chairman of the Commission under COMAR 14.09.17.03A, Commissioner R. Karl Aumann issued Administrative Order 2020-02, whereby the chairman ordered, in relevant part, that “all statutory and regulation deadlines related to the initiation of matters required to be filed with the Maryland Workers’ Compensation Commission, including statute of limitations, shall be tolled or suspended, as applicable, effective nunc pro tunc March 16, 2020, by the number of days that the commission remains closed to the public due to the COVID-19 emergency by order of the chairman of the Commission.”  It  was further ordered that, “such deadlines further shall be extended by a period of 30 days beyond the end of the state of emergency, as evidenced by an order reopening the commission to receive in person at its Baltimore office.”

The commission remained closed to the public for 472 days before reopening effective June 30, 2021, pursuant to a second administrative order entitled “Administrative Order 2021-01 Ending Timeframe Suspension and Rescinding Administrative Order 2020-02” (See above) issued by the chairman under date of March 25, 2021.  Pursuant to that order, the “Timeframe Suspensions” – including statutes of limitations, were lifted and no longer in effect, effective June 30, 2021.  The order allows a 30-day extension for the filing of applicable claims to be considered timely and will relate back to the date before the expiration of the applicable time limit for the same.

In the ordinary course, claim applications for accidental personal injury, death from accidental personal injury, disablement or death from an occupational disease, and claims for readjusting or “worsening” are subject to statutes of limitations under the Labor & Employment Article, Title 9, Sections 709, 710, 711, and 736.  Generally, the statute of limitations begins to run from the date of the work injury or onset of occupational disease, provided that the first report of injury is filed.  Unless a claim for benefits as a result of said injury or occupational disease is filed with the commission by an injured worker or its representative within the timeframe prescribed, then the same would be barred under the applicable statute.  Claims filed outside of the prescribed period are denied and/or contested by carriers and counsel.

The effect of the two aforementioned administrative orders, however, may complicate this rather routine practice.  Carriers and counsel evaluating an Employee Claim Form must now account for the period of “timeframe suspensions” during which the statute of limitations for initiating new claims was tolled.   Practically speaking, what that means is this:  in evaluating a claim for benefits, if the statute of limitations for the same would have “expired” at any time during the period beginning March 15, 2020, and ending June 30, 2021, then the carrier and/or counsel will need to undertake an additional analysis to determine whether or not the claim was/is timely filed pursuant to the terms of Administrative Order 2020-02.

While clarification on the application and operation of the tolling period and timeframe suspensions as it relates to the commission has yet to be provided, the Court of Appeals included the following example of how the statute of limitations tolling period operates as applied under similar orders suspending legal time limits at that level:  “If two (2) days remained for the filing of a new matter on March 15, 2020, then two (2) days would have remained upon the reopening of the offices of the clerks of the court to the public on July 20, 2020.  With the additional fifteen (15) days [extension for timely filing], seventeen (17) days would be left for a timely filing beginning July 20, 2020.”

It follows then that in the case of a claim filed for benefits with two days remaining for the timely filing of that matter as of March 15, 2020, two days would have remained upon the reopening of the commission to the public effective June 30, 2021.  With the additional 30 days provided pursuant to Administrative Order 2021-01, then 32 days would be left for a timely filing, beginning June 30, 2021.

The effects of the COVID-19 tolling period are being felt at the commission with claims that would have otherwise been barred, being accepted for compensation.  Though not an issue yet faced by the commission of this state, of note, administrative orders such as those issued by the chairman have faced legal challenges in other states.  The primary cause of action in such suits challenges the authority of an administrative agency, such as the commission, to alter or amend statutory laws – a task generally left to the state legislature.

Written by associate Kara Parker.

Can Employers Require Vaccination?

/in /by Can Employers Require Vaccination?

The short answer is yes. Because this issue is developing, states are looking to Federal agencies (such as the Equal Employment Opportunity Commission) for guidelines. The EEOC has opined that they can require vaccination so long as a private employer also makes exceptions for individuals under the ADA, Title VII of the Civil Rights Act, and accommodations for religious exemptions.

However, many private employers have taken a less forcible approach. Rather than mandating vaccines, private employers are reaching out to employees with incentives to encourage vaccines so as not to mandate them. This is permissible, so long as the incentives are not coercive.

Employers of emergency personnel are taking a different approach. Employers who employ emergency personnel, such as hospital workers, have now begun to mandate vaccination as a requirement for maintaining employment. In response to this mandate, some employees have initiated lawsuits against their employers challenging the mandate.  So far, none of these cases have been fully litigated. One argument advanced by the employees centers around the position that the vaccine remains in emergency authorization status. Conversely, the argument advanced by the employer is that COVID 19 is a direct threat to all employees in the workplace, and they need to ensure the safety of employees and customers or clients. The EEOC has taken the position that the vaccine’s status with the FDA does not affect an employer’s mandate.

Because rules involving COVID mandates are constantly evolving, it is important to confirm the most recent recommendations from the EEOC and their adoption by an employer and jurisdiction. Currently, the EEOC has determined that private employers are within their rights to mandate that employees be vaccinated. While the litigation employees have filed against employers for these mandates continues to make its way through the judicial system, it appears, for now, the guidelines from the EEOC are being upheld. Although it is expected additional House Bills will be submitted in an attempt to protect employers from lawsuits by employees and employees from having to provide proof of vaccination or from being terminated for not being vaccinated, any additional Bills will likely suffer the same fate.

Written by Theresa L. Teixeira.

Reopening of Delaware Courts in Response to Coronavirus

/in /by Reopening of Delaware Courts in Response to Coronavirus

The past year has been filled with many challenges and uncertainty. Fortunately, the state of Delaware is beginning to reopen and enacting various procedures to do so in a safe manner for all. Below you will find an update on the status of courts in Delaware regarding their reopening procedures.

As of July 13, 2021, Governor John Carney lifted the COVID State of Emergency Order in Delaware, and as of the same day, the Delaware Supreme Court lifted the Judicial Emergency. Following the lifting of the emergency, the Supreme Court encouraged courts to continue using audiovisual devices to the extent such devices remained consistent with constitutional and statutory requirements along with court rules, procedures, and practices. As of August 16, 2021, face coverings are required at all Delaware state court facilities, and unvaccinated employees must undergo weekly COVID testing.

Industrial Accident Board:

The Board is resuming all hearings “in person” at both the Wilmington and Dover locations with safety protocols in place. Individuals should provide their own face covering, maintain three feet of social distancing, undergo temperature checks upon entry, and follow occupancy rates as determined by the board administration.

Superior Court of Delaware:

The Superior Court is resuming jury trials. Various safety measures, including social distancing practices and plexiglass shields throughout the court, will remain in place.

Court of Common Pleas:

The Court of Common Pleas is resuming non-jury trials in person. Many other proceedings are continuing to be held virtually. Social distancing practices continue to remain in effect.

Justice of the Peace Court:

The Justice of the Peace Court is resuming all in-person proceedings while adhering to social distancing guidelines, including lobby capacity. The court is encouraging virtual hearings to continue when necessary to assist in clearing backlogs and easing current caseloads.

Case Law Update:

Addressed below is the case of Fowler v. Perdue Inc., (Delaware Industrial Accident Board, 2020), which highlights the first workers’ compensation decision on coronavirus as an occupational disease.

In Fowler v. Perdue Inc., (Delaware Industrial Accident Board, 2020), Carl Fowler was employed at Perdue Inc. when he contracted COVID-19 and filed a Petition to Determine Compensation Due seeking acknowledgment that COVID-19 is a compensable industrial illness. To succeed on this claim, the claimant bears the burden of proving it is more likely than not he contracted COVID-19 at Perdue and that COVID-19 is an occupational disease.  The test for an occupational disease requires the claimant to have contracted the disease at work and their employment posed an increased risk for exposure.

Fowler worked at Perdue from January 2020 until he contracted COVID-19 in late March 2020. Claimant tested positive for COVID-19 on April 3, 2020, and was admitted to the hospital on April 4, 2020. Claimant alleges because he worked at Perdue and went to the cafeteria while on break, he could have been exposed to the virus at work. However, the claimant had a wide variety of social contacts in the weeks leading to his diagnosis. Claimant went to a doctor’s appointment, medical laboratory, Walmart, and Royal Farms. Along with these contacts, the claimant’s wife went grocery shopping, and the claimant’s daughter attended school, rode the bus, and participated in after-school activities. The family did not self-isolate until after the claimant’s diagnosis, and there was no clear indication of the use of masks or protective devices by the family while in public prior to the claimant’s diagnosis.

The board denied the petition.  The holding is highly fact-sensitive and denial attributed to the claimant and his family’s numerous contacts outside of the workplace in the weeks leading up to his diagnosis. The board notes the widespread nature of the virus and how the claimant could have contracted the virus in many ways and many places.  Because the claimant did not meet his burden of proof regarding exposure, the board does not discuss whether COVID-19 is an occupational disease within the meaning of the Delaware Workers’ Compensation Act.

Changes to SIF/UEF Assessments Set to Expire on June 30, 2021

/in /by Changes to SIF/UEF Assessments Set to Expire on June 30, 2021

During its 2020 Session, the Maryland General Assembly and Department of Legislative Services (“DLS”), put forth and passed Senate Bill No. 8 (“SB8”).  This departmental bill altered the assessment on certain workers’ compensation awards and settlements that fund the Subsequent Injury Fund (SIF) and the Uninsured Employers’ Fund (UEF) by decreasing SIF’s share by 1% and increasing UEF’s share by 1%. The bill took effect July 1, 2020, and was intended to increase special funds revenues for the UEF by approximately $4 million in FY 2021. The bill is set to terminate on June 30, 2021.

By way of background, the UEF and SIF are both specially funded, and their revenues are primarily derived from an assessment on awards against employers or insurers for permanent disability or death and amounts payable by employers or insurers under settlement agreements. Prior to the enactment of SB8, the SIF received a 6.5% assessment on these awards and settlements.  These assessments are the sole mechanism for funding the SIF and pays for both workers’ compensation claims and any SIF administrative costs incurred by SIF for the relevant fiscal year.

The UEF, on the other hand, receives a base 1% assessment on these awards and settlements. The UEF also collects penalties from sanctions on uninsured employers and revenues from the recovery of benefits paid out for uninsured claims.  Additionally, if UEF’s board of directors determines that its fund balance is inadequate to meet its anticipated losses, the board may direct the Workers’ Compensation Commission to impose an additional 1% assessment (2% total) on awards against employers or insurers for permanent disability or death. This additional assessment is currently in effect (meaning that UEF receives 2% for its assessment) and has been since 2009.

Pursuant to a 2019 report on the solvency of the UEF, the UEF advised the Maryland General Assembly that about 80% of its total funding is derived from the current 2% assessment in effect and that, absent same, the fund would become insolvent within a few years.  Further, the 2019 report, revealed that the UEF has been operating at an average annual deficit of – $1.06 million for the period of FY 2015 through FY end 2019.  The SIF, by contrast, reported an FY 2019 ending balance of more than $100 million and has been operating at an average annual surplus of $3.84 million for the same period.

Following receipt of the 2019 solvency report prepared by the UEF, the DLS projected that, without some kind of financial intervention, the UEF would likely become insolvent in FY 2021.  As a result, SB8 was enacted for FY 2021 only.  The bill decreases SIF’s assessment from 6.5% to 5.5% and increases UEF’s base assessment by 1%, meaning that the maximum amount that may be assessed to fund its operations increases from 2% to 3%.

In fiscal 2019, UEF’s existing 2% assessment generated approximately $8 million in special fund revenues, and UEF anticipates similar revenues in future years. Therefore, altering the assessment in this manner decreases special fund revenues for SIF by approximately $4 million in fiscal 2021 only and increases special fund revenues for UEF by the same amount in fiscal 2021 only.  Since the 1% increase in the FY 2021 UEF assessment is offset by the 1% reduction in assessment that funds SIF, there is no net effect on State revenues as a result of this bill.

As noted above, the provisions of SB8 were intended to be in effect for the fiscal year 2021, only.  SB8 is set to terminate on June 30, 2021.  As such, effective July 1, 2021, the assessment on certain workers’ compensation awards and settlements that fund the Subsequent Injury Fund (SIF) and the Uninsured Employers’ Fund (UEF) will return to the pre-bill assessment rates of 5.5% and 1% (base assessment), respectively.

2021 Fiscal year-end revenue and expenditure reporting for both the UEF and SIF are pending as of the date of this article and additional alternations to the assessments scheme which especially funds the UEF and SIF are anticipated following the receipt and review of same by the Maryland General Assembly.  Additional information and a more detailed description of the UEF’s financial status can be found on page 8 of the fiscal 2021 budget analysis for UEF on the Maryland General Assembly website: http://mgaleg.maryland.gov/Pubs/BudgetFiscal/2021fy-budget-docs-operating-C96J00-Uninsured-Employers-Fund.pdf#page=8.

Written by associate Kara Parker.