Changes proposed to workers’ compensation disability benefits

The Business and Labor Committee heard joint testimony Feb. 23 on two measures related to workers’ compensation disability benefits.

Currently, the Nebraska Workers’ Compensation Act provides benefits for lost wages beginning the eighth calendar day of disability due to a work-related injury. The first seven days of benefits are retroactively paid to the employee if the injury continues for at least six weeks.

LB1009, introduced by Lincoln Sen. George Dungan, would allow employees to begin collecting benefits on the fourth calendar day and to qualify for retroactive payments after two weeks of continued disability.

Dungan also introduced a measure to extend temporary disability benefits if an injury becomes permanent. LB1011 would continue benefits until a maximum medical impairment rating is determined, with no credit against the permanent benefit, or until a loss of earning capacity is determined.

The bill also would require employers to provide a 30-day notice to employees before ceasing temporary disability benefits and to share the evidence used to make that determination. In addition, an employee could request an independent medical evaluation, at the employer’s expense, if evidence other than that from the treating physician was used to make the determination.

Dungan said the measures would provide important and practical updates to improve timely access to benefits, promote fairness, increase transparency and provide clear standards for both employers and employees.

“For many Nebraskans, even a short interruption in income can create significant financial strain,” Dungan said. “These adjustments recognize the real world challenges faced by workers recovering from injuries.”

Nick Grandgenett of Nebraska Appleseed testified in support of LB1009, noting that the seven-day delay before an injured employee can receive benefits is the longest in the country.

“These long waiting periods can mean opportunities for bad actor employers to steer people away from the workers’ [compensation] system,” he said.

Grandgenett said the measure mirrors workers’ compensation practices in several neighboring states — including Iowa, Missouri and Colorado — that all provide benefits to injured employees after three days, with a retroactive period of 14 days.

Brody Ockander testified in support of LB1011 on behalf of the Nebraska Association of Trial Attorneys.

The process to determine if an individual qualifies for permanent disability can take several months, he said, and includes obtaining an impairment rating, permanent restrictions from a physical therapist and a loss of income determination from a vocational specialist.

“[This measure] helps injured workers … level the playing field,” Ockander said.

Phoebe Lurz, assistant attorney general in the Civil Litigation Bureau, testified in opposition to LB1011. She said employees already have the right to choose their own treating physician, who is given significant deference throughout the determination process.

“[LB1011] effectively results in [employers] paying litigation expenses by providing the employee with an opportunity to back up the opinions of their treating provider,” Lurz said. “We believe this disincentivises a return to work and return to health.”

Ryan McIntosh spoke in opposition to both proposals on behalf of Nebraskans for Workers’ Compensation Equity and Fairness, the National Federation of Independent Business and a number of other business organizations.

He expressed concern that the bills could lead to providing additional disability benefits to individuals who have returned to work or who have engaged in fraudulent or improper conduct within the workers’ compensation system.

“There’s no reason why an employer should have to pay an additional 30 days of benefits to a claimant if the employer has a valid reason to terminate temporary disability payments,” McIntosh said.

The committee took no immediate action on LB1009 or LB1011.