1.1                          A bill for an act 
  1.2             relating to workers' compensation; modifying 
  1.3             provisions relating to permanent partial disability; 
  1.4             amending Minnesota Statutes 1994, sections 176.021, 
  1.5             subdivision 3; 176.061, subdivision 10; 176.101, 
  1.6             subdivisions 2, 6, and by adding a subdivision; 
  1.7             176.105, subdivision 4; 176.179; 176.221, subdivision 
  1.8             6a; and 268.08, subdivision 3; repealing Minnesota 
  1.9             Statutes 1994, sections 176.011, subdivision 26; and 
  1.10            176.101, subdivisions 3a, 3b, 3c, 3d, 3e, 3f, 3g, 3h, 
  1.11            3i, 3j, 3k, 3l, 3m, 3n, 3o, 3p, 3q, 3r, 3s, 3t, and 3u.
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13     Section 1.  Minnesota Statutes 1994, section 176.021, 
  1.14  subdivision 3, is amended to read: 
  1.15     Subd. 3.  [COMPENSATION, COMMENCEMENT OF PAYMENT.] All 
  1.16  employers shall commence payment of compensation at the time and 
  1.17  in the manner prescribed by this chapter without the necessity 
  1.18  of any agreement or any order of the division.  Except for 
  1.19  medical, burial, and other nonperiodic benefits, payments shall 
  1.20  be made as nearly as possible at the intervals when the wage was 
  1.21  payable, provided, however, that payments for permanent partial 
  1.22  disability shall be governed by section 176.101.  If doubt 
  1.23  exists as to the eventual permanent partial disability, payment 
  1.24  for the economic recovery compensation or impairment 
  1.25  compensation, whichever is due, pursuant to section 176.101, 
  1.26  shall be then made when due for the minimum permanent partial 
  1.27  disability ascertainable, and further payment shall be made upon 
  1.28  any later ascertainment of greater permanent partial 
  2.1   disability.  Prior to or at the time of commencement of the 
  2.2   payment of economic recovery compensation or lump sum or 
  2.3   periodic payment of impairment permanent partial compensation, 
  2.4   the employee and employer shall be furnished with a copy of the 
  2.5   medical report upon which the payment is based and all other 
  2.6   medical reports which the insurer has that indicate a permanent 
  2.7   partial disability rating, together with a statement by the 
  2.8   insurer as to whether the tendered payment is for minimum 
  2.9   permanent partial disability or final and eventual disability.  
  2.10  After receipt of all reports available to the insurer that 
  2.11  indicate a permanent partial disability rating, the employee 
  2.12  shall make available or permit the insurer to obtain any medical 
  2.13  report that the employee has or has knowledge of that contains a 
  2.14  permanent partial disability rating which the insurer does not 
  2.15  already have.  Economic recovery compensation or impairment 
  2.16  Permanent partial compensation pursuant to section 176.101 is 
  2.17  payable in addition to but not concurrently with compensation 
  2.18  for temporary total disability but is payable pursuant to 
  2.19  section 176.101.  Impairment Permanent partial compensation is 
  2.20  payable concurrently and in addition to compensation for 
  2.21  permanent total disability pursuant to section 
  2.22  176.101.  Economic recovery compensation or impairment 
  2.23  compensation Permanent partial compensation pursuant to section 
  2.24  176.101 shall be withheld pending completion of payment for 
  2.25  temporary total disability, and no credit shall be taken for 
  2.26  payment of economic recovery compensation or 
  2.27  impairment permanent partial compensation against liability for 
  2.28  temporary total or future permanent total disability.  Liability 
  2.29  on the part of an employer or the insurer for disability of a 
  2.30  temporary total, temporary partial, and permanent total nature 
  2.31  shall be considered as a continuing product and part of the 
  2.32  employee's inability to earn or reduction in earning capacity 
  2.33  due to injury or occupational disease and compensation is 
  2.34  payable accordingly, subject to section 176.101.  Economic 
  2.35  recovery compensation or impairment Permanent partial 
  2.36  compensation is payable for functional loss of use or impairment 
  3.1   of function, permanent in nature, and payment therefore shall be 
  3.2   separate, distinct, and in addition to payment for any other 
  3.3   compensation, subject to section 176.101.  The right to receive 
  3.4   temporary total, temporary partial, or permanent total 
  3.5   disability payments vests in the injured employee or the 
  3.6   employee's dependents under this chapter or, if none, in the 
  3.7   employee's legal heirs at the time the disability can be 
  3.8   ascertained and the right is not abrogated by the employee's 
  3.9   death prior to the making of the payment. 
  3.10     The right to receive economic recovery permanent partial 
  3.11  compensation or impairment compensation vests in an injured 
  3.12  employee at the time the disability can be ascertained provided 
  3.13  that the employee lives for at least 30 days beyond the date of 
  3.14  the injury.  Upon the death of an employee who is receiving 
  3.15  economic recovery compensation or impairment compensation, 
  3.16  further compensation is payable pursuant to section 176.101.  
  3.17  Impairment compensation is payable under this paragraph if 
  3.18  vesting has occurred, the employee dies prior to reaching 
  3.19  maximum medical improvement, and the requirements and conditions 
  3.20  under section 176.101, subdivision 3e, are not met.  
  3.21     Disability ratings for permanent partial disability shall 
  3.22  be based on objective medical evidence.  
  3.23     Sec. 2.  Minnesota Statutes 1994, section 176.061, 
  3.24  subdivision 10, is amended to read: 
  3.25     Subd. 10.  [INDEMNITY.] Notwithstanding the provisions of 
  3.26  chapter 65B or any other law to the contrary, an employer has a 
  3.27  right of indemnity for any compensation paid or payable pursuant 
  3.28  to this chapter, including temporary total compensation, 
  3.29  temporary partial compensation, permanent partial disability, 
  3.30  economic recovery compensation, impairment compensation, medical 
  3.31  compensation, rehabilitation, death, and permanent total 
  3.32  compensation.  
  3.33     Sec. 3.  Minnesota Statutes 1994, section 176.101, 
  3.34  subdivision 2, is amended to read: 
  3.35     Subd. 2.  [TEMPORARY PARTIAL DISABILITY.] (a) In all cases 
  3.36  of temporary partial disability the compensation shall be 66-2/3 
  4.1   percent of the difference between the weekly wage of the 
  4.2   employee at the time of injury and the wage the employee is able 
  4.3   to earn in the employee's partially disabled condition.  This 
  4.4   compensation shall be paid during the period of disability 
  4.5   except as provided in this section, payment to be made at the 
  4.6   intervals when the wage was payable, as nearly as may be, and 
  4.7   subject to the maximum rate for temporary total compensation.  
  4.8      (b) Except as provided under subdivision 3k, Temporary 
  4.9   partial compensation may be paid only while the employee is 
  4.10  employed, earning less than the employee's weekly wage at the 
  4.11  time of the injury, and the reduced wage the employee is able to 
  4.12  earn in the employee's partially disabled condition is due to 
  4.13  the injury.  Except as provided in section 176.102, subdivision 
  4.14  11, paragraph (b), temporary partial compensation may not be 
  4.15  paid for more than 225 weeks, or after 450 weeks after the date 
  4.16  of injury, whichever occurs first.  
  4.17     (c) Temporary partial compensation must be reduced to the 
  4.18  extent that the wage the employee is able to earn in the 
  4.19  employee's partially disabled condition plus the temporary 
  4.20  partial disability payment otherwise payable under this 
  4.21  subdivision exceeds 500 percent of the statewide average weekly 
  4.22  wage. 
  4.23     Sec. 4.  Minnesota Statutes 1994, section 176.101, is 
  4.24  amended by adding a subdivision to read: 
  4.25     Subd. 2a.  [PERMANENT PARTIAL DISABILITY.] (a) Compensation 
  4.26  for permanent partial disability is as provided in this 
  4.27  subdivision.  Permanent partial disability must be rated as a 
  4.28  percentage of the whole body in accordance with rules adopted by 
  4.29  the commissioner under section 176.105.  The percentage 
  4.30  determined pursuant to the rules must be multiplied by the 
  4.31  corresponding amount in the following table: 
  4.32        Impairment rating                 Amount
  4.33            (percent)
  4.34              0-5                         $ 65,000
  4.35              6-10                          67,500
  4.36             11-15                          70,000
  5.1              16-20                          72,500
  5.2              21-25                          75,000
  5.3              26-30                          80,000
  5.4              31-35                          90,000
  5.5              36-40                         100,000
  5.6              41-45                         110,000
  5.7              46-50                         120,000
  5.8              51-55                         140,000
  5.9              56-60                         160,000
  5.10             61-65                         200,000
  5.11             66-70                         250,000
  5.12             71-75                         300,000
  5.13             76-80                         350,000
  5.14             81-85                         400,000
  5.15             86-90                         450,000
  5.16             91-95                         500,000
  5.17             96-100                        600,000
  5.18  An employee may not receive compensation for more than a 100 
  5.19  percent disability of the whole body, even if the employee 
  5.20  sustains disability to two or more body parts. 
  5.21     (b) Permanent partial disability is payable upon cessation 
  5.22  of temporary total disability under subdivision 1.  The 
  5.23  compensation is payable in installments at the same intervals 
  5.24  and in the same amount as the employee's temporary total 
  5.25  disability rate on the date of injury.  Permanent partial 
  5.26  disability is not payable while temporary total compensation is 
  5.27  being paid.  Permanent partial disability is payable to 
  5.28  permanently totally disabled employees in installments at the 
  5.29  same intervals and the same amount as the employee's permanent 
  5.30  total disability rate on the date of injury commencing at the 
  5.31  time the disability can be ascertained. 
  5.32     Sec. 5.  Minnesota Statutes 1994, section 176.101, 
  5.33  subdivision 6, is amended to read: 
  5.34     Subd. 6.  [MINORS; APPRENTICES.] (a) If any employee 
  5.35  entitled to the benefits of this chapter is an apprentice of any 
  5.36  age and sustains a personal injury arising out of and in the 
  6.1   course of employment resulting in permanent total or a 
  6.2   compensable permanent partial disability, for the purpose of 
  6.3   computing the compensation to which the employee is entitled for 
  6.4   the injury, the compensation rate for temporary total, temporary 
  6.5   partial, a or permanent total disability or economic recovery 
  6.6   compensation shall be the maximum rate for temporary total 
  6.7   disability under subdivision 1. 
  6.8      (b) If any employee entitled to the benefits of this 
  6.9   chapter is a minor and sustains a personal injury arising out of 
  6.10  and in the course of employment resulting in permanent total 
  6.11  disability, for the purpose of computing the compensation to 
  6.12  which the employee is entitled for the injury, the compensation 
  6.13  rate for a permanent total disability shall be the maximum rate 
  6.14  for temporary total disability under subdivision 1. 
  6.15     Sec. 6.  Minnesota Statutes 1994, section 176.105, 
  6.16  subdivision 4, is amended to read: 
  6.17     Subd. 4.  [LEGISLATIVE INTENT; RULES; LOSS OF MORE THAN ONE 
  6.18  BODY PART.] (a) For the purpose of establishing a disability 
  6.19  schedule pursuant to clause (b), the legislature declares its 
  6.20  intent that the commissioner establish a disability schedule 
  6.21  which, assuming the same number and distribution of severity of 
  6.22  injuries, the aggregate total of impairment compensation and 
  6.23  economic recovery compensation benefits under section 176.101, 
  6.24  subdivisions 3a to 3u be approximately equal to the total 
  6.25  aggregate amount payable for permanent partial disabilities 
  6.26  under section 176.101, subdivision 3, provided, however, that 
  6.27  awards for specific injuries under the proposed schedule need 
  6.28  not be the same as they were for the same injuries under the 
  6.29  schedule pursuant to section 176.101, subdivision 3.  The 
  6.30  schedule shall be determined by sound actuarial evaluation and 
  6.31  shall be based on the benefit level which exists on January 1, 
  6.32  1983.  
  6.33     (b) The commissioner shall by rulemaking adopt procedures 
  6.34  setting forth rules for the evaluation and rating of functional 
  6.35  disability and the schedule for permanent partial disability and 
  6.36  to determine the percentage of loss of function of a part of the 
  7.1   body based on the body as a whole, including internal organs, 
  7.2   described in section 176.101, subdivision 3, and any other body 
  7.3   part not listed in section 176.101, subdivision 3, which the 
  7.4   commissioner deems appropriate.  
  7.5      The rules shall promote objectivity and consistency in the 
  7.6   evaluation of permanent functional impairment due to personal 
  7.7   injury and in the assignment of a numerical rating to the 
  7.8   functional impairment.  
  7.9      Prior to adoption of rules the commissioner shall conduct 
  7.10  an analysis of the current permanent partial disability schedule 
  7.11  for the purpose of determining the number and distribution of 
  7.12  permanent partial disabilities and the average compensation for 
  7.13  various permanent partial disabilities.  The commissioner shall 
  7.14  consider setting the compensation under the proposed schedule 
  7.15  for the most serious conditions higher in comparison to the 
  7.16  current schedule and shall consider decreasing awards for minor 
  7.17  conditions in comparison to the current schedule.  
  7.18     The commissioner may consider, among other factors, and 
  7.19  shall not be limited to the following factors in developing 
  7.20  rules for the evaluation and rating of functional disability and 
  7.21  the schedule for permanent partial disability benefits:  
  7.22     (1) the workability and simplicity of the procedures with 
  7.23  respect to the evaluation of functional disability; 
  7.24     (2) the consistency of the procedures with accepted medical 
  7.25  standards; 
  7.26     (3) rules, guidelines, and schedules that exist in other 
  7.27  states that are related to the evaluation of permanent partial 
  7.28  disability or to a schedule of benefits for functional 
  7.29  disability provided that the commissioner is not bound by the 
  7.30  degree of disability in these sources but shall adjust the 
  7.31  relative degree of disability to conform to the expressed intent 
  7.32  of clause (a) this section; 
  7.33     (4) rules, guidelines, and schedules that have been 
  7.34  developed by associations of health care providers or 
  7.35  organizations provided that the commissioner is not bound by the 
  7.36  degree of disability in these sources but shall adjust the 
  8.1   relative degree of disability to conform to the expressed intent 
  8.2   of clause (a) this section; 
  8.3      (5) the effect the rules may have on reducing litigation; 
  8.4      (6) the treatment of preexisting disabilities with respect 
  8.5   to the evaluation of permanent functional disability provided 
  8.6   that any preexisting disabilities must be objectively determined 
  8.7   by medical evidence; and 
  8.8      (7) symptomatology and loss of function and use of the 
  8.9   injured member.  
  8.10     The factors in paragraphs (1) to (7) shall not be used in 
  8.11  any individual or specific workers' compensation claim under 
  8.12  this chapter but shall be used only in the adoption of rules 
  8.13  pursuant to this section.  
  8.14     Nothing listed in paragraphs (1) to (7) shall be used to 
  8.15  dispute or challenge a disability rating given to a part of the 
  8.16  body so long as the whole schedule conforms with the expressed 
  8.17  intent of clause (a) this section. 
  8.18     (c) If an employee suffers a permanent functional 
  8.19  disability of more than one body part due to a personal injury 
  8.20  incurred in a single occurrence, the percent of the whole body 
  8.21  which is permanently partially disabled shall be determined by 
  8.22  the following formula so as to ensure that the percentage for 
  8.23  all functional disability combined does not exceed the total for 
  8.24  the whole body:  
  8.25                           A + B (1 - A) 
  8.26     where:  A is the greater percentage whole body loss of the 
  8.27  first body part; and B is the lesser percentage whole body loss 
  8.28  otherwise payable for the second body part.  A + B (1-A) is 
  8.29  equivalent to A + B - AB.  
  8.30     For permanent partial disabilities to three body parts due 
  8.31  to a single occurrence or as the result of an occupational 
  8.32  disease, the above formula shall be applied, providing that A 
  8.33  equals the result obtained from application of the formula to 
  8.34  the first two body parts and B equals the percentage for the 
  8.35  third body part.  For permanent partial disability to four or 
  8.36  more body parts incurred as described above, A equals the result 
  9.1   obtained from the prior application of the formula, and B equals 
  9.2   the percentage for the fourth body part or more in arithmetic 
  9.3   progressions. 
  9.4      Sec. 7.  Minnesota Statutes 1994, section 176.179, is 
  9.5   amended to read: 
  9.6      176.179 [RECOVERY OF OVERPAYMENTS.] 
  9.7      Notwithstanding section 176.521, subdivision 3, or any 
  9.8   other provision of this chapter to the contrary, except as 
  9.9   provided in this section, no lump sum or weekly payment, or 
  9.10  settlement, which is voluntarily paid to an injured employee or 
  9.11  the survivors of a deceased employee in apparent or seeming 
  9.12  accordance with the provisions of this chapter by an employer or 
  9.13  insurer, or is paid pursuant to an order of the workers' 
  9.14  compensation division, a compensation judge, or court of appeals 
  9.15  relative to a claim by an injured employee or the employee's 
  9.16  survivors, and received in good faith by the employee or the 
  9.17  employee's survivors shall be refunded to the paying employer or 
  9.18  insurer in the event that it is subsequently determined that the 
  9.19  payment was made under a mistake in fact or law by the employer 
  9.20  or insurer.  When the payments have been made to a person who is 
  9.21  entitled to receive further payments of compensation for the 
  9.22  same injury, the mistaken compensation may be taken as a full 
  9.23  credit against future lump sum benefit entitlement and as a 
  9.24  partial credit against future weekly periodic benefits.  The 
  9.25  credit applied against further payments of temporary total 
  9.26  disability, temporary partial disability, permanent partial 
  9.27  disability, permanent total disability, retraining benefits, 
  9.28  death benefits, or weekly payments of economic recovery or 
  9.29  impairment compensation shall not exceed 20 percent of the 
  9.30  amount that would otherwise be payable. 
  9.31     A credit may not be applied against medical expenses due or 
  9.32  payable.  
  9.33     Where the commissioner or compensation judge determines 
  9.34  that the mistaken compensation was not received in good faith, 
  9.35  the commissioner or compensation judge may order reimbursement 
  9.36  of the compensation.  For purposes of this section, a payment is 
 10.1   not received in good faith if it is obtained through fraud, or 
 10.2   if the employee knew that the compensation was paid under 
 10.3   mistake of fact or law, and the employee has not refunded the 
 10.4   mistaken compensation. 
 10.5      Sec. 8.  Minnesota Statutes 1994, section 176.221, 
 10.6   subdivision 6a, is amended to read: 
 10.7      Subd. 6a.  [MEDICAL, REHABILITATION, ECONOMIC RECOVERY, AND 
 10.8   IMPAIRMENT AND PERMANENT PARTIAL COMPENSATION.] The penalties 
 10.9   provided by this section apply in cases where payment for 
 10.10  treatment under section 176.135, rehabilitation expenses under 
 10.11  section 176.102, subdivisions 9 and 11, economic recovery 
 10.12  compensation or impairment compensation or permanent partial 
 10.13  compensation are not made in a timely manner as required by law 
 10.14  or by rule adopted by the commissioner.  
 10.15     Sec. 9.  Minnesota Statutes 1994, section 268.08, 
 10.16  subdivision 3, is amended to read: 
 10.17     Subd. 3.  [NOT ELIGIBLE.] An individual shall not be 
 10.18  eligible to receive benefits for any week with respect to which 
 10.19  the individual is receiving, has received, or has filed a claim 
 10.20  for remuneration in an amount equal to or in excess of the 
 10.21  individual's weekly benefit amount in the form of: 
 10.22     (1) termination, severance, or dismissal payment or wages 
 10.23  in lieu of notice whether legally required or not; provided that 
 10.24  if a termination, severance, or dismissal payment is made in a 
 10.25  lump sum, such lump sum payment shall be allocated over a period 
 10.26  equal to the lump sum divided by the employee's regular pay 
 10.27  while employed by such employer; provided such payment shall be 
 10.28  applied for a period immediately following the last day of 
 10.29  employment but not to exceed 28 calendar days provided that 50 
 10.30  percent of the total of any such payments in excess of eight 
 10.31  weeks shall be similarly allocated to the period immediately 
 10.32  following the 28 days; or 
 10.33     (2) vacation allowance paid directly by the employer for a 
 10.34  period of requested vacation, including vacation periods 
 10.35  assigned by the employer under the provisions of a collective 
 10.36  bargaining agreement, or uniform vacation shutdown; or 
 11.1      (3) compensation for loss of wages under the workers' 
 11.2   compensation law of this state or any other state or under a 
 11.3   similar law of the United States, or under other insurance or 
 11.4   fund established and paid for by the employer except that this 
 11.5   does not apply to an individual who is receiving temporary 
 11.6   partial compensation pursuant to section 176.101, subdivision 
 11.7   3k; or 
 11.8      (4) 50 percent of the pension payments from any fund, 
 11.9   annuity or insurance maintained or contributed to by a base 
 11.10  period employer including the armed forces of the United States 
 11.11  if the employee contributed to the fund, annuity or insurance 
 11.12  and all of the pension payments if the employee did not 
 11.13  contribute to the fund, annuity or insurance; or 
 11.14     (5) 50 percent of a primary insurance benefit under title 
 11.15  II of the Social Security Act, as amended, or similar old age 
 11.16  benefits under any act of Congress or this state or any other 
 11.17  state. 
 11.18     Provided, that if such remuneration is less than the 
 11.19  benefits which would otherwise be due under sections 268.03 to 
 11.20  268.231, the individual shall be entitled to receive for such 
 11.21  week, if otherwise eligible, benefits reduced by the amount of 
 11.22  such remuneration; provided, further, that if the appropriate 
 11.23  agency of such other state or the federal government finally 
 11.24  determines that the individual is not entitled to such benefits, 
 11.25  this provision shall not apply.  If the computation of reduced 
 11.26  benefits, required by this subdivision, is not a whole dollar 
 11.27  amount, it shall be rounded down to the next lower dollar amount.
 11.28     Sec. 10.  [REPEALER.] 
 11.29     Minnesota Statutes 1994, sections 176.011, subdivision 26; 
 11.30  and 176.101, subdivisions 3a, 3b, 3c, 3d, 3e, 3f, 3g, 3h, 3i, 
 11.31  3j, 3k, 3l, 3m, 3n, 3o, 3p, 3q, 3r, 3s, 3t, and 3u, are repealed.
 11.32     Sec. 11.  [EFFECTIVE DATE.] 
 11.33     Sections 1 to 10 are effective October 1, 1995.