HF 4598

1st Engrossment - 94th Legislature (2025 - 2026)

Posted on 04/21/2026 08:46 a.m.

A bill for an act
relating to workers' compensation; adopting 2026 recommendations of the Workers'
Compensation Advisory Council; amending Minnesota Statutes 2024, sections
79.34, subdivisions 3, 4; 79.35; 79.36; 79.362; 79.38, subdivision 1; 175A.05, by
adding a subdivision; 176.011, subdivision 15; 176.081, subdivision 9; 176.101,
subdivision 2a; 176.155, subdivision 1; 176.221, subdivision 1; 176.322; repealing
Minnesota Statutes 2024, sections 79.34, subdivision 2a; 79.361; 79.363.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 79.34, subdivision 3, is amended to read:

Subd. 3.

Withdrawal from association.

An insurer may withdraw from the reinsurance
association only upon ceasing to be authorized by license issued by the commissioner of
commerce to transact workers' compensation insurance in this state and when all workers'
compensation insurance policies issued by such insurer have expired; a self-insurer may
withdraw from the reinsurance association only upon ceasing to be approved to self-insure
workers' compensation liability in this state pursuant to section 176.181.

An insurer or self-insurer which withdraws or whose membership in the reinsurance
association is terminated shall continue to be bound by the plan of operation. Upon
withdrawal or termination, all unpaid premiums which have been charged to the withdrawing
or terminated member new text begin and any other outstanding amounts owed new text end shall be payable as of the
effective date of the withdrawal or termination.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2024, section 79.34, subdivision 4, is amended to read:

Subd. 4.

Liabilities of insolvent members.

An unsatisfied net liability to the reinsurance
association of an insolvent member shall be deleted text begin assumed by and apportioned among the
remaining members of the reinsurance association as provided in the plan of operation deleted text end new text begin
governed by the plan of operation effective at the time a member is declared insolvent by
a state regulatory authority or a court of competent jurisdiction, whichever comes earlier new text end .
The reinsurance association shall have all rights allowed by law on behalf of the remaining
members against the estate or funds of the insolvent member for sums due the reinsurance
association.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2024, section 79.35, is amended to read:

79.35 DUTIES; RESPONSIBILITIES; POWERS.

The reinsurance association shall do the following on behalf of its members:

(1) assume 100 percent of the liability as provided in section 79.34;

(2) establish procedures by which members shall promptly report to the reinsurance
association each claim which, on the basis of the injury sustained, may reasonably be
anticipated to involve liability to the reinsurance association if the member is held liable
under chapter 176. Solely for the purpose of reporting claims, the member shall in all
instances consider itself legally liable for the injury. The member shall advise the reinsurance
association of subsequent developments likely to materially affect the interest of the
reinsurance association in the claim;

(3) maintain relevant loss and expense data relative to all liabilities of the reinsurance
association and require each member to furnish statistics in connection with liabilities of
the reinsurance association at the times and in the form and detail as may be required by
the plan of operation;

(4) calculate and charge to members a total premium sufficient to cover the expected
liability which the reinsurance association will incur, together with incurred or estimated
to be incurred operating and administrative expenses for the period to which this premium
applies. Each member shall be charged a premium established by the board as sufficient to
cover the reinsurance association's incurred liabilities and expenses in excess of the member's
selected retention limit. Each member shall be charged a proportion of the total premium
calculated for its selected retention limit in an amount equal to its proportion of the exposure
base of all members during the period to which the reinsurance association premium will
apply. The exposure base shall be determined by the board and is subject to the approval
of the commissioner of labor and industry. In determining the exposure base, the board shall
consider, among other things, equity, administrative convenience, records maintained by
members, amenability to audit, and degree of risk refinement. deleted text begin Each member shall also be
charged a premium determined by the board to equitably distribute excess or deficient
premiums from previous periods including any excess or deficient premiums resulting from
a retroactive change in the prefunded limit. deleted text end The premiums charged to members shall not
be unfairly discriminatory as defined in section 79.074. All premiums shall be approved by
the commissioner of labor and industry;

(5) require and accept the payment of premiums from members of the reinsurance
association;

(6) receive and distribute all sums required by the operation of the reinsurance association;

(7) establish procedures for reviewing claims procedures and practices of members of
the reinsurance association. If the claims procedures or practices of a member are considered
inadequate to properly service the liabilities of the reinsurance association, the reinsurance
association may undertake, or may contract with another person, including another member,
to adjust or assist in the adjustment of claims which create a potential liability to the
association. The reinsurance association may charge the cost of the adjustment under this
paragraph to the member, except that any penalties or interest incurred under sections
176.183, 176.221, 176.225, and 176.82 as a result of actions by the reinsurance association
after it has undertaken adjustment of the claim shall not be charged to the member but shall
be included in the ultimate loss and listed as a separate item; deleted text begin and
deleted text end

(8) provide each member of the reinsurance association with an annual report of the
operations of the reinsurance association in a form the board of directors may specify deleted text begin . deleted text end new text begin ;
new text end

new text begin (9) equitably distribute excess or deficient premiums from previous periods to members
based on amounts determined by the board. All excess or deficient premiums shall be
approved by the commissioner of labor and industry;
new text end

new text begin (10) distribute excess surplus as recommended by the board and approved by order of
the commissioner of labor and industry consistent with section 79.362; and
new text end

new text begin (11) collect deficiency assessments as recommended by the board and approved by order
of the commissioner of commerce consistent with section 79.362.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2024, section 79.36, is amended to read:

79.36 ADDITIONAL POWERS.

In addition to the powers granted in section 79.35, the reinsurance association may do
the following:

(1) sue and be sued. A judgment against the reinsurance association shall not create any
direct liability against the individual members of the reinsurance association. The reinsurance
association shall provide in the plan of operation for the indemnification, to the extent
provided in the plan of operation, of the members, members of the board of directors of the
reinsurance association, and officers, employees and other persons lawfully acting on behalf
of the reinsurance association;

(2) reinsure all or any portion of its potential liability deleted text begin , including potential liability in
excess of the prefunded limit, deleted text end with reinsurers licensed to transact insurance in this state or
otherwise approved by the commissioner of labor and industry;

(3) provide for appropriate housing, equipment, and personnel as may be necessary to
assure the efficient operation of the reinsurance association;

(4) contract for goods and services, including but not limited to independent claims
management, actuarial, investment, and legal services from others within or without this
state to assure the efficient operation of the reinsurance association;

(5) adopt operating rules, consistent with the plan of operation, for the administration
of the reinsurance association, enforce those operating rules, and delegate authority as
necessary to assure the proper administration and operation of the reinsurance association;

(6) intervene in or prosecute at any time, including but not limited to intervention or
prosecution as subrogee to the member's rights in a third-party action, any proceeding under
this chapter or chapter 176 in which liability of the reinsurance association may, in the
opinion of the board of directors of the reinsurance association or its designee, be established,
or the reinsurance association affected in any other way;

(7) the net proceeds derived from intervention or prosecution of any subrogation interest,
or other recovery, shall first be used to reimburse the reinsurance association for amounts
paid or payable pursuant to this chapter, together with any expenses of recovery, including
attorney's fees, and any excess shall be paid to the member or other person entitled thereto,
as determined by the board of directors of the reinsurance association, unless otherwise
ordered by a court;

(8) hear and determine complaints of a company or other interested party concerning
the operation of the reinsurance association; and

(9) perform other acts not specifically enumerated in this section which are necessary
or proper to accomplish the purposes of the reinsurance association and which are not
inconsistent with sections 79.34 to 79.40 or the plan of operation.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2024, section 79.362, is amended to read:

79.362 WORKERS' COMPENSATION REINSURANCE ASSOCIATION EXCESS
SURPLUS DISTRIBUTION new text begin OR DEFICIENCY ASSESSMENT new text end .

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin This section governs excess surplus distributions and deficiency
assessment of the reinsurance association. An excess surplus distribution is not a distribution
of excess premiums to members. The reinsurance association may not distribute excess
surplus or assess members due to a deficiency except as provided for in this section. For
purposes of this section, "insured employers" includes employers insured by insurer members
and employers insured by the assigned risk plan.
new text end

new text begin Subd. 2. new text end

new text begin Declaration of distribution or assessment. new text end

new text begin (a) The board may declare an
excess surplus distribution to self-insurer members and insured employers. The board shall
determine the amount of excess surplus and set a timeline, a distribution rate for self-insurer
members, and a distribution rate for insured employers as applied to the distribution exposure
bases of self-insurer members and insured employers. The board shall notify the
commissioner of labor and industry of the amount of excess surplus and recommended
distribution rates and, if the commissioner is in agreement with the board's recommendation,
the commissioner shall issue an order approving the recommended distribution.
new text end

new text begin (b) new text end An order of the commissioner of deleted text begin the Department of deleted text end labor and industry relating to
the deleted text begin distribution of deleted text end excess surplus new text begin distribution new text end of the Workers' Compensation Reinsurance
Association shall be reviewed by the commissioner of commerce. The commissioner of
commerce may amend, approve, or reject an order or issue further orders to accomplish the
purposes of new text begin this new text end section deleted text begin 79.361 and Laws 1993, chapter 361, section 2 deleted text end . The commissioner
new text begin of commerce new text end may not change the amount of the distribution ordered by the commissioner
of labor and industry without agreement of the commissioner of labor and industry.

new text begin (c) If the board determines that an excess surplus distribution resulted in inadequate
funds being available to pay claims that arose during the period upon which the distribution
was calculated, the board shall determine the amount of the deficiency. The board shall
notify the commissioner of commerce of the amount of deficiency and recommend
assessment rates and the time period for an assessment for self-insurer members and insured
employers. The commissioner of commerce shall order an assessment at the rates and for
the time period necessary to eliminate the deficiency with consideration of potential financial
hardship to employers. The assessment rates shall be applied to the exposure bases of
self-insured employers and insured employers. All assessments under this section are payable
to the association. The commissioner of commerce may issue orders necessary to administer
this section.
new text end

new text begin Subd. 3. new text end

new text begin Administration of distribution or assessment. new text end

new text begin The reinsurance association
may consider the actual and reasonable costs of distribution or assessment in determining
the amount to be distributed or assessed. The excess surplus distribution or deficiency
assessment may not be retroactive and applies only prospectively. Self-insurer members,
insurer members, and the Minnesota Workers' Compensation Insurers Association must
provide any information to the reinsurance association that the association determines
necessary to administer this section. Any part of the excess surplus distribution not distributed
within one year due to the inability to identify or locate insured employers remains with the
reinsurance association and must not be distributed to its members.
new text end

new text begin Subd. 4. new text end

new text begin Plan of operation. new text end

new text begin The reinsurance association's plan of operation must provide
the method for determining rates and exposure bases, the method for excess surplus
distribution, and the method of collecting a deficiency assessment. For multiyear distributions
or assessments, the exposure bases and rates shall be recalculated for each policy year of
the excess surplus distribution or deficiency assessment.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

Minnesota Statutes 2024, section 79.38, subdivision 1, is amended to read:

Subdivision 1.

Provisions.

The plan of operation shall provide for all of the following:

(a) the establishment of necessary facilities;

(b) the management and operation of the reinsurance association;

(c) a preliminary premium, payable by each member in proportion to its total premium
in the year preceding the inauguration of the reinsurance association, for initial expenses
necessary to commence operation of the reinsurance association;

(d) procedures to be utilized in charging premiums deleted text begin , including adjustments from excess
or deficient premiums from prior periods deleted text end ;

(e) procedures governing the actual payment of premiums to the reinsurance association;

(f) reimbursement of each member of the board by the reinsurance association for actual
and necessary expenses incurred on reinsurance association business;

(g) the composition, terms, compensation and other necessary rules consistent with
section 79.37 for boards of directors of the reinsurance association;

(h) the investment policy of the reinsurance association; deleted text begin and
deleted text end

new text begin (i) the method for determining rates and exposure bases, the method for excess surplus
distribution, and the method of collecting a deficiency assessment; and
new text end

deleted text begin (i) deleted text end new text begin (j) new text end any other matters required by or necessary to effectively implement sections 79.34
to 79.40.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7.

Minnesota Statutes 2024, section 175A.05, is amended by adding a subdivision to
read:

new text begin Subd. 4. new text end

new text begin Active compensation judges. new text end

new text begin If the number of Workers' Compensation Court
of Appeals judges available to hear a case is insufficient to constitute a quorum and retired
judges are not available to meet the quorum requirement, the chief judge of the Workers'
Compensation Court of Appeals may, with the consent of the chief judge of the Court of
Administrative Hearings, assign an active compensation judge from that court to hear any
case properly assigned to a judge of the Workers' Compensation Court of Appeals. The
compensation judge assigned to the case may act on that case with the full powers of a judge
of the Workers' Compensation Court of Appeals. A compensation judge performing this
service shall receive pay and expenses, calculated on an hourly basis, in the amount and
manner provided by law for judges serving on the Workers' Compensation Court of Appeals.
This compensation will be paid as an adjustment to the judge's normal compensation from
the Court of Administrative Hearings. The Workers' Compensation Court of Appeals will
reimburse the Court of Administrative Hearings based on the number of hours spent
performing this service and any other expenditures incurred.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8.

Minnesota Statutes 2024, section 176.011, subdivision 15, is amended to read:

Subd. 15.

Occupational disease.

(a) "Occupational disease" means a mental impairment
as defined in paragraph (d) or physical disease arising out of and in the course of employment
peculiar to the occupation in which the employee is engaged and due to causes in excess of
the hazards ordinary of employment and shall include undulant fever. Physical stimulus
resulting in mental injury and mental stimulus resulting in physical injury shall remain
compensable. Mental impairment is not considered a disease if it results from a disciplinary
action, work evaluation, job transfer, layoff, demotion, promotion, termination, retirement,
or similar action taken in good faith by the employer. Ordinary diseases of life to which the
general public is equally exposed outside of employment are not compensable, except where
the diseases follow as an incident of an occupational disease, or where the exposure peculiar
to the occupation makes the disease an occupational disease hazard. A disease arises out of
the employment only if there be a direct causal connection between the conditions under
which the work is performed and if the occupational disease follows as a natural incident
of the work as a result of the exposure occasioned by the nature of the employment. An
employer is not liable for compensation for any occupational disease which cannot be traced
to the employment as a direct and proximate cause and is not recognized as a hazard
characteristic of and peculiar to the trade, occupation, process, or employment or which
results from a hazard to which the worker would have been equally exposed outside of the
employment.

(b) If immediately preceding the date of disablement or death, an employee was employed
on active duty with an organized fire or police department of any municipality, as a member
of the Minnesota State Patrol, conservation officer service, state crime bureau, as a forest
officer by the Department of Natural Resources, correctional officer or security counselor
employed by the state or a political subdivision at a corrections, detention, or secure treatment
facility, or sheriff or full-time deputy sheriff of any county, and the disease is that of
myocarditis, coronary sclerosis, pneumonia or its sequel, and at the time of employment
such employee was given a thorough physical examination by a licensed doctor of medicine,
and a written report thereof has been made and filed with such organized fire or police
department, with the Minnesota State Patrol, conservation officer service, state crime bureau,
Department of Natural Resources, Department of Corrections, or sheriff's department of
any county, which examination and report negatived any evidence of myocarditis, coronary
sclerosis, pneumonia or its sequel, the disease is presumptively an occupational disease and
shall be presumed to have been due to the nature of employment. If immediately preceding
the date of disablement or death, any individual who by nature of their position provides
emergency medical care, or an employee who was employed as a licensed police officer
under section 626.84, subdivision 1; firefighter; paramedic; correctional officer or security
counselor employed by the state or a political subdivision at a corrections, detention, or
secure treatment facility; emergency medical technician; or licensed nurse providing
emergency medical care; and who contracts an infectious or communicable disease to which
the employee was exposed in the course of employment outside of a hospital, then the
disease is presumptively an occupational disease and shall be presumed to have been due
to the nature of employment and the presumption may be rebutted by substantial factors
brought by the employer or insurer. Any substantial factors which shall be used to rebut
this presumption and which are known to the employer or insurer at the time of the denial
of liability shall be communicated to the employee on the denial of liability.

(c) A firefighter on active duty with an organized fire department who is unable to
perform duties in the department by reason of a disabling cancer of a type caused by exposure
to heat, radiation, or a known or suspected carcinogen, as defined by the International
Agency for Research on Cancer, and the carcinogen is reasonably linked to the disabling
cancer, is presumed to have an occupational disease under paragraph (a). If a firefighter
who enters the service after August 1, 1988, is examined by a physician prior to being hired
and the examination discloses the existence of a cancer of a type described in this paragraph,
the firefighter is not entitled to the presumption unless a subsequent medical determination
is made that the firefighter no longer has the cancer.

(d) For the purposes of this chapter, "mental impairment" means a diagnosis of
post-traumatic stress disorder by a licensed psychiatrist deleted text begin or deleted text end new text begin , new text end psychologist new text begin , or psychiatric
mental health nurse practitioner new text end . For the purposes of this chapter, "post-traumatic stress
disorder" means the condition as described in the most recently published edition of the
Diagnostic and Statistical Manual of Mental Disorders by the American Psychiatric
Association. For purposes of section 79.34, subdivision 2, one or more compensable mental
impairment claims arising out of a single event or occurrence shall constitute a single loss
occurrence.

(e) If, preceding the date of disablement or death, an employee who was employed on
active duty as: a licensed police officer; a firefighter; a paramedic; an emergency medical
technician; a licensed nurse employed to provide emergency medical services outside of a
medical facility; a public safety dispatcher; a correctional officer or security counselor
employed by the state or a political subdivision at a corrections, detention, or secure treatment
facility; a sheriff or full-time deputy sheriff of any county; or a member of the Minnesota
State Patrol is diagnosed with a mental impairment as defined in paragraph (d), and had not
been diagnosed with the mental impairment previously, then the mental impairment is
presumptively an occupational disease and shall be presumed to have been due to the nature
of employment. This presumption may be rebutted by substantial factors brought by the
employer or insurer. Any substantial factors that are used to rebut this presumption and that
are known to the employer or insurer at the time of the denial of liability shall be
communicated to the employee on the denial of liability. The mental impairment is not
considered an occupational disease if it results from a disciplinary action, work evaluation,
job transfer, layoff, demotion, promotion, termination, retirement, or similar action taken
in good faith by the employer.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for dates of injury on or after October
1, 2026.
new text end

Sec. 9.

Minnesota Statutes 2024, section 176.081, subdivision 9, is amended to read:

Subd. 9.

Retainer agreement.

An attorney who is hired by an employee to provide legal
services with respect to a claim for compensation made pursuant to this chapter shall prepare
a retainer agreement in which the provisions of this section are specifically set out and
provide a copy of this agreement to the employee. The retainer agreement shall provide a
space for the signature of the employee. A signed agreement shall raise a conclusive
presumption that the employee has read and understands the statutory fee provisions. No
fee shall be awarded pursuant to this section in the absence of a signed retainer agreement.

The retainer agreement shall contain a notice to the employee regarding the maximum
fee allowed under this section in ten-point type, which shall read:

Notice of Maximum Fee

The maximum fee allowed by law for legal services is 20 percent of the first deleted text begin $130,000 deleted text end new text begin
$275,000 new text end of compensation awarded to the employee subject to a cumulative maximum fee
of deleted text begin $26,000 deleted text end new text begin $55,000 new text end for fees related to the same injury.

The employee shall take notice that the employee is under no legal or moral obligation
to pay any fee for legal services in excess of the foregoing maximum fee.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment and
applies to dates of injury on or after October 1, 2024.
new text end

Sec. 10.

Minnesota Statutes 2024, section 176.101, subdivision 2a, is amended to read:

Subd. 2a.

Permanent partial disability.

(a) Compensation for permanent partial disability
is as provided in this subdivision. Permanent partial disability must be rated as a percentage
of the whole body in accordance with rules adopted by the commissioner under section
176.105. During the 2026 regular legislative session, and every even-year legislative session
thereafter, the Workers' Compensation Advisory Council must consider whether the
permanent partial disability schedule in paragraph (b) represents adequate compensation
for permanent impairment.

(b) The percentage determined pursuant to the rules adopted under section 176.105 must
be multiplied by the corresponding amount in the following table:

Impairment Rating			Amount
(percent)
less than 5.5		$	deleted text begin 114,260 deleted text end new text begin 137,240 new text end
5.5 to less than 10.5			deleted text begin 121,800 deleted text end new text begin 146,297 new text end
10.5 to less than 15.5			deleted text begin 129,485 deleted text end new text begin 155,527 new text end
15.5 to less than 20.5			deleted text begin 137,025 deleted text end new text begin 164,584 new text end
20.5 to less than 25.5			deleted text begin 139,720 deleted text end new text begin 167,821 new text end
25.5 to less than 30.5			deleted text begin 147,000 deleted text end new text begin 176,565 new text end
30.5 to less than 35.5			deleted text begin 150,150 deleted text end new text begin 180,348 new text end
35.5 to less than 40.5			deleted text begin 163,800 deleted text end new text begin 196,744 new text end
40.5 to less than 45.5			deleted text begin 177,450 deleted text end new text begin 213,139 new text end
45.5 to less than 50.5			deleted text begin 177,870 deleted text end new text begin 213,643 new text end
50.5 to less than 55.5			deleted text begin 181,965 deleted text end new text begin 218,562 new text end
55.5 to less than 60.5			deleted text begin 209,475 deleted text end new text begin 251,605 new text end
60.5 to less than 65.5			deleted text begin 237,090 deleted text end new text begin 284,774 new text end
65.5 to less than 70.5			deleted text begin 264,600 deleted text end new text begin 317,817 new text end
70.5 to less than 75.5			deleted text begin 292,215 deleted text end new text begin 350,986 new text end
75.5 to less than 80.5			deleted text begin 347,340 deleted text end new text begin 417,197 new text end
80.5 to less than 85.5			deleted text begin 402,465 deleted text end new text begin 483,409 new text end
85.5 to less than 90.5			deleted text begin 457,590 deleted text end new text begin 549,621 new text end
90.5 to less than 95.5			deleted text begin 512,715 deleted text end new text begin 615,833 new text end
95.5 up to and including 100			deleted text begin 567,840 deleted text end new text begin 682,045 new text end

An employee may not receive compensation for more than a 100 percent disability of
the whole body, even if the employee sustains disability to two or more body parts.

(c) Permanent partial disability is payable upon cessation of temporary total disability
under subdivision 1. If the employee requests payment in a lump sum, then the compensation
must be paid within 30 days. This lump-sum payment may be discounted to the present
value calculated up to a maximum five percent basis. If the employee does not choose to
receive the compensation in a lump sum, then the compensation is payable in installments
at the same intervals and in the same amount as the employee's temporary total disability
rate on the date of injury. Permanent partial disability is not payable while temporary total
compensation is being paid.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for dates of injury on or after October
1, 2026.
new text end

Sec. 11.

Minnesota Statutes 2024, section 176.155, subdivision 1, is amended to read:

Subdivision 1.

Employer's physician.

(a) The injured employee must submit to
examination by the employer's physician, if requested by the employer, and at reasonable
times thereafter upon the employer's request. Examinations shall not be conducted in hotel
or motel facilities. The examination must be scheduled at a location within 150 miles of the
employee's residence unless the employer can show cause to the office to order an
examination at a location further from the employee's residence. The employee is entitled
upon request to have a personal physician or new text begin unpaid new text end witness present at any such examination.
Each party shall defray the cost of that party's physician new text begin or witness new text end .

(b) Any report or written statement made by the employer's physician as a result of an
examination of the employee, regardless of whether the examination preceded the injury
or was made subsequent to the injury or whether litigation is pending, must be served upon
the employee and the attorney representing the employee, if any, no later than 14 calendar
days within the issuance of the report or written statement.

(c) The employer shall pay reasonable travel expenses incurred by the employee in
attending the examination including mileage, parking, and, if necessary, lodging and meals.
The employer shall also pay the employee for any lost wages resulting from attendance at
the examination.

(d) A self-insured employer or insurer who is served with a claim petition pursuant to
section 176.271, subdivision 1, or 176.291, shall schedule any necessary examinations of
the employee, if an examination by the employer's physician or health care provider is
necessary to evaluate benefits claimed. The examination shall be completed and the report
of the examination shall be served on the employee and filed with the commissioner within
120 days of service of the claim petition. Any request for a good cause extension pursuant
to paragraph (e) must be made within 120 days of service of the claim petition, except that
a request may be made after 120 days of service of a claim petition in the following
circumstances:

(1) a change to the employee's claim regarding the nature and extent of the injury;

(2) a change to the permanency benefits claimed by the employee, including a change
in permanent partial disability percentage;

(3) a new claim for indemnity benefits; or

(4) the employment relationship is not admitted by the uninsured employer.

(e) No evidence relating to the examination or report shall be received or considered by
the commissioner, a compensation judge, or the court of appeals in determining any issues
unless the report has been served and filed as required by this section, unless a written
extension has been granted by the commissioner or compensation judge. The commissioner
or a compensation judge shall extend the time for completing the adverse examination and
filing the report upon good cause shown. The extension must not be for the purpose of delay
and the insurer must make a good faith effort to comply with this subdivision. Good cause
shall include but is not limited to:

(1) that the extension is necessary because of the limited number of physicians or health
care providers available with expertise in the particular injury or disease, or that the extension
is necessary due to the complexity of the medical issues, or

(2) that the extension is necessary to gather additional information which was not included
on the petition as required by section 176.291.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 12.

Minnesota Statutes 2024, section 176.221, subdivision 1, is amended to read:

Subdivision 1.

Commencement of payment.

Within 14 days of notice to or knowledge
by the employer of an injury compensable under this chapter the payment of temporary
total compensation shall commence. Within 14 days of notice to or knowledge by an
employer of a new period of temporary total disability which is caused by an old injury
compensable under this chapter, the payment of temporary total compensation shall
commence; provided that the employer or insurer may file for an extension with the
commissioner within this 14-day period, in which case the compensation need not commence
within the 14-day period but shall commence no later than 30 days from the date of the
notice to or knowledge by the employer of the new period of disability. Commencement of
payment by an employer or insurer does not waive any rights to any defense the employer
has on any claim or incident either with respect to the compensability of the claim under
this chapter or the amount of the compensation due. Where there are multiple employers,
the first employer shall pay, unless it is shown that the injury has arisen out of employment
with the second or subsequent employer. Liability for compensation under this chapter may
be denied by the employer or insurer by giving the employee written notice of the denial
of liability. If liability is denied for an injury which is required to be reported to the
commissioner under section 176.231, subdivision 1, the denial of liability must be filed
with the commissioner and served on the employee within 14 days after notice to or
knowledge by the employer of an injury which is alleged to be compensable under this
chapter. If the employer or insurer has commenced payment of compensation under this
subdivision but determines within deleted text begin 60 deleted text end new text begin 90 new text end days of notice to or knowledge by the employer
of the injury that the disability is not a result of a personal injury, payment of compensation
may be terminated upon the filing of a notice of denial of liability within deleted text begin 60 deleted text end new text begin 90 new text end days of
notice or knowledge. After the deleted text begin 60-day deleted text end new text begin 90-day new text end period, payment may be terminated only by
the filing of a notice as provided under section 176.239. Upon the termination, payments
made may be recovered by the employer if the commissioner or compensation judge finds
that the employee's claim of work related disability was not made in good faith. A notice
of denial of liability must state in detail the facts forming the basis for the denial and specific
reasons explaining why the claimed injury or occupational disease was determined not to
be within the scope and course of employment and shall include the name and telephone
number of the person making this determination.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for dates of injury on or after October
1, 2026.
new text end

Sec. 13.

Minnesota Statutes 2024, section 176.322, is amended to read:

176.322 DECISIONS BASED ON STIPULATED FACTS.

If the parties agree to a stipulated set of facts and only legal issues remain, the
new text begin commissioner or new text end compensation judge may determine the matter without a hearing based
upon the stipulated facts and the determination is appealable to the court of appeals pursuant
to sections 176.421 and 176.442. In any case where a stipulated set of facts has been
submitted new text begin to the Court of Administrative Hearings new text end pursuant to this section, upon receipt of
the file or the stipulated set of facts the chief administrative law judge shall immediately
assign the case to a compensation judge for a determination. The new text begin commissioner or
compensation new text end judge shall issue a determination within 60 days after receipt of the stipulated
facts.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 14. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2024, sections 79.34, subdivision 2a; 79.361; and 79.363, new text end new text begin are repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: H4598-1

79.34 CREATION OF REINSURANCE ASSOCIATION.

Subd. 2a.

Deficiency.

If the board determines that a distribution of excess surplus resulted in inadequate funds being available to pay claims that arose during the period upon which that distribution was calculated, the board shall determine the amount of the deficiency. The deficiency shall be made up by imposing an assessment rate against self-insured members and policyholders of insurer members. The board shall notify the commissioner of commerce of the amount of the deficiency and recommend an assessment rate. The commissioner shall order an assessment at a rate and for the time period necessary to eliminate the deficiency. The assessment rate shall be applied to the exposure base of self-insured employers and insured employers. The assessment may not be retroactive and applies only prospectively. The assessment may be spread over a period of time that will cause the least financial hardship to employers. All assessments under this subdivision are payable to the association. The commissioner may issue orders necessary to administer this section.

79.361 POST-1992 DISTRIBUTION OF WORKERS' COMPENSATION REINSURANCE ASSOCIATION SURPLUS.

Subdivision 1.

Scope.

This section governs the distribution of excess surplus of the Workers' Compensation Reinsurance Association declared after January 1, 1993. A distribution of excess surplus is declared on the date the board votes to make a distribution. No distribution of excess surplus other than that provided by this section may be made.

Subd. 2.

Self-insured.

A self-insurer shall receive a distribution of excess surplus in an amount equal to the self-insurer's share of the premiums paid to the Workers' Compensation Reinsurance Association for the period and for each retention layer for which the distribution is made.

Subd. 3.

Insured employers.

A policyholder, other than a policyholder insured by the assigned risk plan or the State Fund Mutual Insurance Company, shall receive a refund of a share of the distribution equal to the policyholder's share of the annual total earned Minnesota workers' compensation insurance premium, as reported to the commissioner of commerce in the most recent annual statements of insurers, including the assigned risk plan and the State Fund Mutual Insurance Company.

Subd. 4.

Assigned risk plan.

A policyholder of the assigned risk plan shall receive a refund of a share of the distribution equal to the policyholder's share of the annual total earned Minnesota workers' compensation insurance premium, as reported to the commissioner of commerce in the most recent annual statements of insurers, including the assigned risk plan and the State Fund Mutual Insurance Company.

Subd. 5.

State Fund Mutual Insurance Company.

A policyholder of the State Fund Mutual Insurance Company shall receive a refund of a share of the distribution equal to the policyholder's share of the annual total earned Minnesota workers' compensation insurance premium, as reported to the commissioner of commerce in the most recent annual statements of insurers, including the assigned risk plan and the state fund mutual insurance company.

Subd. 6.

Distribution defined.

For the purpose of subdivisions 3 to 5, "distribution" means a distribution described in subdivision 1 minus a distribution to self-insurers under subdivision 2.

Subd. 7.

Policyholder.

For the purpose of this section "policyholder" means a workers' compensation insurance policyholder in the calendar year preceding a declaration of excess surplus by the board of the reinsurance association.

Subd. 8.

Information required.

Insurers and the Workers' Compensation Insurers Rating Association of Minnesota must provide the Workers' Compensation Reinsurance Association with information necessary to administer and calculate the refunds to policyholders governed by this section within 60 days of a request by the association. For the purpose of this subdivision, "insurer" includes the assigned risk plan.

Subd. 9.

Refund due date.

Policyholders must receive the refund within 60 days of the day the reinsurance association receives the information required to be provided by subdivision 8.

Subd. 10.

Unclaimed refund.

Any part of the refund not distributed within one year after the due date of a refund under this section due to the inability to identify or locate policyholders remains with the Workers' Compensation Reinsurance Association.

Subd. 11.

Costs of distribution.

The reinsurance association may pay the actual and reasonable costs of the refunds made under this section from earnings on a declared excess surplus prior to its distribution.

79.363 DISTRIBUTION OF EXCESS SURPLUS.

The distribution of excess surplus of the Workers' Compensation Reinsurance Association is not a distribution of excess premiums to members. Any excess surplus not refunded according to Laws 1993, chapter 361, section 2, must be returned to the association and must not be distributed to its members. Any excess surplus not distributed or refunded according to section 79.361 must be retained by the association and must not be distributed to members.