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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1985 

                        CHAPTER 234-S.F.No. 986 
           An act relating to workers' compensation; excluding 
          certain injuries from coverage; providing the 
          conditions for organization of certain insurance 
          associations; providing for the workers' compensation 
          benefits; transferring certain duties from the 
          department of commerce to the department of labor and 
          industry; providing for miscellaneous changes; 
          amending Minnesota Statutes 1984, sections 66A.08, 
          subdivision 4; 79.37; 176.021, by adding subdivisions; 
          176.101, subdivisions 3e, 3i, and 3t; 176.102, 
          subdivisions 3 and 8; 176.103, subdivision 3; 176.136, 
          by adding a subdivision; 176.138; 176.191, 
          subdivisions 3 and 5; 176.511, subdivisions 1 and 2; 
          176.66, subdivision 10; and 352E.03; proposing coding 
          for new law in Minnesota Statutes, chapter 176; 
          repealing Minnesota Statutes 1984, sections 176.081, 
          subdivision 4; and 176.134. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1984, section 66A.08, 
subdivision 4, is amended to read: 
    Subd. 4.  [EMPLOYERS' LIABILITY AND WORKERS' COMPENSATION.] 
(1) [ORGANIZATION.] (a) [SUBSCRIBERS AND ARTICLES OF 
INCORPORATION.] Twenty or more persons may form an incorporated 
mutual employers' liability insurance association for the 
purpose of insuring themselves and such other persons, firms, or 
corporations as may become subscribers to the association 
against liability for compensation payable under the terms of 
the workers' compensation law and for the purpose of insuring 
against loss or damage by the sickness, bodily injury, or death 
by accident of any person employed by the insured or for whose 
injury or death the insured is responsible. 
    They shall subscribe and acknowledge a certificate 
specifying: 
    (aa) The name, general nature of its business, and the 
principal place of transacting the same; (such name shall 
distinguish it from all other corporations, domestic or foreign, 
authorized to do business in this state and end with "company," 
"corporation," "association," or the word "incorporated"); 
    (bb) The period of its duration; 
    (cc) The names and places of residence of the incorporators;
    (dd) In what board its management shall be vested and the 
names and addresses of those composing the board until the first 
election, a majority of whom shall always be residents of the 
state; 
     (ee) The highest amount of indebtedness or liability to 
which the corporation shall at any time be subject; and 
    (ff) The territory within which the association may do 
business. 
    It may contain any other lawful provisions defining and 
regulating the powers or business of the corporation, its 
officers, directors, trustees, and members. 
    The certificate of incorporation of every such corporation 
shall be submitted to the commissioner for his approval and, if 
he approves the same, one copy thereof shall be filed with the 
secretary of state and one copy with the commissioner.  
    (b) [BYLAWS AND SEAL.] Such association shall have the 
power to make bylaws for the government of its officers and the 
conduct of its affairs, to alter and amend the same, and to 
adopt a common seal. 
    (c) [ANNUAL MEETING; VOTING RIGHTS.] The annual meeting for 
the election of directors shall be held at such time in the 
month of January as the bylaws of the association may direct.  
Of the time and place of the meeting at least 30 days previous 
written or printed notice shall be given to the subscribers, or 
the notice may be given by publication, not less than three 
times, in at least two daily or weekly newspapers published in 
the city or county wherein the association has its principal 
office and in the legal periodical, if any, designated by the 
rules of court of the proper county for the publication of legal 
notices.  Subscribers who, during the preceding calendar year, 
have paid into the treasury of the association premiums 
amounting to more than one-half of the total premiums received 
by it during that year, shall constitute a quorum.  At this 
annual meeting the subscribers shall elect, by ballot, from 
their own number, not less than five directors, a majority of 
whom shall be residents of this state, to serve for at least one 
year and until their successors are duly chosen.  The 
association may provide in its bylaws for the division of its 
board of directors into two, three, or four classes, and for the 
election thereof at its annual meetings in such manner that the 
members of one class only shall retire and their successors be 
chosen each year.  Vacancies may be filled by election by the 
board until the next annual meeting.  In the choice of directors 
and in all meetings of the association, each subscriber shall be 
entitled to one vote for every $100, or any fraction thereof, 
paid by him in premiums into the treasury of the association 
during the preceding calendar year. Subscribers may vote by 
proxy and the record of all votes shall be made by the secretary 
and show whether the same were cast in person or by proxy and 
shall be evidence of all these elections.  Not less than three 
directors shall constitute a quorum.  The directors shall 
annually choose by ballot a president, who shall be a member of 
the board; a secretary; a treasurer, who may be either the 
president or secretary; and such other officers as the bylaws 
may provide; and fix the salaries of the president and the 
secretary, as well as the salaries or compensation of such other 
officers and agents as the bylaws prescribe. Vacancies in any 
office may be filled by the directors or by the subscribers, as 
the bylaws shall prescribe. 
     (2) [REQUIREMENTS.] (a) [NUMBER OF RISKS TO QUALIFY.] These 
associations shall not begin to issue policies until a list of 
subscribers with the number of employees of each which, in the 
aggregate, must number not less than 5,000, together with such 
other information as the commissioner may require, shall have 
been filed at the department of commerce, nor until the 
president and secretary of the association shall have certified 
under oath that every subscription in the list so filed is 
genuine and made with an agreement of all the subscribers that 
they will take the policies subscribed for within 30 days of the 
granting of a license by the commissioner.  In case of 
associations organized exclusively for the purpose of insuring 
creameries, cheese factories, and livestock shipping 
associations, these associations may begin to issue policies 
when the number of employees insured aggregates 300. 
     Upon the filing of the certificate provided for in this 
section, the commissioner shall make such investigations as he 
may deem proper and, if his findings warrant it, grant a license 
to the association to issue policies. 
     (b) [NUMBER OF RISKS REQUIRED TO CONTINUE IN BUSINESS.] If 
at any time the number of subscribers falls below 20, or the 
number of subscribers' employees within the state falls below 
5,000, no further policies shall be issued until the total 
number of subscribers amounts to not less than 20, whose 
employees within the state are not less than 5,000.  In case of 
associations organized for the purpose of insuring creameries, 
cheese factories, and livestock shipping associations, the 
number of subscribers must not fall below 200, nor the number of 
subscribers' employees within the state below 300. 
     (3) [ADDITIONAL POWERS.] (a) [MAY WRITE AUTOMOBILE 
INSURANCE.] Any such company authorized to write workers' 
compensation or liability insurance under this subdivision, when 
its articles of incorporation so provide, shall be permitted to 
insure against loss or damage to automobiles or other vehicles 
and their contents by collision, fire, burglary, or theft, and 
other perils of operation, and against liability for damage to 
persons or property of others by collision with such vehicles, 
and to insure against any loss or hazard incident to the 
ownership, operation, or use of motor or other vehicles, as 
specified in section 60A.06, subdivision 1, clause (12). 
     (b) [MAY WRITE GLASS INSURANCE.] Any company authorized to 
write workers' compensation or liability insurance under this 
subdivision when its articles of incorporation so provide shall 
be permitted to insure against loss or damage by breakage of 
glass located or in transit. 
     (c) [SPECIAL POWERS.] Any company organized under this 
subdivision which, for 15 years prior to the passage of Laws 
1935, Chapter 136, has exclusively insured creameries, cheese 
factories, and livestock shipping associations, and which has 
assets of $100,000 or more, may write public liability and 
compensation insurance coverage of creameries, cheese factories, 
shipping associations, farmers' elevators, cooperatively owned 
warehouses, cooperative filling stations, cooperative oil 
companies and all cooperatively owned or organized enterprises. 
     (4) [INTERNAL OPERATION.] (a) [POLICIES.] Policies of 
insurance issued by any such association may be made either with 
or without the seal thereof and they shall be signed by the 
president, or such other officers as may be designated by the 
directors for that purpose, and attested by the secretary. 
     (b) [CLASSIFICATION OF RISKS.] The board of directors may 
divide the subscribers into groups in accordance with the nature 
of their business and the probable risk of injury therein.  In 
such case they shall fix all premiums, make all assessments, and 
determine and pay all dividends by and for each group in 
accordance with the experience thereof, but all funds of the 
association and the contingent liability of all subscribers 
shall be available for the payment of any claim against the 
association; provided, that (as between the association and its 
subscribers) until the whole of the contingent liability of the 
members of any group shall be exhausted, the general funds of 
the association and the contingent liability of the members of 
other groups shall not be available for the payment of losses 
and expenses incurred by such group in excess of the earned 
premiums paid by the members thereof. 
     (c) [CLASSIFICATION TO BE FILED.] A statement of any 
proposed distribution of subscribers into groups shall be filed 
with the department of commerce. 
     (d) [RATES.] The board of directors shall determine the 
amount of premiums which the subscribers of the association 
shall pay for their insurance in accordance with the nature of 
the business in which the subscribers are engaged and the 
probable risk of injury to their employees under existing 
conditions, and it shall fix premiums at such amounts as in its 
judgment shall be sufficient to enable the association to pay to 
its subscribers all sums which may become due and payable to 
their employees under provisions of law and the expenses of 
conducting the business of the association.  In fixing the 
premium payable by any subscriber, the board of directors may 
take into account the condition of the plant, workroom, shop, 
farm, or premises of the subscriber in respect to the safety of 
those employed therein as shown by the report of any inspector 
appointed by the board and it may from time to time change the 
amount of premiums payable by any of the subscribers as 
circumstances may require and the condition of the plant, 
workroom, shop, farm, or premises of the subscribers in respect 
to the safety of their employees may justify and may increase 
the premiums of any subscriber neglecting to provide safety 
devices required by law, or disobeying the rules or regulations 
made by the board of directors in accordance with the provisions 
of clause (4) (g) of this subdivision. 
     (e) [PREMIUMS; CONTINGENT LIABILITY.] Every such company 
shall charge and collect on each policy a premium equal to one 
year's premium on the policy issued and state in the policy the 
estimated annual premium and provide in its bylaws for the 
determination of the actual premium and for the payment of same 
when determined.  The premium thus determined shall be known as 
the annual premium on the policy.  The company shall provide in 
its bylaws and specify in its policies the maximum contingent 
mutual liability of its members for the payment of losses and 
expenses not provided for by its cash fund.  The contingent 
liability of a member shall not be less than a sum equal and in 
addition to one annual premium, nor more than a sum equal to 
five times the amount of the annual premium or, in case of a 
policy written for less than one year, the contingent liability 
shall not be less than the proportionate fractional part of the 
annual premium, nor more than five times the proportionate 
fractional part of the annual premium.  The contingent liability 
of the policyholder shall be plainly and legibly stated in each 
policy as follows: "The maximum contingent liability of the 
policyholder under this policy shall be a sum equal to ..... 
annual premium (or premiums)." 
     (f) [ASSESSMENTS.] When the liabilities, including unearned 
premiums and such other reserves as are or may be required by 
law and the commissioner, are in excess of the admitted assets 
computed on the basis allowed for its annual statement, it shall 
make an assessment upon its policyholders based upon the amount 
of one annual premium as written in the policy and not to exceed 
the amount of five annual premiums. 
     If it becomes necessary to levy the assessment, as provided 
by this section, no policies shall be issued until the admitted 
assets of the association are in excess of its liabilities. 
     (g) [POWER OF BOARD OF DIRECTORS.] The board of directors 
shall be entitled to inspect the plant, workroom, shop, farm, or 
premises of any subscriber and for this purpose to appoint 
inspectors, who shall have free access to all such premises 
during regular working hours, and the board of directors shall 
likewise from time to time be entitled to examine by their 
auditor or other agent the books, records, and payrolls of any 
subscribers for the purpose of determining the amount of premium 
chargeable to the subscriber. 
     The board of directors shall make reasonable rules and 
regulations for the prevention of injuries upon the premises of 
subscribers; and may refuse to insure, or may terminate the 
insurance of, any subscriber who refuses to permit these 
examinations and disregards such rules or regulations, and 
forfeit all premiums previously paid by him, but the termination 
of the insurance of any subscriber shall not release him from 
liability for the payment of assessments then or thereafter made 
by the board of directors to make up deficiencies existing at 
the termination of his insurance. 
     (h) [INVESTMENTS.] The association shall invest and keep 
invested all its funds of every description, excepting such cash 
as may be required in the transaction of its business, in 
accordance with the laws of this state or relating to the 
investment of funds of domestic insurance companies. 
     No such association shall purchase, hold, or convey real 
estate except as provided by section 60A.11, subdivision 6. 
     (i) [WITHDRAWAL OF SUBSCRIBER.] Any subscriber of the 
association who has complied with all its rules and regulations 
may withdraw therefrom by written notice to that effect sent by 
the subscriber by certified mail to the association and this 
withdrawal shall become effective on the first day of the month 
immediately following the tenth day after the receipt of the 
notice, but the withdrawal shall not release the subscriber from 
liability for the payment of assessments thereafter made by the 
board of directors to make up deficiencies existing at the date 
of his withdrawal and the subscriber shall be entitled to his 
share of any dividends earned at the date of his withdrawal. 
     (5) [MISCELLANEOUS.] (a) [PERJURY BY OFFICER.] If any 
officer of the association shall falsely make oath to any 
certificate required to be filed with the commissioner, he shall 
be guilty of perjury. 
    (b) [FOREIGN MUTUAL EMPLOYERS' LIABILITY ASSOCIATION.] Any 
mutual employers' liability insurance association of another 
state, upon compliance with all laws governing such corporations 
in general and the provisions of this subdivision may be 
admitted to transact business in this state.  These associations 
shall pay to the department of commerce the fees prescribed by 
section 60A.14, subdivision 1. 
    (c) [WINDING UP AFFAIRS.] When the contracts of insurance 
issued by these associations shall cover in the aggregate less 
than 5,000 employees or, in the case of associations organized 
for the purpose of insuring creameries, cheese factories, and 
livestock shipping associations, less than 300 employees, the 
association shall forthwith notify the commissioner of that fact 
and if, at the expiration of six months from the notice, the 
aggregate number of employees covered by the contracts of 
insurance shall be less than 5,000, or, in the case of 
associations organized for the purpose of insuring creameries, 
cheese factories, and livestock shipping associations, less than 
300 employees, the commissioner shall proceed under the 
provisions of chapter 60B. 
    Sec. 2.  Minnesota Statutes 1984, section 79.37, is amended 
to read: 
    79.37 [BOARD OF DIRECTORS.] 
    A board of directors of the reinsurance association is 
created and is responsible for the operation of the reinsurance 
association consistent with the plan of operation and sections 
79.34 to 79.42.  The board consists of 13 directors.  Four 
directors shall represent insurers, six two directors shall 
represent employers, at least one, but not more than three of 
whom two shall represent self-insurers; and three two directors 
shall represent employees; the commissioner of finance and the 
executive director of the state board of investment or their 
designees shall serve as directors; and one director shall 
represent the public.  Insurer members of the reinsurance 
association shall elect the directors who represent insurers; 
self-insurer members of the reinsurance association shall elect 
the directors who represent self-insurers; and the commissioner 
of commerce labor and industry shall appoint the remaining 
directors who represent employers and employees for the terms 
authorized in the plan of operation.  Each director is entitled 
to one vote.  Terms of the directors shall be staggered so that 
the terms of all the directors do not expire at the same time 
and so that a director does not serve a term of more than four 
years.  The board shall select a chairman and other officers it 
deems appropriate. 
    A majority of the directors currently holding office 
constitutes a quorum.  Action may be taken by a majority vote of 
the directors present. 
    The board shall take reasonable and prudent action 
regarding the management of the reinsurance association 
including but not limited to determining the entity who shall 
manage the daily affairs of the reinsurance association.  The 
board shall report to the governor of its actions regarding the 
entity selected to manage the reinsurance association and the 
reasons for the selection. 
    Sec. 3.  Minnesota Statutes 1984, section 176.021, is 
amended by adding a subdivision to read: 
    Subd. 3b.  [TEMPORARY AND PERMANENT PARTIAL.] If an 
employee has returned to work for at least six months and has, 
if applicable, completed a rehabilitation plan, this section 
does not prevent the payment of compensation for permanent 
partial disability because the employee is receiving 
compensation for temporary partial disability.  This subdivision 
is procedural and applies regardless of the date of injury. 
    Sec. 4.  Minnesota Statutes 1984, section 176.021, is 
amended by adding a subdivision to read: 
    Subd. 9.  [EMPLOYER RESPONSIBILITY FOR WELLNESS 
PROGRAMS.] Injuries incurred while participating in voluntary 
recreational programs sponsored by the employer, including 
health promotion programs, athletic events, parties, and 
picnics, do not arise out of and in the course of the employment 
even though the employer pays some or all of the cost of the 
program.  This exclusion does not apply in the event that the 
injured employee was ordered or assigned by the employer to 
participate in the program. 
    Sec. 5.  Minnesota Statutes 1984, section 176.101, 
subdivision 3e, is amended to read: 
    Subd. 3e.  [END OF TEMPORARY TOTAL COMPENSATION.] (a) 90 
days after an employee has reached maximum medical improvement 
or 90 days after the end of an approved retraining program, 
whichever is later, the employee's temporary total compensation 
shall cease.  This cessation shall occur at an earlier date if 
otherwise provided by this chapter.  
    (b) If at any time prior to the end of the 90-day period 
described in clause (a) the employee retires or the employer 
furnishes work to the employee that is consistent with an 
approved plan of rehabilitation and meets the requirements of 
section 176.102, subdivision 1, or, if no plan has been 
approved, that the employee can do in his or her physical 
condition and that job produces an economic status as close as 
possible to that the employee would have enjoyed without the 
disability, or the employer procures this employment with 
another employer or the employee accepts this job with another 
employer, temporary total compensation shall cease and the 
employee shall, if appropriate, receive impairment compensation 
pursuant to subdivision 3b.  This impairment compensation is in 
lieu of economic recovery compensation under subdivision 3a, and 
the employee shall not receive both economic recovery 
compensation and impairment compensation.  Temporary total 
compensation and impairment compensation shall not be paid 
concurrently.  Once temporary total compensation ceases no 
further temporary total compensation is payable except as 
specifically provided by this section.  
     (c) Upon receipt of a written medical report indicating 
that the employee has reached maximum medical improvement, the 
employer or insurer shall serve a copy of the report upon the 
employee and shall file a copy with the division.  The beginning 
of the 90-day period shall commence on the day this report is 
served on the employee for the purpose of determining whether a 
job offer consistent with the requirements of this subdivision 
is made.  A job offer may be made before the employee reaches 
maximum medical improvement.  
         (d) The job which is offered or procured by the employer or 
accepted by the employee under clause (b) does not necessarily 
have to commence immediately but shall commence within a 
reasonable period after the end of the 90-day period described 
in clause (a).  Temporary total compensation shall not cease 
under this subdivision until the job commences.  
         (e) If the job offered under clause (a) is not the job the 
employee had at the time of injury it shall be offered in 
writing and shall state the nature of the job, the rate of pay, 
the physical requirements of the job, and any other information 
necessary to fully and completely inform the employee of the job 
duties and responsibilities.  
     The employee has 14 calendar days to accept or reject the 
job offer.  If the employee does not respond within this period 
it is deemed a refusal of the offer.  Where there is an 
administrative conference to determine suitability under section 
176.242, the period begins to run on the date of the 
commissioner's decision.  
         (f) Self-employment may be an appropriate job under this 
subdivision.  
     The commissioner shall monitor application of this 
subdivision and may adopt rules to assure its proper application.
    Sec. 6.  Minnesota Statutes 1984, section 176.101, 
subdivision 3i, is amended to read: 
    Subd. 3i.  [LAY OFF BECAUSE OF LACK OF WORK OR RELEASED FOR 
OTHER THAN SEASONAL CONDITIONS.] (a) If an employee accepts a 
job under subdivision 3e and begins work at that job and is 
subsequently unemployed at that job because of economic 
conditions, other than seasonal conditions, the employee shall 
receive monitoring period compensation pursuant to clause (b).  
In addition, the employer who was the employer at the time of 
the injury shall provide rehabilitation consultation by a 
qualified rehabilitation consultant if the employee remains 
unemployed for 45 calendar days.  The commissioner may waive 
this rehabilitation consultation if the commissioner deems it 
appropriate.  Further rehabilitation, if deemed appropriate, is 
governed by section 176.102.  
    (b) Upon the employee's initial return to work the 
monitoring period begins to run.  If the employee is unemployed 
for the reason in clause (a), prior to the end of the monitoring 
period the employee shall receive monitoring period 
compensation.  This compensation shall be paid for the lesser of 
until (1) the weeks remaining in the monitoring period expires, 
or (2) the weeks equal to the monitoring period minus the 
impairment compensation paid to the employee.  For purposes of 
this clause the impairment compensation shall be converted to 
weeks by dividing the impairment compensation received by the 
employee by the employee's compensation rate for temporary total 
disability at the time of the injury the sum of monitoring 
period compensation paid and impairment compensation paid or 
payable is equal to the amount of economic recovery compensation 
that would have been paid if that compensation were payable, 
whichever occurs first.  No monitoring period compensation is 
payable if the unemployment occurs after the expiration of the 
monitoring period.  Monitoring period compensation is payable at 
the same intervals and in at the same amount rate as when 
temporary total compensation ceased, provided that the minimum 
monitoring period compensation rate is 66-2/3 percent of the 
weekly wage for permanent partial disability as determined by 
section 176.011, subdivision 18 and subject to the maximums 
specified therein.  
    (c) Compensation under this subdivision shall not be 
escalated pursuant to section 176.645.  
    (d) If the employee returns to work and is still receiving 
monitoring period compensation, this compensation shall cease. 
Any period remaining in the monitoring period upon this return 
to work shall be used to determine further benefits if the 
employee is again unemployed under clause (a).  
    (e) Upon the employee's return to work pursuant to this 
section the insurer shall notify the employee of the length of 
the employee's monitoring period and shall notify the employee 
of the amount of impairment to be paid and the date of payment.  
    Sec. 7.  Minnesota Statutes 1984, section 176.101, 
subdivision 3t, is amended to read: 
    Subd. 3t.  [MINIMUM ECONOMIC RECOVERY COMPENSATION.] (a) 
Economic recovery compensation pursuant to this section shall be 
at least 120 percent of the impairment compensation the employee 
would receive if that compensation were payable to the 
employee.  The monitoring period shall be at least 120 percent 
of the weeks during which impairment compensation would be 
payable if paid weekly.  
    (b) Where an employee has suffered a personal injury for 
which temporary total compensation is payable but which produces 
no permanent partial disability and the employee is unable to 
return to his former employment for medical reasons attributable 
to the injury, the employee shall receive 26 weeks of economic 
recovery compensation.  This paragraph shall not be used to 
determine monitoring period compensation under subdivision 3i 
and shall not be a minimum for determining the amount of 
compensation when an employee has suffered a permanent partial 
disability. 
    Sec. 8.  Minnesota Statutes 1984, section 176.102, 
subdivision 3, is amended to read: 
    Subd. 3.  [REVIEW PANEL.] There is created a rehabilitation 
review panel composed of the commissioner or a designee, who 
shall serve as an ex officio member and two members each from 
employers, insurers, rehabilitation, and medicine, one member 
representing chiropractors, and four members representing 
labor.  The members shall be appointed by the commissioner and 
shall serve four-year terms which may be renewed.  Compensation 
for members shall be governed by section 15.0575.  The panel 
shall select a chairman.  The panel shall review and make a 
determination with respect to (a) appeals regarding eligibility 
for rehabilitation services, rehabilitation plans and 
rehabilitation benefits under subdivisions 9 and 11; (b) appeals 
on any other rehabilitation issue the commissioner determines 
under this section; and (c) appeals regarding fee disputes, 
penalties, discipline, certification approval or revocation of 
registration of qualified rehabilitation consultants and 
approved vendors.  The panel shall continuously study 
rehabilitation services and delivery and develop and recommend 
rehabilitation rules to the commissioner.  
    The commissioner may appoint alternates for one-year terms 
to serve as a member when a member is unavailable.  The number 
of alternates shall not exceed one labor member, one employer or 
insurer member, and one member representing medicine, 
chiropractic, or rehabilitation. 
    Sec. 9.  Minnesota Statutes 1984, section 176.102, 
subdivision 8, is amended to read: 
    Subd. 8.  [PLAN MODIFICATION.] Upon request to the 
commissioner by the employer, the insurer, or employee, or upon 
the commissioner's own request, the plan may be suspended, 
terminated or altered upon a showing of good cause, including:  
    (a) a physical impairment that does not allow the employee 
to pursue the rehabilitation plan;  
    (b) the employee's performance level indicates the plan 
will not be successfully completed;  
    (c) an employee does not cooperate with a plan;  
    (d) that the plan or its administration is substantially 
inadequate to achieve the rehabilitation plan objectives.  
    An employee may request a change in a rehabilitation plan 
once because the employee feels ill-suited for the type of work 
for which rehabilitation is being provided.  If the 
rehabilitation plan includes retraining, this request must be 
made within 90 days of the beginning of the retraining program.  
Any decision of the commissioner regarding a change in a plan 
may be appealed to the rehabilitation review panel within 30 
days of the decision.  
    Sec. 10.  Minnesota Statutes 1984, section 176.103, 
subdivision 3, is amended to read: 
    Subd. 3.  [MEDICAL SERVICES REVIEW BOARD; SELECTION; 
POWERS.] (a) There is created a medical services review board 
composed of the commissioner or the commissioner's designee as 
an ex officio member, two persons representing chiropractic, one 
person representing hospital administrators, and six physicians 
representing different specialties which the commissioner 
determines are the most frequently utilized by injured 
employees.  The board shall also have one person representing 
employees, one person representing employers or insurers, and 
one person representing the general public.  The members shall 
be appointed by the commissioner and shall be governed by 
section 15.0575.  Terms of the board's members may be renewed.  
The board shall appoint from among its clinical members a 
clinical advisory subcommittee on clinical quality and a 
clinical advisory subcommittee on clinical cost containment. 
Each subcommittee shall consist of at least three members one of 
whom shall be a member who is not a chiropractor or licensed 
physician.  
    The commissioner may appoint alternates for one-year terms 
to serve as a member when a member is unavailable.  The number 
of alternates shall not exceed one chiropractor, one hospital 
administrator, three physicians, one employee representative, 
one employer or insurer representative, and one representative 
of the general public. 
    The clinical quality subcommittee shall review clinical 
results for adequacy and recommend to the commissioner scales 
for disabilities and apportionment.  
    The clinical cost containment subcommittee shall review and 
recommend to the commissioner rates for individual clinical 
procedures and aggregate costs.  The subcommittees shall make 
regular reports to the board and the commissioner which shall 
evaluate the reports for the purpose of determining whether or 
not a particular health care provider continues to qualify for 
payment under chapter 176 or is subject to any other sanctions 
or penalties authorized under this section and to determine 
whether an employee has been off work longer than necessary.  
    In evaluating the clinical consequences of the services 
provided to an employee by a clinical health care provider, the 
board shall consider the following factors in the priority 
listed:  
    (1) the clinical effectiveness of the treatment;  
      (2) the clinical cost of the treatment; and 
      (3) the length of time of treatment.  
      In its consideration of these factors, the board shall 
utilize the information and recommendations developed by the 
subcommittees.  In addition, the board shall utilize any other 
data developed by the subcommittees pursuant to the duties 
assigned to the subcommittees under this section.  
      After making a determination, the board shall submit its 
recommendation in writing to the commissioner.  The board shall 
advise the commissioner on the adoption of rules regarding all 
aspects of medical care and services provided to injured 
employees.  
      (b) The board shall appoint three of its members to hear 
appeals from decisions of the commissioner regarding quality 
control and supervision of medical care; any other disputes 
regarding medical, surgical, and hospital care; decisions 
regarding the eligibility of medical providers to receive 
payments; or any other determinations of the commissioner 
pursuant to subdivision 2.  The three-member panel shall be 
composed of one member who does not represent a health care 
specialty, one member who represents the same specialty as the 
specialty at issue or, if the same specialty is not available, 
one member whose specialty is as close as possible considering 
the board's composition, and one member representing a different 
specialty.  The three-member panel shall conduct a hearing in 
the same manner, giving the same notice and following other 
procedures required of the rehabilitation review panel in 
section 176.102, subdivision 3a.  A majority vote of the 
three-member panel constitutes the decision of the full board. 
This decision may be appealed to the workers' compensation court 
of appeals.  
     (c) In any situation where a conflict of interest prevents 
the appointment of a full three-member panel or in any other 
situation where the commissioner deems it necessary to resolve a 
conflict of interest, the commissioner may appoint a temporary 
substitute board member to serve until the situation creating 
the conflict of interest has been resolved.  
     (d) The board may adopt rules of procedure.  The rules may 
be joint rules with the rehabilitation review panel.  
    Sec. 11.  Minnesota Statutes 1984, section 176.136, is 
amended by adding a subdivision to read: 
    Subd. 5.  [PERMANENT RULES.] Where permanent rules have 
been adopted to implement this section, the commissioner shall 
annually give notice in the State Register of the 75th 
percentile to meet the requirements of subdivision 1.  The 
notice shall be in lieu of the requirements of chapter 14 if the 
75th percentile for the service meets the requirements of 
paragraphs (a) to (e). 
    (a) The data base includes at least three different 
providers of the service. 
    (b) The data base contains at least 20 billings for the 
service. 
    (c) The standard deviation as a percentage of the mean of 
billings for the service is 50 percent or less. 
    (d) The means of the Blue Cross and Blue Shield data base 
and of the department of human services data base for the 
service are within 20 percent of each other. 
    (e) The data is taken from the data base of Blue Cross and 
Blue Shield or the department of human services. 
    Sec. 12.  Minnesota Statutes 1984, section 176.138, is 
amended to read: 
    176.138 [MEDICAL DATA; ACCESS.] 
    Notwithstanding any other state laws related to the privacy 
of medical data or any private agreements to the contrary, the 
release of medical data related to a current claim for 
compensation under this chapter to the employee, employer, or 
insurer who are parties to the claim, or to the department of 
labor and industry, shall not require prior approval of any 
party to the claim.  This section does not preclude the release 
of medical data under section 175.10 or 176.231, subdivision 9.  
Requests for pertinent data shall be made in writing to the 
person or organization that collected or currently possesses the 
data.  The data shall be provided by the collector or possessor 
within seven working days of receiving the request.  In all 
cases of a request for the data, except when it is the employee 
who is making the request, the employee shall be sent written 
notification of the request by the party requesting the data at 
the same time the request is made.  This data shall be treated 
as private data by the party who requests or receives the data 
and the employee or the employee's attorney shall be provided 
with a copy of all data requested by the requester.  
    Medical data which is not directly related to a current 
injury or disability shall not be released without prior 
authorization of the employee.  
    The commissioner may impose a penalty of up to $200 payable 
to the special compensation fund against a party who does not 
release the data in a timely manner.  A party who does not treat 
this data as private pursuant to this section is guilty of a 
misdemeanor.  This section applies only to written medical data 
which exists at the time the request is made.  
    Sec. 13.  Minnesota Statutes 1984, section 176.191, 
subdivision 3, is amended to read: 
    Subd. 3.  If a dispute exists as to whether an employee's 
injury is compensable under this chapter and the employee is 
otherwise covered by an insurer pursuant to chapters 62A, 62C 
and 62D, that insurer shall pay any medical costs incurred by 
the employee for the injury up to the limits of the applicable 
coverage and shall make any disability payments otherwise 
payable by that insurer in the absence of or in addition to 
workers' compensation liability.  If the injury is subsequently 
determined to be compensable pursuant to this chapter, the 
workers' compensation insurer shall be ordered to reimburse the 
insurer that made the payments for all payments made under this 
subdivision by the insurer, including interest at a rate of 12 
percent a year.  If a payment pursuant to this subdivision 
exceeds the reasonable value as permitted by sections 176.135 
and 176.136, the provider shall reimburse the workers' 
compensation insurer for all the excess as provided by rules 
promulgated by the commissioner. 
    Sec. 14.  Minnesota Statutes 1984, section 176.191, 
subdivision 5, is amended to read: 
    Subd. 5.  Where a dispute exists between an employer, 
insurer, the special compensation fund, the reopened case fund, 
or the workers' compensation reinsurance association, regarding 
benefits payable under this chapter, the dispute may be 
submitted with consent of all interested parties to binding 
arbitration pursuant to the rules of the American arbitration 
association.  The decision of the arbitrator shall be conclusive 
with respect to all issues presented except as provided in 
subdivisions 6 and 7.  Consent of the employee is not required 
for submission of a dispute to arbitration pursuant to this 
section and the employee is not bound by the results of the 
arbitration.  An arbitration award shall not be admissible in 
any other proceeding under this chapter.  Notice of the 
proceeding shall be given to the employee.  
    The employee, or any person with material information to 
the facts to be arbitrated, shall attend the arbitration 
proceeding if any party to the proceeding deems it necessary. 
Nothing said by an employee in connection with any arbitration 
proceeding may be used against the employee in any other 
proceeding under this chapter.  Reasonable expenses of meals, 
lost wages, and travel of the employee or witnesses in attending 
shall be reimbursed on a pro rata basis.  Arbitration costs 
shall be paid by the parties, except the employee, on a pro rata 
basis. 
    Sec. 15.  [176.2421] [RECOMMENCEMENT OF TEMPORARY TOTAL; 
CONFERENCE.] 
    Subdivision 1.  [WHEN RIGHT ACCRUES.] Following the receipt 
of temporary total compensation, an employee who has returned to 
work but is unable to continue working for at least 14 days 
because of medical reasons associated with the injury has a 
right to an administrative conference under this section to 
determine whether compensation shall be recommenced. 
    Subd. 2.  [WHEN HELD.] A request for an administrative 
conference under this section shall be made within ten calendar 
days after the employee ceased working.  The commissioner shall 
schedule an administrative conference within ten calendar days 
after receiving a timely request.  The conference shall be held 
in accordance with section 176.243, subdivision 4, and the 
provisions of section 176.243, subdivisions 5 to 7, are 
applicable. 
    Sec. 16.  Minnesota Statutes 1984, section 176.511, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PARTIES NOT AWARDED COSTS.] Except as 
provided otherwise by this chapter and specifically by this 
section, in appeals before the workers' compensation court of 
appeals or hearings before a compensation judge, the 
rehabilitation review panel, or the medical services review 
board costs shall not be awarded to either party. 
    Sec. 17.  Minnesota Statutes 1984, section 176.511, 
subdivision 2, is amended to read: 
    Subd. 2.  [DISBURSEMENTS, TAXATION.] The compensation 
judge, the commissioner on behalf of the rehabilitation review 
panel or the medical services review board or on appeals to the 
workers' compensation court of appeals, the workers' 
compensation court of appeals may award the prevailing party 
reimbursement for actual and necessary disbursements.  These 
disbursements shall be taxed upon five days written notice to 
adverse parties. 
    Sec. 18.  Minnesota Statutes 1984, section 176.66, 
subdivision 10, is amended to read: 
    Subd. 10.  [MULTIPLE EMPLOYERS OR INSURERS; LIABILITY.] The 
employer liable for the compensation for a personal injury under 
this chapter is the employer in whose employment the employee 
was last exposed in a significant way to the hazard of the 
occupational disease.  In the event that the employer who is 
liable for the compensation had multiple insurers during the 
employee's term of employment, the insurer who was on the risk 
during the employee's last significant exposure to the hazard of 
the occupational disease is the liable party.  If this last 
employer had coverage for workers' compensation liability from 
more than one insurer during the employment, the insurer on the 
risk during the last period during which the employee was last 
exposed to the hazard of the occupational disease shall pay 
benefits as provided under section 176.191, subdivision 1, 
whether or not this insurer was on risk during the last 
significant exposure.  The party making payments under this 
section shall be reimbursed by the party who is subsequently 
determined to be liable for the occupational disease, including 
interest at a rate of 12 percent a year.  For purposes of this 
section, a self-insured employer shall be considered to be an 
insurer and an employer.  Where there is a dispute as to which 
employer is liable under this section, the employer in whose 
employment the employee is last exposed to the hazard of the 
occupational disease shall pay benefits pursuant to section 
176.191, subdivision 1.  If this last employer had coverage for 
workers' compensation liability from more than one insurer 
during the employment the insurer on the risk during the last 
period during which the employee was last exposed to the hazard 
of the occupational disease shall pay benefits as provided under 
section 176.191, subdivision 1, whether or not this insurer was 
on risk during the last significant exposure.  The party making 
payments under this section shall be reimbursed by the party who 
is subsequently determined to be liable for the occupational 
disease, including interest at a rate of 12 percent a year.  For 
purposes of this section, a self-insured employer shall be 
considered to be an insurer and an employer. 
    Sec. 19.  Minnesota Statutes 1984, section 352E.03, is 
amended to read: 
    352E.03 [WORKERS' COMPENSATION COURT OF APPEALS COURTS.] 
    Eligibility to receive benefits as herein provided shall be 
determined by the workers' compensation court of appeals courts 
in the manner provided by chapter 176.  A decision of the 
workers' compensation court of appeals hereunder may be reviewed 
by the Minnesota supreme court in the same manner and subject to 
the same procedures governing all other appeals from the 
decisions of the workers' compensation court of appeals.  The 
time limitation for commencing an action under this chapter is 
determined by section 176.151, clause (2). 
    Sec. 20.  [TRANSFER OF POWER.] 
    The duties and responsibilities of the department of 
commerce under Minnesota Statutes 1984, sections 79.34 to 79.40, 
except section 79.34, subdivision 3, are hereby transferred to 
the department of labor and industry. 
    Sec. 21.  [INSTRUCTIONS TO THE REVISOR.] 
    The revisor of statutes shall substitute the term 
"commissioner of labor and industry" or "department of labor and 
industry" or similar terms as appropriate for the terms 
"commissioner of commerce" or "department of commerce" or 
similar terms wherever they appear in Minnesota Statutes, 
sections 79.34 to 79.40, except section 79.34, subdivision 3. 
    Sec. 22.  [REPEALER.] 
    Minnesota Statutes 1984, sections 176.081, subdivision 4; 
and 176.134, are repealed. 
    Sec. 23.  [EFFECTIVE DATE.] 
    Section 2 is effective on June 1, 1985.  Within 30 days 
thereafter, the insurer members of the reinsurance association 
shall elect directors to replace those whose terms expire within 
the next year; the self-insurer members of the association shall 
elect two directors to replace the present self-insurer 
representative and an employer representative whose term expires 
within the next year; the commissioner of labor and industry 
shall appoint a public director to replace an employer director 
whose term expires in 1986 and an employer director to replace 
an employer director whose term expires in 1986; the 
commissioner of finance, or the commissioner's designee, shall 
replace an employee director whose term expires within the next 
year; and the executive director of the state board of 
investment, or the executive director's designee, shall replace 
an employer representative whose term shall expire in 1987.  The 
remaining directors will be replaced as provided in section 2 as 
their terms expire. 
    Sections 20 and 21 are effective the day following final 
enactment. 
    Sec. 24.  [EFFECTIVE DATE.] 
    Sections 3, 5 to 14, 16 to 19, and 22 are effective the day 
after final enactment.  Section 15 is effective July 1, 1985. 
    Became law without the governor's signature May 24, 1985