Office of the Revisor of Statutes
Minnesota Session Laws - 1995, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 231-H.F.No. 642
An act relating to workers' compensation; modifying
provisions relating to insurance, procedures and
benefits; providing penalties; appropriating money;
amending Minnesota Statutes 1994, sections 13.69,
subdivision 1; 13.82, subdivision 1; 79.074,
subdivision 2; 79.085; 79.211, subdivision 1; 79.251,
subdivision 2, and by adding a subdivision; 79.253, by
adding a subdivision; 79.34, subdivision 2; 79.35;
79.50; 79.51, subdivisions 1 and 3; 79.52, by adding
subdivisions; 79.53, subdivision 1; 79.55,
subdivisions 2, 5, and by adding subdivisions; 79.56,
subdivisions 1 and 3; 79.60, subdivision 1; 79A.01,
subdivisions 1, 4, and by adding a subdivision;
79A.02, subdivisions 1, 2, and 4; 79A.03, by adding a
subdivision; 79A.04, subdivisions 2 and 9; 79A.09,
subdivision 4; 79A.15; 168.012, subdivision 1; 175.16;
176.011, subdivisions 16 and 25; 176.021, subdivisions
3 and 3a; 176.061, subdivision 10; 176.081,
subdivisions 1, 7, 7a, 9, and by adding a subdivision;
176.101, subdivisions 1, 2, 4, 5, 6, 8, and by adding
a subdivision; 176.102, subdivisions 3a and 11;
176.103, subdivisions 2 and 3; 176.104, subdivision 1;
176.105, subdivision 4; 176.106; 176.129, subdivisions
9 and 10; 176.130, subdivision 9; 176.135, subdivision
1; 176.1351, subdivisions 1 and 5; 176.136,
subdivisions 1a, 1b, and 2; 176.138; 176.139,
subdivision 2; 176.178; 176.179; 176.181, subdivisions
7 and 8; 176.182; 176.183, subdivisions 1 and 2;
176.185, subdivision 5a; 176.191, subdivisions 1, 5,
8, and by adding a subdivision; 176.194, subdivision
4; 176.215, by adding a subdivision; 176.221,
subdivisions 1, 3, 3a, 6a, and 7; 176.225,
subdivisions 1 and 5; 176.231, subdivision 10;
176.238, subdivisions 6 and 10; 176.261; 176.2615,
subdivision 7; 176.275, subdivision 1; 176.281;
176.285; 176.291; 176.305, subdivision 1a; 176.645;
176.66, subdivision 11; 176.82; 176.83, subdivision 5;
176.84, subdivision 2; and 268.08, subdivision 3; Laws
1994, chapter 625, article 5, section 7; proposing
coding for new law in Minnesota Statutes, chapters 79;
79A; 176; and 182; repealing Minnesota Statutes 1994,
sections 79.53, subdivision 2; 79.54; 79.56,
subdivision 2; 79.57; 79.58; 176.011, subdivision 26;
176.081, subdivisions 2, 5, and 8; 176.101,
subdivisions 3a, 3b, 3c, 3d, 3e, 3f, 3g, 3h, 3i, 3j,
3k, 3l, 3m, 3n, 3o, 3p, 3q, 3r, 3s, 3t, and 3u;
176.103, subdivision 2a; 176.132; 176.133; 176.191,
subdivision 2; 176.232; and 176.86; Laws 1990, chapter
521, section 4.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
Section 1. Minnesota Statutes 1994, section 79.50, is
amended to read:
79.50 [PURPOSES.]
The purposes of chapter 79 are to:
(a) Promote public welfare by regulating insurance rates so
that premiums are not excessive, inadequate, or unfairly
discriminatory;
(b) Promote quality and integrity in the databases used in
workers' compensation insurance ratemaking;
(c) Prohibit price fixing agreements and anticompetitive
behavior by insurers;
(d) Promote price competition and provide rates that are
responsive to competitive market conditions;
(e) Provide a means of establishment of proper rates if
competition is not effective;
(f) Define the function and scope of activities of data
service organizations;
(g) Provide for an orderly transition from regulated rates
to competitive market conditions; and
(h) (e) Encourage insurers to provide alternative
innovative methods whereby employers can meet the requirements
imposed by section 176.181.
Sec. 2. Minnesota Statutes 1994, section 79.51,
subdivision 1, is amended to read:
Subdivision 1. [ADOPTION; WHEN.] The commissioner shall
adopt rules to implement provisions of this chapter. The rules
shall be finally adopted after May 1, 1982. By January 15,
1982, the commissioner shall provide the legislature a
description and explanation of the intent and anticipated effect
of the rules on the various factors of the rating system.
Sec. 3. Minnesota Statutes 1994, section 79.51,
subdivision 3, is amended to read:
Subd. 3. [RULES; SUBJECT MATTER.] (a) The commissioner in
issuing rules shall consider:
(1) data reporting requirements, including types of data
reported, such as loss and expense data;
(2) experience rating plans;
(3) retrospective rating plans;
(4) general expenses and related expense provisions;
(5) minimum premiums;
(6) classification systems and assignment of risks to
classifications;
(7) loss development and trend factors;
(8) the workers' compensation reinsurance association;
(9) requiring substantial compliance with the rules
mandated by this section as a condition of workers' compensation
carrier licensure;
(10) imposing limitations on the functions of workers'
compensation data service organizations consistent with the
introduction of competition;
(11) the rules contained in the workers' compensation
rating manual adopted by the workers' compensation insurers
rating association or other licensed data service organizations;
and
(12) the supporting data and information required in
filings under section 79.56, including but not limited to, the
experience of the filing insurer and the extent to which the
filing insurer relies upon data service organization loss
information, descriptions of the actuarial and statistical
methods employed in setting rates, and the filing insurers
interpretation of any statistical data relied upon; and
(13) any other factors that the commissioner deems relevant
to achieve the purposes of this chapter.
(b) The rules shall provide for the following:
(1) competition in workers' compensation insurance rates in
such a way that the advantages of competition are introduced
with a minimum of employer hardship;
(2) adequate safeguards against excessive or discriminatory
rates in workers' compensation;
(3) (2) encouragement of workers' compensation insurance
rates which are as low as reasonably necessary, but shall make
provision against inadequate rates, insolvencies and unpaid
benefits;
(4) (3) assurances that employers are not unfairly
relegated to the assigned risk pool;
(5) (4) requiring all appropriate data and other
information from insurers for the purpose of issuing rules,
making legislative recommendations pursuant to this section and
monitoring the effectiveness of competition; and
(6) (5) preserving a framework for risk classification,
data collection, and other appropriate joint insurer
services where these will not impede the introduction of
competition in premium rates.
Sec. 4. Minnesota Statutes 1994, section 79.53,
subdivision 1, is amended to read:
Subdivision 1. [METHOD OF CALCULATION.] Each insurer shall
establish premiums to be paid by an employer according to its
filed rates and rating plan as follows:
Rates shall be applied to an exposure base to yield a base
premium which may be further modified increased or decreased up
to 25 percent by merit rating, premium discounts, and other
appropriate factors contained in the rating plan of an insurer
to produce premium if the increase or decrease is not unfairly
discriminatory. Nothing in this chapter shall be deemed to
prohibit the use of any premium, provided the premium is not
excessive, inadequate or unfairly discriminatory.
Sec. 5. Minnesota Statutes 1994, section 79.55,
subdivision 2, is amended to read:
Subd. 2. [EXCESSIVENESS.] No premium is excessive in a
competitive market. In the absence of a competitive market,
premiums Rates and rating plans are excessive if the expected
underwriting profit, together with expected income from invested
reserves for the market in question, that would accrue to an
insurer under the rates and rating plans would be unreasonably
high in relation to the risk undertaken by the insurer in
transacting the business. The burden is on the insurer to
establish that profit is not unreasonably high.
Sec. 6. Minnesota Statutes 1994, section 79.55,
subdivision 5, is amended to read:
Subd. 5. [DISCOUNTS PERMITTED.] An insurer may offer a
discount from scheduled credit or debit to a manual premium of
up to 25 percent if the premium otherwise complies with this
section. The commissioner shall not by rule, or otherwise,
prohibit a credit or discount from a manual premium solely
because it is greater than a certain fixed percentage of the
premium.
Sec. 7. Minnesota Statutes 1994, section 79.55, is amended
by adding a subdivision to read:
Subd. 6. [RATING FACTORS.] In determining whether a rate
filing complies with this section, separate consideration shall
be given to: (i) past and prospective loss experience within
this state and outside this state to the extent necessary to
develop credible rates; (ii) dividends, savings, or unabsorbed
premium deposits allowed or returned by insurers to their
policyholders, members, or subscribers; and (iii) a reasonable
allowance for expense and profit. An allowance for expense
shall be presumed reasonable if it reflects expenses that are
22.5 percent greater or less than the average expense for all
insurers writing workers' compensation insurance in this state.
An allowance for after-tax profit shall consider anticipated
investment income from premium receipts net of disbursements and
from allocated surplus, based on the current five-year United
States Treasury note yield and an assumed premium to surplus
ratio of 2.25 to one. The allowance for after-tax profit shall
be presumed reasonable if the corresponding return on equity
target is equal to or less than the sum of: (i) the current
yield on five-year United States Treasury securities; and (ii)
an appropriate equity risk premium that reflects the risks of
writing workers' compensation insurance. The risk premium shall
not be less than the average, since 1926, of the differences in
return between: (i) the annual return, including dividend
income, for the Standards and Poors 500 common stock index or
predecessor index for each year; and (ii) the five-year United
States Treasury note yield as of the start of the corresponding
year. Profit and expense allowances not presumed reasonable
under this subdivision, are reasonable if the circumstances of
an insurer, the market, or other factors justify them.
Sec. 8. Minnesota Statutes 1994, section 79.55, is amended
by adding a subdivision to read:
Subd. 7. [EXTERNAL FACTORS.] That portion of a rate or
rating plan related to assessments from the assigned risk plan,
reinsurance association, guarantee fund, special compensation
fund, agent commission, premium tax and any other state-mandated
surcharges shall not cause the rate or rating plan to be
considered excessive, inadequate, or unfairly discriminatory.
Sec. 9. Minnesota Statutes 1994, section 79.56,
subdivision 1, is amended to read:
Subdivision 1. [AFTER EFFECTIVE DATE PREFILING OF RATES.]
Each insurer shall file with the commissioner a complete copy of
its rates and rating plan, and all changes and amendments
thereto, within 15 days after their and such supporting data and
information that the commissioner may by rule require, at least
60 days prior to its effective dates date. An insurer need not
file a rating plan if it uses a rating plan filed by a data
service organization. If an insurer uses a rating plan of a
data service organization but deviates from it, then all
deviations must be filed by the insurer. The commissioner shall
advise an insurer within 30 days of the filing if its submission
is not accompanied with such supporting data and information
that the commissioner by rule may require. The commissioner may
extend the filing review period and effective date for an
additional 30 days if an insurer, after having been advised of
what supporting data and information is necessary to complete
its filing, does not provide such information within 15 days of
having been so notified. If any rate or rating plan filing or
amendment thereto is not disapproved by the commissioner within
the filing review period, the insurer may implement it. For the
period August 1, 1995 to December 31, 1995, the filing shall be
made at least 90 days prior to the effective date and the
department shall advise an insurer within 60 days of such filing
if the filing is insufficient under this section.
Sec. 10. Minnesota Statutes 1994, section 79.56,
subdivision 3, is amended to read:
Subd. 3. [PENALTIES.] Any insurer using a rate or a rating
plan which has not been filed shall be subject to a fine of up
to $100 for each day the failure to file continues. The
commissioner may, after a hearing on the record, find that the
failure is willful. A willful failure to meet filing
requirements shall be punishable by a fine of up to $500 for
each day during which a willful failure continues. These
penalties shall be in addition to any other penalties provided
by law. Notwithstanding this subdivision, an employer that
generates $500,000 in annual written workers' compensation
premium under the rates and rating plan of an insurer before the
application of any large deductible rating plans, may be written
by that insurer using rates or rating plans that are not subject
to disapproval but which have been filed. The $500,000
threshold shall be increased on January 1, 1996, and on each
January 1 thereafter by the percentage increase in the statewide
average weekly wage, to the nearest $1,000. The commissioner
shall advise insurers licensed to write workers' compensation
insurance in this state of the annual threshold adjustment.
Sec. 11. [79.561] [DISAPPROVAL OF RATES OR RATING PLANS.]
Subdivision 1. [DISAPPROVAL; TIME PERIOD.] The
commissioner may disapprove a rate and rating plan or amendment
thereto prior to its effective date, as provided under section
79.56, subdivision 1, if the commissioner determines that it is
excessive, inadequate, or unfairly discriminatory. If the
commissioner disapproves any rate or rating plan filing or
amendment thereto, the commissioner shall advise the filing
insurer what rate and rating plan the commissioner has reason to
believe would be in compliance with section 79.55, and the
reasons for that determination. An insurer may not implement a
rate and rating plan or amendment thereto which has been
disapproved under this subdivision. If the commissioner
disapproves any rate and rating plan filing or amendment
thereto, an insurer may use its current rate and rating plan for
writing any workers' compensation insurance in this state.
Following any disapproval, the commissioner and insurer may
reach agreement on a rate or rating plan filing or amendment
thereto. Notwithstanding any law to the contrary, in such
cases, the rate or rating plan filing or amendment thereto may
be implemented by the insurer immediately.
Subd. 2. [HEARING.] If an insurer's rate or rating plan
filing or amendment thereto is disapproved under subdivision 1,
the insurer may request a contested case hearing under chapter
14. The insurer shall have the burden of proof to justify that
its rate and rating plan or amendment thereto is in compliance
with section 79.55. The hearing must be scheduled promptly and
in no case later than three months from the date of disapproval
or else the rate and rating plan or amendment thereto shall be
considered effective and may be implemented by the insurer. A
determination pursuant to chapter 14 must be made within 90 days
following the closing of the hearing record.
Subd. 3. [CONSULTANTS AND COSTS.] The commissioner may
retain consultants, including a consulting actuary or other
experts, that the commissioner determines necessary for purposes
of this chapter. The salary limit set by section 43A.17 does
not apply to a consulting actuary retained under this
subdivision. A consulting actuary shall be a fellow in the
casualty actuarial society and shall have demonstrated
experience in workers' compensation insurance ratemaking. Any
individual not so qualified shall not render an opinion or
testify on actuarial aspects of a filing, including but not
limited to, data quality, loss development, and trending. The
costs incurred in retaining any consulting actuaries and experts
shall be reimbursed by the special compensation fund.
Sec. 12. Minnesota Statutes 1994, section 175.16, is
amended to read:
175.16 [DIVISIONS.]
Subdivision 1. [ESTABLISHED.] The department of labor and
industry shall consist of the following divisions: division of
workers' compensation, division of boiler inspection, division
of occupational safety and health, division of statistics,
division of steamfitting standards, division of voluntary
apprenticeship, division of labor standards, and such other
divisions as the commissioner of the department of labor and
industry may deem necessary and establish. Each division of the
department and persons in charge thereof shall be subject to the
supervision of the commissioner of the department of labor and
industry and, in addition to such duties as are or may be
imposed on them by statute, shall perform such other duties as
may be assigned to them by said commissioner.
Subd. 2. [FRAUD INVESTIGATION UNIT.] The department of
labor and industry shall contain a fraud investigation unit for
the purposes of investigating fraudulent or other illegal
practices of health care providers, employers, insurers,
attorneys, employees, and others related to workers'
compensation and to investigate other matters under the
jurisdiction of the department.
An investigator of the fraud investigation unit of the
department of labor and industry has the inspection authority of
the commissioner provided under section 182.659 and may apply
this authority to subjects of investigations under this
subdivision.
Sec. 13. Minnesota Statutes 1994, section 176.011,
subdivision 25, is amended to read:
Subd. 25. [MAXIMUM MEDICAL IMPROVEMENT.] "Maximum medical
improvement" means the date after which no further significant
recovery from or significant lasting improvement to a personal
injury can reasonably be anticipated, based upon reasonable
medical probability., irrespective and regardless of subjective
complaints of pain. Except where an employee is medically
unable to continue working under section 176.101, subdivision 1,
paragraph (e), clause (2), once the date of maximum medical
improvement has been determined, no further determinations of
other dates of maximum medical improvement for that personal
injury is permitted. The determination that an employee has
reached maximum medical improvement shall not be rendered
ineffective by the worsening of the employee's medical condition
and recovery therefrom.
Sec. 14. Minnesota Statutes 1994, section 176.021,
subdivision 3, is amended to read:
Subd. 3. [COMPENSATION, COMMENCEMENT OF PAYMENT.] All
employers shall commence payment of compensation at the time and
in the manner prescribed by this chapter without the necessity
of any agreement or any order of the division. Except for
medical, burial, and other nonperiodic benefits, payments shall
be made as nearly as possible at the intervals when the wage was
payable, provided, however, that payments for permanent partial
disability shall be governed by section 176.101. If doubt
exists as to the eventual permanent partial disability, payment
for the economic recovery compensation or impairment
compensation, whichever is due, pursuant to section 176.101,
shall be then made when due for the minimum permanent partial
disability ascertainable, and further payment shall be made upon
any later ascertainment of greater permanent partial
disability. Prior to or at the time of commencement of the
payment of economic recovery compensation or lump sum or
periodic payment of impairment permanent partial compensation,
the employee and employer shall be furnished with a copy of the
medical report upon which the payment is based and all other
medical reports which the insurer has that indicate a permanent
partial disability rating, together with a statement by the
insurer as to whether the tendered payment is for minimum
permanent partial disability or final and eventual disability.
After receipt of all reports available to the insurer that
indicate a permanent partial disability rating, the employee
shall make available or permit the insurer to obtain any medical
report that the employee has or has knowledge of that contains a
permanent partial disability rating which the insurer does not
already have. Economic recovery compensation or impairment
Permanent partial compensation pursuant to section 176.101 is
payable in addition to but not concurrently with compensation
for temporary total disability but is payable pursuant to
section 176.101. Impairment compensation is payable
concurrently and in addition to compensation for permanent total
disability pursuant to section 176.101. Economic recovery
compensation or impairment compensation Permanent partial
compensation pursuant to section 176.101 shall be withheld
pending completion of payment for temporary total disability,
and no credit shall be taken for payment of economic recovery
compensation or impairment permanent partial compensation
against liability for temporary total or future permanent total
disability. Liability on the part of an employer or the insurer
for disability of a temporary total, temporary partial, and
permanent total nature shall be considered as a continuing
product and part of the employee's inability to earn or
reduction in earning capacity due to injury or occupational
disease and compensation is payable accordingly, subject to
section 176.101. Economic recovery compensation or
impairment Permanent partial compensation is payable for
functional loss of use or impairment of function, permanent in
nature, and payment therefore shall be separate, distinct, and
in addition to payment for any other compensation, subject to
section 176.101. The right to receive temporary total,
temporary partial, or permanent total disability payments vests
in the injured employee or the employee's dependents under this
chapter or, if none, in the employee's legal heirs at the time
the disability can be ascertained and the right is not abrogated
by the employee's death prior to the making of the payment.
The right to receive economic recovery permanent partial
compensation or impairment compensation vests in an injured
employee at the time the disability can be ascertained provided
that the employee lives for at least 30 days beyond the date of
the injury. Upon the death of an employee who is receiving
economic recovery compensation or impairment compensation,
further compensation is payable pursuant to section 176.101.
Impairment compensation is payable under this paragraph if
vesting has occurred, the employee dies prior to reaching
maximum medical improvement, and the requirements and conditions
under section 176.101, subdivision 3e, are not met.
Disability ratings for permanent partial disability shall
be based on objective medical evidence.
Sec. 15. Minnesota Statutes 1994, section 176.021,
subdivision 3a, is amended to read:
Subd. 3a. [PERMANENT PARTIAL BENEFITS, PAYMENT.] Payments
for permanent partial disability as provided in section 176.101,
subdivision 3 2a, shall be made in the following manner:
(a) If the employee returns to work, payment shall be made
by lump sum at the same intervals as temporary total payments
were made;
(b) If temporary total payments have ceased, but the
employee has not returned to work, payment shall be made at the
same intervals as temporary total payments were made;
(c) If temporary total disability payments cease because
the employee is receiving payments for permanent total
disability or because the employee is retiring or has retired
from the work force, then payment shall be made by lump sum at
the same intervals as temporary total payments were made;
(d) If the employee completes a rehabilitation plan
pursuant to section 176.102, but the employer does not furnish
the employee with work the employee can do in a permanently
partially disabled condition, and the employee is unable to
procure such work with another employer, then payment shall be
made by lump sum at the same intervals as temporary total
payments were made.
Sec. 16. Minnesota Statutes 1994, section 176.061,
subdivision 10, is amended to read:
Subd. 10. [INDEMNITY.] Notwithstanding the provisions of
chapter 65B or any other law to the contrary, an employer has a
right of indemnity for any compensation paid or payable pursuant
to this chapter, including temporary total compensation,
temporary partial compensation, permanent partial disability,
economic recovery compensation, impairment compensation, medical
compensation, rehabilitation, death, and permanent total
compensation.
Sec. 17. Minnesota Statutes 1994, section 176.101,
subdivision 1, is amended to read:
Subdivision 1. [TEMPORARY TOTAL DISABILITY.] (a) For
injury producing temporary total disability, the compensation is
66-2/3 percent of the weekly wage at the time of injury.
(b) During the year (1) Commencing on October 1, 1992
1995, and each year thereafter, the maximum weekly compensation
payable is 105 percent of the statewide average weekly wage for
the period ending December 31 of the preceding year $615 per
week.
(2) The workers' compensation advisory council may consider
adjustment increases and make recommendations to the legislature.
(c) The minimum weekly compensation payable is 20 percent
of the statewide average weekly wage for the period ending
December 31 of the preceding year $104 per week or the injured
employee's actual weekly wage, whichever is less.
(d) Subject to subdivisions 3a to 3u this Temporary total
compensation shall be paid during the period of disability,
payment to be made at the intervals when the wage was payable,
as nearly as may be subject to the cessation and recommencement
conditions in paragraphs (e) to (l).
(e) Temporary total disability compensation shall cease
when the employee returns to work. Except as otherwise provided
in section 176.102, subdivision 11, temporary total disability
compensation may only be recommenced following cessation under
this paragraph, paragraph (h), or paragraph (j) prior to payment
of 104 weeks of temporary total disability compensation and only
as follows:
(1) if temporary total disability compensation ceased
because the employee returned to work, it may be recommenced if
the employee is laid off or terminated for reasons other than
misconduct within one year after returning to work if the layoff
or termination occurs prior to 90 days after the employee has
reached maximum medical improvement. Recommenced temporary
total disability compensation under this clause ceases when any
of the cessation events in paragraphs (e) to (l) occurs; or
(2) if temporary total disability compensation ceased
because the employee returned to work or ceased under paragraph
(h) or (j), it may be recommenced if the employee is medically
unable to continue at a job due to the injury. Where the
employee is medically unable to continue working due to the
injury, temporary total disability compensation may continue
until any of the cessation events in paragraphs (e) to (l)
occurs following recommencement. If an employee who has not yet
received temporary total disability compensation becomes
medically unable to continue working due to the injury after
reaching maximum medical improvement, temporary total disability
compensation shall commence and shall continue until any of the
events in paragraphs (e) to (l) occurs following commencement.
For purposes of commencement or recommencement under this clause
only, a new period of maximum medical improvement under
paragraph (j) begins when the employee becomes medically unable
to continue working due to the injury. Temporary total
disability compensation may not be recommenced under this clause
and a new period of maximum medical improvement does not begin
if the employee is not actively employed when the employee
becomes medically unable to work. All periods of initial and
recommenced temporary total disability compensation are included
in the 104-week limitation specified in paragraph (k).
(f) Temporary total disability compensation shall cease if
the employee withdraws from the labor market. Temporary total
disability compensation may be recommenced following cessation
under this paragraph only if the employee reenters the labor
market prior to 90 days after the employee reached maximum
medical improvement and prior to payment of 104 weeks of
temporary total disability compensation. Once recommenced,
temporary total disability ceases when any of the cessation
events in paragraphs (e) to (l) occurs.
(g) Temporary total disability compensation shall cease if
the total disability ends and the employee fails to diligently
search for appropriate work within the employee's physical
restrictions. Temporary total disability compensation may be
recommenced following cessation under this paragraph only if the
employee begins diligently searching for appropriate work within
the employee's physical restrictions prior to 90 days after
maximum medical improvement and prior to payment of 104 weeks of
temporary total disability compensation. Once recommenced,
temporary total disability compensation ceases when any of the
cessation events in paragraphs (e) to (l) occurs.
(h) Temporary total disability compensation shall cease if
the employee has been released to work without any physical
restrictions caused by the work injury.
(i) Temporary total disability compensation shall cease if
the employee refuses an offer of work that is consistent with a
plan of rehabilitation filed with the commissioner which meets
the requirements of section 176.102, subdivision 4, or, if no
plan has been filed, the employee refuses an offer of gainful
employment that the employee can do in the employee's physical
condition. Once temporary total disability compensation has
ceased under this paragraph, it may not be recommenced.
(j) Temporary total disability compensation shall cease 90
days after the employee has reached maximum medical improvement,
except as provided in section 176.102, subdivision 11, paragraph
(b). For purposes of this subdivision, the 90-day period after
maximum medical improvement commences on the earlier of: (1)
the date that the employee receives a written medical report
indicating that the employee has reached maximum medical
improvement; or (2) the date that the employer or insurer serves
the report on the employee and the employee's attorney, if any.
Once temporary total disability compensation has ceased under
this paragraph, it may not be recommenced except if the employee
returns to work and is subsequently medically unable to continue
working as provided in paragraph (e), clause (2).
(k) Temporary total disability compensation shall cease
entirely when 104 weeks of temporary total disability
compensation have been paid, except as provided in section
176.102, subdivision 11, paragraph (b). Notwithstanding
anything in this section to the contrary, initial and
recommenced temporary total disability compensation combined
shall not be paid for more than 104 weeks, regardless of the
number of weeks that have elapsed since the injury, except that
if the employee is in a retraining plan approved under section
176.102, subdivision 11, the 104 week limitation shall not apply
during the retraining, but is subject to the limitation before
the plan begins and after the plan ends.
(l) Paragraphs (e) to (k) do not limit other grounds under
law to suspend or discontinue temporary total disability
compensation provided under chapter 176.
Sec. 18. Minnesota Statutes 1994, section 176.101,
subdivision 2, is amended to read:
Subd. 2. [TEMPORARY PARTIAL DISABILITY.] (a) In all cases
of temporary partial disability the compensation shall be 66-2/3
percent of the difference between the weekly wage of the
employee at the time of injury and the wage the employee is able
to earn in the employee's partially disabled condition. This
compensation shall be paid during the period of disability
except as provided in this section, payment to be made at the
intervals when the wage was payable, as nearly as may be, and
subject to the maximum rate for temporary total compensation.
(b) Except as provided under subdivision 3k, Temporary
partial compensation may be paid only while the employee is
employed, earning less than the employee's weekly wage at the
time of the injury, and the reduced wage the employee is able to
earn in the employee's partially disabled condition is due to
the injury. Except as provided in section 176.102, subdivision
11, paragraph paragraphs (b) and (c), temporary partial
compensation may not be paid for more than 225 weeks, or after
450 weeks after the date of injury, whichever occurs first.
(c) Temporary partial compensation must be reduced to the
extent that the wage the employee is able to earn in the
employee's partially disabled condition plus the temporary
partial disability payment otherwise payable under this
subdivision exceeds 500 percent of the statewide average weekly
wage.
Sec. 19. Minnesota Statutes 1994, section 176.101, is
amended by adding a subdivision 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. The percentage
determined pursuant to the rules must be multiplied by the
corresponding amount in the following table:
Impairment rating Amount
(percent)
0-25 $ 75,000
26-30 80,000
31-35 85,000
36-40 90,000
41-45 95,000
46-50 100,000
51-55 120,000
56-60 140,000
61-65 160,000
66-70 180,000
71-75 200,000
76-80 240,000
81-85 280,000
86-90 320,000
91-95 360,000
96-100 400,000
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.
(b) Permanent partial disability is payable upon cessation
of temporary total disability under subdivision 1. 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.
Sec. 20. Minnesota Statutes 1994, section 176.101,
subdivision 4, is amended to read:
Subd. 4. [PERMANENT TOTAL DISABILITY.] For permanent total
disability, as defined in subdivision 5, the compensation shall
be 66-2/3 percent of the daily wage at the time of the injury,
subject to a maximum weekly compensation equal to the maximum
weekly compensation for a temporary total disability and a
minimum weekly compensation equal to the minimum weekly
compensation for a temporary total disability 65 percent of the
statewide average weekly wage. This compensation shall be paid
during the permanent total disability of the injured employee
but after a total of $25,000 of weekly compensation has been
paid, the amount of the weekly compensation benefits being paid
by the employer shall be reduced by the amount of any disability
benefits being paid by any government disability benefit program
if the disability benefits are occasioned by the same injury or
injuries which give rise to payments under this subdivision.
This reduction shall also apply to any old age and survivor
insurance benefits. Payments shall be made at the intervals
when the wage was payable, as nearly as may be. In case an
employee who is permanently and totally disabled becomes an
inmate of a public institution, no compensation shall be payable
during the period of confinement in the institution, unless
there is wholly dependent on the employee for support some
person named in section 176.111, subdivision 1, 2 or 3, in which
case the compensation provided for in section 176.111, during
the period of confinement, shall be paid for the benefit of the
dependent person during dependency. The dependency of this
person shall be determined as though the employee were deceased.
Permanent total disability shall cease at age 67 because the
employee is presumed retired from the labor market. This
presumption is rebuttable by the employee. The subjective
statement the employee is not retired is not sufficient in
itself to rebut the presumptive evidence of retirement but may
be considered along with other evidence.
Sec. 21. Minnesota Statutes 1994, section 176.101,
subdivision 5, is amended to read:
Subd. 5. [DEFINITION.] (a) For purposes of subdivision 4,
permanent total disability means only:
(1) the total and permanent loss of the sight of both eyes,
the loss of both arms at the shoulder, the loss of both legs so
close to the hips that no effective artificial members can be
used, complete and permanent paralysis, total and permanent loss
of mental faculties; or
(2) any other injury which totally and permanently
incapacitates the employee from working at an occupation which
brings the employee an income., provided that the employee must
also meet the criteria of one of the following clauses:
(a) the employee has at least a 17 percent permanent
partial disability rating of the whole body;
(b) the employee has a permanent partial disability rating
of the whole body of at least 15 percent and the employee is at
least 50 years old at the time of injury; or
(c) the employee has a permanent partial disability rating
of the whole body of at least 13 percent and the employee is at
least 55 years old at the time of the injury, and has not
completed grade 12 or obtained a GED certificate.
For purposes of this clause, "totally and permanently
incapacitated" means that the employee's physical disability in
combination with any one of clauses (a), (b), or (c) causes the
employee to be unable to secure anything more than sporadic
employment resulting in an insubstantial income. Other factors
not specified in clause (a), (b), or (c), including the
employee's age, education, training and experience, may only be
considered in determining whether an employee is totally and
permanently incapacitated after the employee meets the threshold
criteria of clause (a), (b), or (c). The employee's age, level
of physical disability, or education may not be considered to
the extent the factor is inconsistent with the disability, age,
and education factors specified in clause (a), (b), or (c).
(b) For purposes of paragraph (a), clause (2), "totally and
permanently incapacitated" means that the employee's physical
disability, in combination with the employee's age, education,
training, and experience, causes the employee to be unable to
secure anything more than sporadic employment resulting in an
insubstantial income.
Sec. 22. Minnesota Statutes 1994, section 176.101,
subdivision 6, is amended to read:
Subd. 6. [MINORS; APPRENTICES.] (a) If any employee
entitled to the benefits of this chapter is an apprentice of any
age and sustains a personal injury arising out of and in the
course of employment resulting in permanent total or a
compensable permanent partial disability, for the purpose of
computing the compensation to which the employee is entitled for
the injury, the compensation rate for temporary total, temporary
partial, a or permanent total disability or economic recovery
compensation shall be the maximum rate for temporary total
disability under subdivision 1.
(b) If any employee entitled to the benefits of this
chapter is a minor and sustains a personal injury arising out of
and in the course of employment resulting in permanent total
disability, for the purpose of computing the compensation to
which the employee is entitled for the injury, the compensation
rate for a permanent total disability shall be the maximum rate
for temporary total disability under subdivision 1.
Sec. 23. Minnesota Statutes 1994, section 176.101,
subdivision 8, is amended to read:
Subd. 8. [RETIREMENT CESSATION OF BENEFITS.] Temporary
total disability payments shall cease at retirement.
"Retirement" means that a preponderance of the evidence supports
a conclusion that an employee has retired. The subjective
statement of an employee that the employee is not retired is not
sufficient in itself to rebut objective evidence of retirement
but may be considered along with other evidence.
For injuries occurring after January 1, 1984, an employee
who receives social security old age and survivors insurance
retirement benefits under the Social Security Act, Public Law
Number 98-21, as amended, is presumed retired from the labor
market. This presumption is rebuttable by a preponderance of
the evidence.
Sec. 24. Minnesota Statutes 1994, section 176.105,
subdivision 4, is amended to read:
Subd. 4. [LEGISLATIVE INTENT; RULES; LOSS OF MORE THAN ONE
BODY PART.] (a) For the purpose of establishing a disability
schedule pursuant to clause (b), the legislature declares its
intent that the commissioner establish a disability schedule
which, assuming the same number and distribution of severity of
injuries, the aggregate total of impairment compensation and
economic recovery compensation benefits under section 176.101,
subdivisions 3a to 3u be approximately equal to the total
aggregate amount payable for permanent partial disabilities
under section 176.101, subdivision 3, provided, however, that
awards for specific injuries under the proposed schedule need
not be the same as they were for the same injuries under the
schedule pursuant to section 176.101, subdivision 3. The
schedule shall be determined by sound actuarial evaluation and
shall be based on the benefit level which exists on January 1,
1983.
(b) The commissioner shall by rulemaking adopt procedures
setting forth rules for the evaluation and rating of functional
disability and the schedule for permanent partial disability and
to determine the percentage of loss of function of a part of the
body based on the body as a whole, including internal organs,
described in section 176.101, subdivision 3, and any other body
part not listed in section 176.101, subdivision 3, which the
commissioner deems appropriate.
The rules shall promote objectivity and consistency in the
evaluation of permanent functional impairment due to personal
injury and in the assignment of a numerical rating to the
functional impairment.
Prior to adoption of rules the commissioner shall conduct
an analysis of the current permanent partial disability schedule
for the purpose of determining the number and distribution of
permanent partial disabilities and the average compensation for
various permanent partial disabilities. The commissioner shall
consider setting the compensation under the proposed schedule
for the most serious conditions higher in comparison to the
current schedule and shall consider decreasing awards for minor
conditions in comparison to the current schedule.
The commissioner may consider, among other factors, and
shall not be limited to the following factors in developing
rules for the evaluation and rating of functional disability and
the schedule for permanent partial disability benefits:
(1) the workability and simplicity of the procedures with
respect to the evaluation of functional disability;
(2) the consistency of the procedures with accepted medical
standards;
(3) rules, guidelines, and schedules that exist in other
states that are related to the evaluation of permanent partial
disability or to a schedule of benefits for functional
disability provided that the commissioner is not bound by the
degree of disability in these sources but shall adjust the
relative degree of disability to conform to the expressed intent
of clause (a) this section;
(4) rules, guidelines, and schedules that have been
developed by associations of health care providers or
organizations provided that the commissioner is not bound by the
degree of disability in these sources but shall adjust the
relative degree of disability to conform to the expressed intent
of clause (a) this section;
(5) the effect the rules may have on reducing litigation;
(6) the treatment of preexisting disabilities with respect
to the evaluation of permanent functional disability provided
that any preexisting disabilities must be objectively determined
by medical evidence; and
(7) symptomatology and loss of function and use of the
injured member.
The factors in paragraphs (1) to (7) shall not be used in
any individual or specific workers' compensation claim under
this chapter but shall be used only in the adoption of rules
pursuant to this section.
Nothing listed in paragraphs (1) to (7) shall be used to
dispute or challenge a disability rating given to a part of the
body so long as the whole schedule conforms with the expressed
intent of clause (a) this section.
(c) If an employee suffers a permanent functional
disability of more than one body part due to a personal injury
incurred in a single occurrence, the percent of the whole body
which is permanently partially disabled shall be determined by
the following formula so as to ensure that the percentage for
all functional disability combined does not exceed the total for
the whole body:
A + B (1 - A)
where: A is the greater percentage whole body loss of the
first body part; and B is the lesser percentage whole body loss
otherwise payable for the second body part. A + B (1-A) is
equivalent to A + B - AB.
For permanent partial disabilities to three body parts due
to a single occurrence or as the result of an occupational
disease, the above formula shall be applied, providing that A
equals the result obtained from application of the formula to
the first two body parts and B equals the percentage for the
third body part. For permanent partial disability to four or
more body parts incurred as described above, A equals the result
obtained from the prior application of the formula, and B equals
the percentage for the fourth body part or more in arithmetic
progressions.
Sec. 25. Minnesota Statutes 1994, section 176.178, is
amended to read:
176.178 [FRAUD.]
Subdivision 1. [INTENT.] Any person who, with intent to
defraud, receives workers' compensation benefits to which the
person is not entitled by knowingly misrepresenting, misstating,
or failing to disclose any material fact is guilty of theft and
shall be sentenced pursuant to section 609.52, subdivision 3.
Subd. 2. [FORMS.] The text of subdivision 1 shall be
placed on all forms prescribed by the commissioner for claims or
responses to claims for workers' compensation benefits under
this chapter. The absence of the text does not constitute a
defense against prosecution under subdivision 1.
Sec. 26. Minnesota Statutes 1994, section 176.179, is
amended to read:
176.179 [RECOVERY OF OVERPAYMENTS.]
Notwithstanding section 176.521, subdivision 3, or any
other provision of this chapter to the contrary, except as
provided in this section, no lump sum or weekly payment, or
settlement, which is voluntarily paid to an injured employee or
the survivors of a deceased employee in apparent or seeming
accordance with the provisions of this chapter by an employer or
insurer, or is paid pursuant to an order of the workers'
compensation division, a compensation judge, or court of appeals
relative to a claim by an injured employee or the employee's
survivors, and received in good faith by the employee or the
employee's survivors shall be refunded to the paying employer or
insurer in the event that it is subsequently determined that the
payment was made under a mistake in fact or law by the employer
or insurer. When the payments have been made to a person who is
entitled to receive further payments of compensation for the
same injury, the mistaken compensation may be taken as a full
credit against future lump sum benefit entitlement and as a
partial credit against future weekly periodic benefits. The
credit applied against further payments of temporary total
disability, temporary partial disability, permanent partial
disability, permanent total disability, retraining benefits,
death benefits, or weekly payments of economic recovery or
impairment compensation shall not exceed 20 percent of the
amount that would otherwise be payable.
A credit may not be applied against medical expenses due or
payable.
Where the commissioner or compensation judge determines
that the mistaken compensation was not received in good faith,
the commissioner or compensation judge may order reimbursement
of the compensation. For purposes of this section, a payment is
not received in good faith if it is obtained through fraud, or
if the employee knew that the compensation was paid under
mistake of fact or law, and the employee has not refunded the
mistaken compensation.
Sec. 27. Minnesota Statutes 1994, section 176.221,
subdivision 6a, is amended to read:
Subd. 6a. [MEDICAL, REHABILITATION, ECONOMIC RECOVERY, AND
IMPAIRMENT AND PERMANENT PARTIAL COMPENSATION.] The penalties
provided by this section apply in cases where payment for
treatment under section 176.135, rehabilitation expenses under
section 176.102, subdivisions 9 and 11, economic recovery
compensation or impairment compensation or permanent partial
compensation are not made in a timely manner as required by law
or by rule adopted by the commissioner.
Sec. 28. Minnesota Statutes 1994, section 176.645, is
amended to read:
176.645 [ADJUSTMENT OF BENEFITS.]
Subdivision 1. [AMOUNT.] For injuries occurring after
October 1, 1975 for which benefits are payable under section
176.101, subdivisions 1, 2 and 4, and section 176.111,
subdivision 5, the total benefits due the employee or any
dependents shall be adjusted in accordance with this section.
On October 1, 1981, and thereafter on the anniversary of the
date of the employee's injury the total benefits due shall be
adjusted by multiplying the total benefits due prior to each
adjustment by a fraction, the denominator of which is the
statewide average weekly wage for December 31, of the year two
years previous to the adjustment and the numerator of which is
the statewide average weekly wage for December 31, of the year
previous to the adjustment. For injuries occurring after
October 1, 1975, all adjustments provided for in this section
shall be included in computing any benefit due under this
section. Any limitations of amounts due for daily or weekly
compensation under this chapter shall not apply to adjustments
made under this section. No adjustment increase made on or
after October 1, 1977, but prior to October 1, 1992, under this
section shall exceed six percent a year; in those instances
where the adjustment under the formula of this section would
exceed this maximum, the increase shall be deemed to be six
percent. No adjustment increase made on or after October 1,
1992, under this section shall exceed four percent a year; in
those instances where the adjustment under the formula of this
section would exceed this maximum, the increase shall be deemed
to be four percent. For injuries occurring on and after October
1, 1995, no adjustment increase made on or after October 1,
1995, shall exceed two percent a year; in those instances where
the adjustment under the formula of this section would exceed
this maximum, the increase shall be deemed to be two percent.
The workers' compensation advisory council may consider
adjustment or other further increases and make recommendations
to the legislature.
Subd. 2. [TIME OF FIRST ADJUSTMENT.] For injuries
occurring on or after October 1, 1981, the initial adjustment
made pursuant to subdivision 1 is deferred until the first
anniversary of the date of the injury. For injuries occurring
on or after October 1, 1992, the initial adjustment under
subdivision 1 is deferred until the second anniversary of the
date of the injury. The adjustment made at that time shall be
that of the last year only. For injuries occurring on or after
October 1, 1995, the initial adjustment under subdivision 1 is
deferred until the fourth anniversary of the date of injury.
The adjustment at that time shall be that of the last year only.
Sec. 29. Minnesota Statutes 1994, section 176.66,
subdivision 11, is amended to read:
Subd. 11. [AMOUNT OF COMPENSATION.] The compensation for
an occupational disease is 66-2/3 percent of the employee's
weekly wage on the date of injury subject to a maximum
compensation equal to the maximum compensation in effect on the
date of last exposure. The employee shall be eligible for
supplementary benefits notwithstanding the provisions of section
176.132, after four years have elapsed since the date of last
significant exposure to the hazard of the occupational disease
if that employee's weekly compensation rate is less than the
current supplementary benefit rate.
Sec. 30. Minnesota Statutes 1994, section 176.82, is
amended to read:
176.82 [ACTION FOR CIVIL DAMAGES FOR OBSTRUCTING EMPLOYEE
SEEKING BENEFITS.]
Subdivision 1. [RETALIATORY DISCHARGE.] Any person
discharging or threatening to discharge an employee for seeking
workers' compensation benefits or in any manner intentionally
obstructing an employee seeking workers' compensation benefits
is liable in a civil action for damages incurred by the employee
including any diminution in workers' compensation benefits
caused by a violation of this section including costs and
reasonable attorney fees, and for punitive damages not to exceed
three times the amount of any compensation benefit to which the
employee is entitled. Damages awarded under this section shall
not be offset by any workers' compensation benefits to which the
employee is entitled.
Subd. 2. [REFUSAL TO OFFER CONTINUED EMPLOYMENT.] An
employer who, without reasonable cause, refuses to offer
continued employment to its employee when employment is
available within the employee's physical limitations shall be
liable in a civil action for one year's wages. The wages are
payable from the date of the refusal to offer continued
employment, and at the same time and at the same rate as the
employee's preinjury wage, to continue during the period of the
refusal up to a maximum of $15,000. These payments shall be in
addition to any other payments provided by this chapter. In
determining the availability of employment, the continuance in
business of the employer shall be considered and written rules
promulgated by the employer with respect to seniority or the
provisions or any collective bargaining agreement shall govern.
These payments shall not be covered by a contract of insurance.
The employer shall be served directly and be a party to the
claim. This subdivision shall not apply to employers who employ
15 or fewer full-time equivalent employees.
Sec. 31. [176.861] [DISCLOSURE OF INFORMATION.]
Subdivision 1. [INSURANCE INFORMATION.] The commissioner
may, in writing, require an insurance company to release to the
commissioner any or all relevant information or evidence the
commissioner deems important which the company may have in its
possession relating to a workers' compensation claim including
material relating to the investigation of the claim; statements
of any person, and any other evidence relevant to the
investigation. The writing from the commissioner requiring
release of the information shall contain a statement that the
commissioner has reason to believe a crime or civil fraud has
been committed with respect to an insurance claim, payment, or
application.
Subd. 2. [INFORMATION RELEASED TO AUTHORIZED PERSONS.] If
an insurance company has evidence that a claim may be
fraudulent, the company shall, in writing, notify the
commissioner and provide the commissioner with all relevant
material related to the company's inquiry into the claim.
Subd. 3. [GOOD FAITH IMMUNITY.] An insurance company or
its agent acting in its behalf and in good faith who releases
oral or written information under subdivisions 1 and 2 is immune
from civil or criminal liability that might otherwise be
incurred or imposed.
Subd. 4. [SELF-INSURER; ASSIGNED RISK PLAN.] For the
purposes of this section "insurance company" includes a
self-insurer and the assigned risk plan and their agents.
Sec. 32. Minnesota Statutes 1994, section 268.08,
subdivision 3, is amended to read:
Subd. 3. [NOT ELIGIBLE.] An individual shall not be
eligible to receive benefits for any week with respect to which
the individual is receiving, has received, or has filed a claim
for remuneration in an amount equal to or in excess of the
individual's weekly benefit amount in the form of:
(1) termination, severance, or dismissal payment or wages
in lieu of notice whether legally required or not; provided that
if a termination, severance, or dismissal payment is made in a
lump sum, such lump sum payment shall be allocated over a period
equal to the lump sum divided by the employee's regular pay
while employed by such employer; provided such payment shall be
applied for a period immediately following the last day of
employment but not to exceed 28 calendar days provided that 50
percent of the total of any such payments in excess of eight
weeks shall be similarly allocated to the period immediately
following the 28 days; or
(2) vacation allowance paid directly by the employer for a
period of requested vacation, including vacation periods
assigned by the employer under the provisions of a collective
bargaining agreement, or uniform vacation shutdown; or
(3) compensation for loss of wages under the workers'
compensation law of this state or any other state or under a
similar law of the United States, or under other insurance or
fund established and paid for by the employer except that this
does not apply to an individual who is receiving temporary
partial compensation pursuant to section 176.101, subdivision
3k; or
(4) 50 percent of the pension payments from any fund,
annuity or insurance maintained or contributed to by a base
period employer including the armed forces of the United States
if the employee contributed to the fund, annuity or insurance
and all of the pension payments if the employee did not
contribute to the fund, annuity or insurance; or
(5) 50 percent of a primary insurance benefit under title
II of the Social Security Act, as amended, or similar old age
benefits under any act of Congress or this state or any other
state.
Provided, that if such remuneration is less than the
benefits which would otherwise be due under sections 268.03 to
268.231, the individual shall be entitled to receive for such
week, if otherwise eligible, benefits reduced by the amount of
such remuneration; provided, further, that if the appropriate
agency of such other state or the federal government finally
determines that the individual is not entitled to such benefits,
this provision shall not apply. If the computation of reduced
benefits, required by this subdivision, is not a whole dollar
amount, it shall be rounded down to the next lower dollar amount.
Sec. 33. [APPROPRIATION.]
$900,000 is appropriated from the special compensation fund
for the biennium ending June 30, 1997, to the department of
commerce for the purposes of rate regulation. The complement of
the department of commerce is increased by 13 positions for the
purposes of rate regulation.
Sec. 34. [APPROPRIATION.]
$110,000 is appropriated from the special compensation fund
to the department of labor and industry for the biennium ending
June 30, 1997, for the purposes of this act.
Sec. 35. [REPEALER.]
Minnesota Statutes 1994, section 176.132, is repealed.
Sec. 36. [REPEALER.]
(a) Minnesota Statutes 1994, sections 79.53, subdivision 2;
79.54; 79.56, subdivision 2; 79.57; and 79.58, are repealed.
(b) Minnesota Statutes 1994, sections 176.011, subdivision
26; and 176.101, subdivisions 3a, 3b, 3c, 3d, 3e, 3f, 3g, 3h,
3i, 3j, 3k, 3l, 3m, 3n, 3o, 3p, 3q, 3r, 3s, 3t, and 3u, are
repealed.
(c) Minnesota Statutes 1994, section 176.86, is repealed.
(d) Laws 1990, chapter 521, section 4, is repealed.
Sec. 37. [EFFECTIVE DATE.]
Sections 1 to 11 and 36, paragraph (a), are effective
January 1, 1996. Rates and rating plans in use as of January 1,
1996, may continue to be used until such time as an amendment
thereto or a new rate or rating plan is filed, at which time the
filing is subject to sections 1 to 11.
Sections 23, 24, 26, 27, and 36, paragraph (b), are
effective October 1, 1995.
Sections 13 to 22, 28, 29, 30, and 32 are effective October
1, 1995, and apply to personal injuries occurring on and after
that date.
ARTICLE 2
Section 1. Minnesota Statutes 1994, section 13.69,
subdivision 1, is amended to read:
Subdivision 1. [CLASSIFICATIONS.] (a) The following
government data of the department of public safety are private
data:
(1) medical data on driving instructors, licensed drivers,
and applicants for parking certificates and special license
plates issued to physically handicapped persons; and
(2) social security numbers in driver's license and motor
vehicle registration records, except that social security
numbers must be provided to the department of revenue for
purposes of tax administration and the department of labor and
industry for purposes of workers' compensation administration
and enforcement.
(b) The following government data of the department of
public safety are confidential data: data concerning an
individual's driving ability when that data is received from a
member of the individual's family.
Sec. 2. Minnesota Statutes 1994, section 13.82,
subdivision 1, is amended to read:
Subdivision 1. [APPLICATION.] This section shall apply to
agencies which carry on a law enforcement function, including
but not limited to municipal police departments, county sheriff
departments, fire departments, the bureau of criminal
apprehension, the Minnesota state patrol, the board of peace
officer standards and training, and the department of commerce,
and the department of labor and industry fraud investigation
unit.
Sec. 3. Minnesota Statutes 1994, section 79.074,
subdivision 2, is amended to read:
Subd. 2. [DIVIDENDS.] Dividend plans are not unfairly
discriminatory where different premiums result for different
policyholders with similar loss exposures but different expense
factors, or where different premiums result for different
policyholders with similar expense factors but different loss
exposures, so long as the respective premiums reflect the
differences with reasonable accuracy. Every insurer referred to
in section 79.20 who issues participating policies shall file
with the commissioner a true copy or summary as the commissioner
shall direct of its participating dividend rates as to
policyholders. The commissioner may study the participating
dividend rates and make recommendations to the legislature
concerning possible bases for unfair discrimination.
Sec. 4. Minnesota Statutes 1994, section 79.085, is
amended to read:
79.085 [SAFETY PROGRAMS.]
All insurers writing workers' compensation insurance in
this state shall provide safety and occupational health loss
control consultation services to each of their policyholders
requesting the services in writing. Insurers must annually
notify their policyholders of their right under this section to
safety and occupational health loss consultation services. The
services must include the conduct of workplace surveys to
identify health and safety problems, review of employer injury
records with appropriate personnel, and development of plans to
improve employer occupational health and safety loss records.
Insurers shall notify each policyholder of the availability of
those services and the telephone number and address where such
services can be requested. The notification may be delivered
with the policy of workers' compensation insurance.
Sec. 5. Minnesota Statutes 1994, section 79.211,
subdivision 1, is amended to read:
Subdivision 1. [CERTAIN WAGES EXCLUDED INCLUDED FOR
RATEMAKING.] The rating association or an insurer shall not
include wages paid for a vacation, holiday, or sick leave in the
determination of a workers' compensation insurance premium.
An insurer, including the assigned risk plan, shall not
include wages paid for work performed in an adjacent state in
the determination of a workers' compensation premium if the
employer paid a workers' compensation insurance premium to the
exclusive state fund of the adjacent state on the wages earned
in the adjacent state.
Within 30 days of the effective date of this section, a
licensed data service organization on behalf of its members
shall file an amendment to its charged class premium rates to
reflect the inclusion of vacation, holiday, and sick leave wages
in the determination of premium. Within 30 days of the filing
of those pure premium rates each insurer shall amend its filed
schedule of rates to reflect the inclusion of vacation, holiday,
and sick leave wages in the determination of premium.
Sec. 6. Minnesota Statutes 1994, section 79.251,
subdivision 2, is amended to read:
Subd. 2. [APPROPRIATE MERIT RATING PLAN.] The commissioner
shall develop an appropriate merit rating plan which shall be
applicable to all insureds holding policies or contracts of
coverage issued pursuant to subdivision 4 and to the insurers or
self-insurance administrators issuing those policies or
contracts. The plan shall provide a maximum merit adjustment
equal to ten percent of earned premium. The actual adjustment
may vary with insured's loss experience. To assist small
businesses with good safety records, the commissioner shall
develop a merit rating plan applicable to all employers holding
policies issued pursuant to subdivision 4. The plan shall
provide that nonexperience rated employers, with no lost time
claims for the last three policy years, shall receive 33 percent
credit. The credit must be applied directly to the premium
charged for the policy. Nonexperience rated employers with two
or more lost time claims for the last three policy years may
receive a debit. Experience rated employers shall receive a
maximum credit or debit of ten percent of premium. The merit
rating plan shall be subject to adjustment by the commissioner
as necessary to fulfill the commissioner's assigned risk plan
responsibilities.
Sec. 7. Minnesota Statutes 1994, section 79.251, is
amended by adding a subdivision to read:
Subd. 8. [DISSOLUTION.] Upon the dissolution of the
assigned risk plan, the commissioner shall proceed to wind up
the affairs of the plan, settle its accounts, and dispose of its
assets. The assets and property of the assigned risk plan must
be applied and distributed in the following order of priority:
(1) to the establishment of reserves for claims under
policies and contracts of coverage issued by the assigned risk
plan before termination;
(2) to the payment of all debts and liabilities of the
assigned risk plan, including the repayment of loans and
assessments;
(3) to the establishment of reserves considered necessary
by the commissioner for contingent liabilities or obligations of
the assigned risk plan other than claims arising under policies
and contracts of coverage; and
(4) to the state of Minnesota.
If the commissioner determines that the assets of the
assigned risk plan are insufficient to meet its obligations
under clauses (1) to (3), excluding the repayment of
assessments, the commissioner shall assess all insurers licensed
pursuant to section 60A.06, subdivision 1, clause (5), paragraph
(b), an amount sufficient to fully fund these obligations.
Sec. 8. Minnesota Statutes 1994, section 79.253, is
amended by adding a subdivision to read:
Subd. 2a. [ELIGIBLE APPLICANTS.] An employer is eligible
to apply for a grant or loan under this section if the employer
meets the following requirements:
(1) the employer's workers' compensation insurance is
provided by the assigned risk plan, is provided by an insurer
subject to penalties under chapter 176, or the employer is
self-insured;
(2) the employer has had an on-site safety survey conducted
by a Minnesota occupational safety and health investigator, a
Minnesota department of labor and industry workplace safety and
health consultant, an in-house employee safety and health
committee, a workers' compensation underwriter, a private safety
consultant, or a person under contract with the assigned risk
plan; and
(3) the on-site safety survey recommends specific safety
practices or equipment designed to reduce the risk of illness or
injury to employees.
Sec. 9. Minnesota Statutes 1994, section 79.34,
subdivision 2, is amended to read:
Subd. 2. [LOSSES; RETENTION LIMITS.] The reinsurance
association shall provide and each member shall accept
indemnification for 100 percent of the amount of ultimate loss
sustained in each loss occurrence relating to one or more claims
arising out of a single compensable event, including aggregate
losses related to a single event or occurrence which constitutes
a single loss occurrence, under chapter 176 on and after October
1, 1979, in excess of $300,000 or $100,000 a low, a high, or a
super retention limit, at the option of the member. In case of
occupational disease causing disablement on and after October 1,
1979, each person suffering disablement due to occupational
disease is considered to be involved in a separate loss
occurrence. The lower retention limit shall be increased to the
nearest $10,000, on January 1, 1982 and on each January 1
thereafter by the percentage increase in the statewide average
weekly wage, as determined in accordance with section 176.011,
subdivision 20. On January 1, 1982 and on each January 1
thereafter, the higher retention limit shall be increased by the
amount necessary to retain a $200,000 difference between the two
retention limits. On January 1, 1995, the lower retention limit
is $250,000, which shall also be known as the 1995 base
retention limit. On each January 1 thereafter, the cumulative
annual percentage changes in the statewide average weekly wage
after October 1, 1994, as determined in accordance with section
176.011, subdivision 20, shall first be multiplied by the 1995
base retention limit, the result of which shall then be added to
the 1995 base retention limit. The resulting figure shall be
rounded to the nearest $10,000, yielding the low retention limit
for that year, provided that the low retention limit shall not
be reduced in any year. The high retention limit shall be two
times the low retention limit and shall be adjusted when the low
retention limit is adjusted. The super retention limit shall be
four times the low retention limit and shall be adjusted when
the low retention limit is adjusted. Ultimate loss as used in
this section means the actual loss amount which a member is
obligated to pay and which is paid by the member for workers'
compensation benefits payable under chapter 176 and shall not
include claim expenses, assessments, damages or penalties. For
losses incurred on or after January 1, 1979, any amounts paid by
a member pursuant to sections 176.183, 176.221, 176.225, and
176.82 shall not be included in ultimate loss and shall not be
indemnified by the reinsurance association. A loss is incurred
by the reinsurance association on the date on which the accident
or other compensable event giving rise to the loss occurs, and a
member is liable for a loss up to its retention limit in effect
at the time that the loss was incurred, except that members
which are determined by the reinsurance association to be
controlled by or under common control with another member, and
which are liable for claims from one or more employees entitled
to compensation for a single compensable event, including
aggregate losses relating to a single loss occurrence, may
aggregate their losses and obtain indemnification from the
reinsurance association for the aggregate losses in excess of
the higher highest retention limit selected by any of the
members in effect at the time the loss was incurred. Each
member is liable for payment of its ultimate loss and shall be
entitled to indemnification from the reinsurance association for
the ultimate loss in excess of the member's retention limit in
effect at the time of the loss occurrence.
A member that chooses the higher high or super retention
limit shall retain the liability for all losses below the higher
chosen retention limit itself and shall not transfer the
liability to any other entity or reinsure or otherwise contract
for reimbursement or indemnification for losses below its
retention limit, except in the following cases: (a) when the
reinsurance or contract is with another member which, directly
or indirectly, through one or more intermediaries, control or
are controlled by or are under common control with the member;
(b) when the reinsurance or contract provides for reimbursement
or indemnification of a member if and only if the total of all
claims which the member pays or incurs, but which are not
reimbursable or subject to indemnification by the reinsurance
association for a given period of time, exceeds a dollar value
or percentage of premium written or earned and stated in the
reinsurance agreement or contract; (c) when the reinsurance or
contract is a pooling arrangement with other insurers where
liability of the member to pay claims pursuant to chapter 176 is
incidental to participation in the pool and not as a result of
providing workers' compensation insurance to employers on a
direct basis under chapter 176; (d) when the reinsurance or
contract is limited to all the claims of a specific insured of a
member which are reimbursed or indemnified by a reinsurer which,
directly or indirectly, through one or more intermediaries,
controls or is controlled by or is under common control with the
insured of the member so long as any subsequent contract or
reinsurance of the reinsurer relating to the claims of the
insured of a member is not inconsistent with the bases of
exception provided under clauses (a), (b) and (c); or (e) when
the reinsurance or contract is limited to all claims of a
specific self-insurer member which are reimbursed or indemnified
by a reinsurer which, directly or indirectly, through one or
more intermediaries, controls or is controlled by or is under
common control with the self-insurer member so long as any
subsequent contract or reinsurance of the reinsurer relating to
the claims of the self-insurer member are not inconsistent with
the bases for exception provided under clauses (a), (b) and (c).
Whenever it appears to the commissioner of labor and
industry that any member that chooses the higher high or super
retention limit has participated in the transfer of liability to
any other entity or reinsured or otherwise contracted for
reimbursement or indemnification of losses below its retention
limit in a manner inconsistent with the bases for exception
provided under clauses (a), (b), (c), (d), and (e), the
commissioner may, after giving notice and an opportunity to be
heard, order the member to pay to the state of Minnesota an
amount not to exceed twice the difference between the
reinsurance premium for the higher and lower high or super
retention limit, as appropriate, and the low retention limit
applicable to the member for each year in which the prohibited
reinsurance or contract was in effect. Any member subject to
this penalty provision shall continue to be bound by its
selection of the higher high or super retention limit for
purposes of membership in the reinsurance association.
Sec. 10. Minnesota Statutes 1994, section 79.35, is
amended to read:
79.35 [DUTIES; RESPONSIBILITIES; POWERS.]
The reinsurance association shall do the following on
behalf of its members:
(a) Assume 100 percent of the liability as provided in
section 79.34;
(b) 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;
(c) 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;
(d) Calculate and charge to members a total premium
sufficient to cover the expected liability which the reinsurance
association will incur in excess of the higher retention limit
but less than the prefunded limit, together with incurred or
estimated to be incurred operating and administrative expenses
for the period to which this premium applies and actual claim
payments to be made by members, during the period to which this
premium applies, for claims in excess of the prefunded limit in
effect at the time the loss was incurred. Each member shall be
charged a premium established by the board as sufficient to
cover the reinsurance association's incurred liabilities and
expenses between the member's selected retention limit and the
prefunded limit. The prefunded limit shall be $2,500,000 on and
after October 1, 1979, provided that the prefunded limit shall
be increased on January 1, 1983 and on each January 1 thereafter
by the percentage increase in the statewide average weekly wage,
to the nearest $100,000, as determined in accordance with
section 176.011, subdivision 20 times the lower retention limit
established in section 79.34, subdivision 2. 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. Each member exercising the lower retention option
shall also be charged a premium established by the board as
sufficient to cover incurred or estimated to be incurred claims
for the liability the reinsurance association is likely to incur
between the lower and higher retention limits for the period to
which the premium applies. 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. 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;
(e) Require and accept the payment of premiums from members
of the reinsurance association;
(f) Receive and distribute all sums required by the
operation of the reinsurance association;
(g) 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; and
(h) 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.
Sec. 11. Minnesota Statutes 1994, section 79.52, is
amended by adding a subdivision to read:
Subd. 17. [ASSOCIATION OR RATING ASSOCIATION.]
"Association" or "rating association" means the Minnesota
Workers' Compensation Insurers Association, Inc.
Sec. 12. Minnesota Statutes 1994, section 79.52, is
amended by adding a subdivision to read:
Subd. 18. [RATE OVERSIGHT COMMISSION.] "Rate oversight
commission" means the workers' compensation advisory council
established in chapter 175.
Sec. 13. Minnesota Statutes 1994, section 79.55, is
amended by adding a subdivision to read:
Subd. 8. [ANNUAL FILINGS.] Not later than October 1 of
each year, the rating association shall file with the
commissioner and the rate oversight commission the following
information used and related to the calculation and cost of
workers' compensation insurance premiums:
(1) all statistical plans, including classification
definitions used to assign each compensation risk written by its
members to its approved classification for reporting purposes;
(2) all development factors and alternative derivations;
(3) a description and summary of each data reporting and
monitoring method used to collect and monitor the database for
workers' compensation insurance;
(4) trend factors and alternative derivations and
applications;
(5) pure premium relativities for the approved
classification system for which data are reported;
(6) an evaluation of the effects of changes in law on loss
data;
(7) an explicit discussion and explanation of all
methodology, alternatives examined, assumptions adopted, and
areas of judgment and reasoning supporting judgments entered
into, and the effect of various combinations of these elements
on indications for modification of an overall pure premium rate
level change; and
(8) all merit rating plans and the calculation of any
variable factors necessary for utilization of the plan.
Sec. 14. Minnesota Statutes 1994, section 79.55, is
amended by adding a subdivision to read:
Subd. 9. [ANALYSIS BY RATE OVERSIGHT COMMISSION.] Not
later than November 1 of each year, the rate oversight
commission may submit to the commissioner a report concerning
the completeness of the filing and compliance of the filing with
the standards for excessiveness, inadequacy, and unfair
discrimination set forth in this chapter.
Sec. 15. Minnesota Statutes 1994, section 79.55, is
amended by adding a subdivision to read:
Subd. 10. [DUTIES OF COMMISSIONER.] The commissioner shall
issue a report by January 1 of each year, comparing the average
rates charged by workers' compensation insurers in the state to
the pure premium base rates filed by the association, as
reviewed by the rate oversight commission. The rate oversight
commission shall review the commissioner's report and if the
experience indicates that rates have not reasonably reflected
changes in pure premiums, the rate oversight commission shall
recommend to the legislature appropriate legislative changes to
this chapter.
Sec. 16. Minnesota Statutes 1994, section 79.60,
subdivision 1, is amended to read:
Subdivision 1. [REQUIRED ACTIVITY.] Each insurer shall
perform the following activities:
(a) Maintain membership in and report loss experience data
to a licensed data service organization in accordance with the
statistical plan and rules of the organization as approved by
the commissioner;
(b) Establish a plan for merit rating which shall be
consistently applied to all insureds, provided that members of a
data service organization may use merit rating plans developed
by that data service organization;
(c) Provide an annual report to the commissioner containing
the information and prepared in the form required by the
commissioner; and
(d) Keep a record of the premiums and losses paid under
each workers' compensation policy written in Minnesota in the
form required by the commissioner;
(e) Provide to the association, upon request, information
about its insurance premiums, losses, and operations which the
association shall request in order to prepare and file with the
commissioner and the rate oversight commission the filings
required by this chapter; and
(f) Pay to the association its equitable share of the costs
of preparing the filing with the commissioner and the rate
oversight commission required by this chapter.
Sec. 17. Minnesota Statutes 1994, section 79A.01,
subdivision 1, is amended to read:
Subdivision 1. [SCOPE.] For the purposes of sections
79A.01 to 79A.17 this chapter, the terms defined in this section
have the meaning given them.
Sec. 18. Minnesota Statutes 1994, section 79A.01,
subdivision 4, is amended to read:
Subd. 4. [INSOLVENT SELF-INSURER.] "Insolvent
self-insurer" means either: (1) a member private self-insurer
who has failed to pay compensation as a result of a declaration
of bankruptcy or insolvency by a court of competent jurisdiction
and whose security deposit has been called by the commissioner
pursuant to chapter 176, or; (2) a member self-insurer who has
failed to pay compensation and who has been issued a certificate
of default by the commissioner and whose security deposit has
been called by the commissioner pursuant to chapter 176; or (3)
a member or former member private self-insurer who has failed to
pay an assessment required by section 79A.12, subdivision 2, and
who has been issued a certificate of default by the commissioner
and whose security deposit has been called by the commissioner.
Sec. 19. Minnesota Statutes 1994, section 79A.01, is
amended by adding a subdivision to read:
Subd. 10. [COMMON CLAIMS FUND.] "Common claims fund" means
the cash, cash equivalents, or investment accounts maintained by
the mutual self-insurance group to pay its workers' compensation
liabilities.
Sec. 20. Minnesota Statutes 1994, section 79A.02,
subdivision 1, is amended to read:
Subdivision 1. [MEMBERSHIP.] For the purposes of assisting
the commissioner, there is established a workers' compensation
self-insurers' advisory committee of five members that are
employers authorized to self-insure in Minnesota. Three of the
members and three alternates shall be elected by the members of
the self-insurers' security fund board of trustees and two
alternates shall be appointed by the commissioner.
Sec. 21. Minnesota Statutes 1994, section 79A.02,
subdivision 2, is amended to read:
Subd. 2. [ADVICE TO COMMISSIONER.] At the request of the
commissioner, the committee shall meet and shall advise the
commissioner with respect to whether or not an applicant to
become a private self-insurer in the state of Minnesota has met
the statutory requirements to self-insure. The department of
commerce may furnish the committee with any financial data which
it has, but a member of the advisory committee who may have a
conflict of interest in reviewing the financial data shall not
have access to the data nor participate in the discussions
concerning the applicant. Financial data received from the
commissioner is nonpublic data. The committee shall advise the
commissioner if it has any information that any private
self-insurer may become insolvent.
Sec. 22. Minnesota Statutes 1994, section 79A.02,
subdivision 4, is amended to read:
Subd. 4. [RECOMMENDATIONS TO COMMISSIONER REGARDING
REVOCATION.] After each fifth anniversary from the date each
individual and group self-insurer becomes certified to
self-insure, the committee shall review all relevant financial
data filed with the department of commerce that is otherwise
available to the public and make a recommendation to the
commissioner about whether each self-insurer's certificate
should be revoked. For group self-insurers who have been in
existence for five years or more and have been granted renewal
authority, a level of funding in the common claims fund must be
maintained at not less than the greater of either: (1) one
year's claim losses paid in the most recent year; or (2)
one-third of the security deposit posted with the department of
commerce according to section 79A.04, subdivision 2.
Sec. 23. Minnesota Statutes 1994, section 79A.03, is
amended by adding a subdivision to read:
Subd. 4a. [EXCEPTIONS.] Notwithstanding the requirements
of subdivisions 3 and 4, the commissioner, pursuant to a review
of an existing self-insurer's financial data, may continue a
self-insurer's authority to self-insure for one year if, in the
commissioner's judgment based on all factors relevant to the
self-insurer's financial status, the self-insurer will be able
to meet its obligations under this chapter for the following
year. The relevant factors to be considered must include, but
must not be limited to, the liquidity ratios, leverage ratios,
and profitability ratios of the self-insurer. Where a
self-insurer's authority to self-insure is continued under this
subdivision, the self-insurer may be required to post security
in the amount equal to two times the amount of security required
under section 79A.04, subdivision 2.
Sec. 24. Minnesota Statutes 1994, section 79A.04,
subdivision 2, is amended to read:
Subd. 2. [MINIMUM DEPOSIT.] The minimum deposit is 110
percent of the private self-insurer's estimated future liability.
Up to ten percent of that deposit may be used to secure payment
of all administrative and legal costs, and unpaid assessments
required by section 79A.12, subdivision 2, relating to or
arising from the employer's self-insuring. As used in this
section, "private self-insurer" includes both current and former
members of the self-insurers' security fund; and "private
self-insurers' estimated future liability" means the private
self-insurers' total of estimated future liability as determined
by an Associate or Fellow of the Casualty Actuarial Society
every year for group member private self-insurers and, for a
nongroup member private self-insurer's authority to self-insure,
every year for the first five years. After the first five
years, the nongroup member's total shall be as determined by an
Associate or Fellow of the Casualty Actuarial Society at least
every two years, and each such actuarial study shall include a
projection of future losses during the two-year period until the
next scheduled actuarial study, less payments anticipated to be
made during that time.
All data and information furnished by a private
self-insurer to an Associate or Fellow of the Casualty Actuarial
Society for purposes of determining private self-insurers'
estimated future liability must be certified by an officer of
the private self-insurer to be true and correct with respect to
payroll and paid losses, and must be certified, upon information
and belief, to be true and correct with respect to reserves.
The certification must be made by sworn affidavit. In addition
to any other remedies provided by law, the certification of
false data or information pursuant to this subdivision may
result in a fine imposed by the commissioner of commerce on the
private self-insurer up to the amount of $5,000, and termination
of the private self-insurers' authority to self-insure. The
determination of private self-insurers' estimated future
liability by an Associate or Fellow of the Casualty Actuarial
Society shall be conducted in accordance with standards and
principles for establishing loss and loss adjustment expense
reserves by the Actuarial Standards Board, an affiliate of the
American Academy of Actuaries. The commissioner may reject an
actuarial report that does not meet the standards and principles
of the Actuarial Standards Board, and may further disqualify the
actuary who prepared the report from submitting any future
actuarial reports pursuant to this chapter. Within 30 days
after the actuary has been served by the commissioner with a
notice of disqualification, an actuary who is aggrieved by the
disqualification may request a hearing to be conducted in
accordance with chapter 14. Based on a review of the actuarial
report, the commissioner of commerce may require an increase in
the minimum security deposit in an amount the commissioner
considers sufficient.
Estimated future liability is determined by first taking
the total amount of the self-insured's future liability of
workers' compensation claims and then deducting the total amount
which is estimated to be returned to the self-insurer from any
specific excess insurance coverage, aggregate excess insurance
coverage, and any supplementary benefits or second injury
benefits which are estimated to be reimbursed by the special
compensation fund. Supplementary benefits or second injury
benefits will not be reimbursed by the special compensation fund
unless the special compensation fund assessment pursuant to
section 176.129 is paid and the reports required thereunder are
filed with the special compensation fund. In the case of surety
bonds, bonds shall secure administrative and legal costs in
addition to the liability for payment of compensation reflected
on the face of the bond. In no event shall the security be less
than the last retention limit selected by the self-insurer with
the workers' compensation reinsurance association. The posting
or depositing of security pursuant to this section shall release
all previously posted or deposited security from any obligations
under the posting or depositing and any surety bond so released
shall be returned to the surety. Any other security shall be
returned to the depositor or the person posting the bond.
As a condition for the granting or renewing of a
certificate to self-insure, the commissioner may require a
private self-insurer to furnish any additional security the
commissioner considers sufficient to insure payment of all
claims under chapter 176.
Sec. 25. Minnesota Statutes 1994, section 79A.04,
subdivision 9, is amended to read:
Subd. 9. [INSOLVENCY, BANKRUPTCY, OR DEFAULT; UTILIZATION
OF SECURITY DEPOSIT.] The commissioner of labor and industry
shall notify the commissioner and the security fund if the
commissioner of labor and industry has knowledge that any
private self-insurer has failed to pay workers' compensation
benefits as required by chapter 176. If the commissioner
determines that a court of competent jurisdiction has declared
the private self-insurer to be bankrupt or insolvent, and the
private self-insurer has failed to pay workers' compensation as
required by chapter 176 or, if the commissioner issues a
certificate of default against a private self-insurer for
failure to pay workers' compensation as required by chapter 176,
or failure to pay an assessment to the self-insurers' security
fund when due, then the security deposit shall be utilized to
administer and pay the private self-insurers' workers'
compensation or assessment obligations.
Sec. 26. Minnesota Statutes 1994, section 79A.09,
subdivision 4, is amended to read:
Subd. 4. [CONFIDENTIAL INFORMATION.] The security fund may
receive private data concerning the financial condition of
private self-insurers whose liabilities to pay compensation have
become its responsibility and shall adopt bylaws to prevent
dissemination of that information. The data shall become public
data upon its receipt by the security fund.
Sec. 27. Minnesota Statutes 1994, section 79A.15, is
amended to read:
79A.15 [SURETY BOND FORM.]
The form for the surety bond under this chapter shall be:
STATE OF MINNESOTA
DEPARTMENT OF COMMERCE
SURETY BOND OF SELF-INSURER OF WORKERS' COMPENSATION
IN THE MATTER OF THE CERTIFICATE OF )
)
) SURETY BOND
) NO. .............
) PREMIUM: ........
)
Employer, Certificate No: .............. )
KNOW ALL PERSONS BY THESE PRESENTS:
That .....................................................
(Employer)
whose address is ..............................................
as Principal, and .............................................
(Surety)
a corporation organized under the laws of .....................
and authorized to transact a general surety business in the
State of Minnesota, as Surety, are held and firmly bound to the
State of Minnesota in the penal sum of
...........................dollars ($..........) for which
payment we bind ourselves, our heirs, executors, administrators,
successors, and assigns, jointly and severally, firmly by these
presents.
WHEREAS in accordance with Minnesota Statutes, chapter 176,
the principal elected to self-insure, and made application for,
or received from the commissioner of commerce of the state of
Minnesota, a certificate to self-insure, upon furnishing of
proof satisfactory to the commissioner of commerce of ability to
self-insure and to compensate any or all employees of said
principal for injury or disability, and their dependents for
death incurred or sustained by said employees pursuant to the
terms, provisions, and limitations of said statute;
NOW THEREFORE, the conditions of this bond or obligation
are such that if principal shall pay and furnish compensation,
pursuant to the terms, provisions, and limitations of said
statute to its employees for injury or disability, and to the
dependents of its employees, then this bond or obligation shall
be null and void; otherwise to remain in full force and effect.
FURTHERMORE, it is understood and agreed that:
1. This bond may be amended, by agreement between the
parties hereto and the commissioner of commerce as to the
identity of the principal herein named; and, by agreement of the
parties hereto, as to the premium or rate of premium. Such
amendment must be by endorsement upon, or rider to, this bond,
executed by the surety and delivered to or filed with the
commissioner.
2. The surety does, by these presents, undertake and agree
that the obligation of this bond shall cover and extend to all
past, present, existing, and potential liability of said
principal, as a self-insurer, to the extent of the penal sum
herein named without regard to specific injuries, date or dates
of injuries, happenings or events.
3. The penal sum of this bond may be increased or
decreased, by agreement between the parties hereto and the
commissioner of commerce, without impairing the obligation
incurred under this bond for the overall coverage of the said
principal, for all past, present, existing, and potential
liability, as a self-insurer, without regard to specific
injuries, date or dates of injuries, happenings or events, to
the extent, in the aggregate, of the penal sum as increased or
decreased. Such amendment must be by endorsement.
4. The aggregate liability of the surety hereunder on all
claims whatsoever shall not exceed the penal sum of this bond in
any event.
5. This bond shall be continuous in form and shall remain
in full force and effect unless terminated as follows:
(a) The obligation of this bond shall terminate upon
written notice of cancellation from the surety, given by
registered or certified mail to the commissioner of commerce,
state of Minnesota, save and except as to all past, present,
existing, and potential liability of the principal incurred,
including obligations resulting from claims which are incurred
but not yet reported, as a self-insurer prior to effective date
of termination. This termination is effective 60 days after
receipt of notice of cancellation by the commissioner of
commerce, state of Minnesota.
(b) This bond shall also terminate upon the revocation of
the certificate to self-insure, save and except as to all past,
present, existing, and potential liability of the principal
incurred, including obligations resulting from claims which are
incurred but not yet reported, as a self-insurer prior to
effective date of termination. The principal and the surety,
herein named, shall be immediately notified in writing by said
commissioner, in the event of such revocation.
6. Where the principal posts with the commissioner of
commerce, state of Minnesota, or the state treasurer, state of
Minnesota, a replacement security deposit, in the form of a
surety bond, irrevocable letter of credit, cash, securities, or
any combination thereof, in the full amount as may be required
by the commissioner of commerce, state of Minnesota, to secure
all incurred liabilities for the payment of compensation of said
principal under Minnesota Statutes, chapter 176, the surety is
released from obligations under the surety bond upon the date of
acceptance by the commissioner of commerce, state of Minnesota,
of said replacement security deposit.
7. If the said principal shall suspend payment of workers'
compensation benefits or shall become insolvent or a receiver
shall be appointed for its business, or the commissioner of
commerce, state of Minnesota, issues a certificate of default,
the undersigned surety will become liable for the workers'
compensation obligations of the principal on the date benefits
are suspended. The surety shall begin payments within 14 days
under paragraph 8, or 30 days under paragraph 10, after receipt
of written notification by certified mail from the commissioner
of commerce, state of Minnesota, to begin payments under the
terms of this bond.
8. If the surety exercises its option to administer
claims, it shall pay benefits due to the principal's injured
workers within 14 days of the receipt of the notification by the
commissioner of commerce, state of Minnesota, pursuant to
paragraph 7, without a formal award of a compensation judge, the
commissioner of labor and industry, any intermediate appellate
court, or the Minnesota supreme court and such payment will be a
charge against the penal sum of the bond. Administrative and
legal costs and payment of assessments incurred by the surety in
discharging its obligations and payment of the principal's
obligations for administration and legal expenses and payment of
assessments under Minnesota Statutes, chapter chapters 79A and
176, and sections 79A.01 to 79A.17 and Laws 1988, chapter 674,
section 23, shall also be a charge against the penal sum of the
bond; however, the total amount of this surety bond set aside
for the payment of said administrative and legal expenses and
payment of assessments shall be limited to a maximum ten percent
of the total penal sum of the bond unless otherwise authorized
by the security fund.
9. If any part or provision of this bond shall be declared
unenforceable or held to be invalid by a court of proper
jurisdiction, such determination shall not affect the validity
or enforceability of the other provisions or parts of this bond.
10. If the surety does not give notice to the
(self-insurer's security fund) (commercial self-insurance group
security fund) and the commissioner of commerce, state of
Minnesota, within two business days of receipt of written
notification from the commissioner of commerce, state of
Minnesota, pursuant to paragraph 7, to exercise its option to
administer claims pursuant to paragraph 8, then
the (self-insurer's security fund) (commercial self-insurance
security fund) will assume the payments of the workers'
compensation obligations of the principal pursuant to Minnesota
Statutes, chapter 176. The surety shall pay, within 30 days of
the receipt of the notification by the commissioner of commerce,
state of Minnesota, pursuant to paragraph 7, to the
self-insurer's security fund) (commercial self-insurance group
(security fund) as an initial deposit an amount equal to ten
percent of the penal sum of the bond, and shall thereafter, upon
notification from the (self-insurer's security fund) (commercial
self-insurance group security fund) that the balance of the
initial deposit had fallen to one percent of the penal sum of
the bond, remit to the (self-insurer's security fund)
(commercial self-insurance group security fund) an amount equal
to the payments made by the (self-insurer's security fund)
(commercial self-insurance group security fund) in the three
calendar months immediately preceding said notification. All
such payments will be a charge against the penal sum of the bond.
11. Disputes concerning the posting, renewal, termination,
exoneration, or return of all or any portion of the principal's
security deposit or any liability arising out of the posting or
failure to post security, or the adequacy of the security or the
reasonableness of administrative costs, including legal costs,
arising between or among a surety, the issuer of an agreement of
assumption and guarantee of workers' compensation liabilities,
the issuer of a letter of credit, any custodian of the security
deposit, the principal, or the self-insurers' (self-insurer's
security fund) (commercial self-insurance group security fund)
shall be resolved by the commissioner of commerce pursuant to
Minnesota Statutes, chapter chapters 79A and 176 and sections
79A.01 to 79A.17 and Laws 1988, chapter 674, section 23.
12. Written notification to the surety required by this
bond shall be sent to:
.........................
Name of Surety
.........................
To the attention of Person or
Position
.........................
Address
.........................
City, State, Zip
Written notification to the principal required by this bond
shall be sent to:
........................
Name of Principal
........................
To the attention of Person or
Position
........................
Address
........................
City, State, Zip
13. This bond is executed by the surety to comply with
Minnesota Statutes, chapter 176, and said bond shall be subject
to all terms and provisions thereof.
........................
Name of Surety
........................
Address
........................
City, State, Zip
THIS bond is executed under an unrevoked appointment or
power of attorney.
I certify (or declare) under penalty of perjury under the
laws of the state of Minnesota that the foregoing is true and
correct.
.............. .............................
Date Signature of Attorney-In-Fact
.............................
Printed or Typed Name of
Attorney-In-Fact
A copy of the transcript or record of the unrevoked
appointment, power of attorney, bylaws, or other instrument,
duly certified by the proper authority and attested by the seal
of the insurer entitling or authorizing the person who executed
the bond to do so for and in behalf of the insurer, must be
filed in the office of the commissioner of commerce or must be
included with this bond for such filing.
Sec. 28. [79A.19] [COMMERCIAL SELF-INSURANCE GROUPS;
DEFINITIONS.]
Subdivision 1. [SCOPE.] For the purposes of sections
79A.19 to 79A.32, the terms defined in this section have the
meanings given them. If there is any inconsistency between this
section and section 79A.01, the provisions of this section shall
govern.
Subd. 2. [ACCOUNTANT.] "Accountant" means a certified
public accountant who is not an employee of any member of the
commercial self-insurance group and is not affiliated with any
individual or organization providing services other than
accounting services to the group.
Subd. 3. [ACTUARY.] "Actuary" means an individual who has
attained the status of associate or fellow of the casualty
actuarial society who is not an employee of any member of the
commercial self-insurance group and is not affiliated with any
individual or organization providing services other than
actuarial services to the group.
Subd. 4. [COMMON CLAIMS FUND.] "Common claims fund" means
the cash, cash equivalents, or investment accounts maintained by
the commercial self-insurance group to pay its workers'
compensation liabilities.
Subd. 5. [MEMBER.] "Member" means an employer that
participates in a commercial self-insurance group.
Subd. 6. [COMMERCIAL SELF-INSURANCE GROUP.] "Commercial
self-insurance group" means a group of employers that are
self-insured for workers' compensation under chapter 176 and
elects to operate under sections 79A.19 to 79A.32 rather than
sections 79A.01 to 79A.18.
Subd. 7. [COMMERCIAL SELF-INSURANCE GROUP SECURITY
FUND.] "Commercial self-insurance group security fund" means the
commercial self-insurance group security fund established
pursuant to this chapter.
Subd. 8. [TRUSTEES.] "Trustees" means the board of
trustees of the commercial self-insurance group security fund.
Sec. 29. [79A.20] [ELIGIBILITY REQUIREMENTS FOR COMMERCIAL
SELF-INSURANCE GROUPS.]
Subdivision 1. [GROUP ELIGIBILITY.] A commercial
self-insurance group consists of two or more employers in
similar industries. The commercial self-insurance group shall
not incorporate or form a business trust pursuant to chapter 318.
Subd. 2. [MEMBERSHIP ELIGIBILITY.] A commercial
self-insurance group may only admit employers who meet the
eligibility requirements established by the group including
financial criteria, underwriting guidelines, risk profile, and
any other requirements stated in the commercial self-insurance
group's bylaws or plan of operation.
Sec. 30. [79A.21] [COMMERCIAL SELF-INSURANCE GROUP
APPLICATION.]
Subdivision 1. [PROCEDURE.] (a) Groups proposing to become
licensed as commercial self-insurance groups must complete and
submit an application on a form or forms prescribed by the
commissioner.
(b) The commissioner shall grant or deny the group's
application to self-insure within 60 days after a complete
application has been filed, provided that the time may be
extended for an additional 30 days upon 15 days' prior notice to
the applicant.
Subd. 2. [REQUIRED DOCUMENTS.] All applications must be
accompanied by the following:
(a) A detailed business plan including the risk profile of
the proposed membership, underwriting guidelines, marketing
plan, minimum financial criteria for each member, and financial
projections for the first year of operation.
(b) A plan describing the method in which premiums are to
be charged to the employer members. The plan shall be
accompanied by copies of the member's workers' compensation
insurance policies in force at the time of application. In
developing the premium for the group, the commercial
self-insurance group shall base its premium on the Minnesota
workers' compensation insurers association's manual of rules,
loss costs, and classifications approved for use in Minnesota by
the commissioner. Each member applicant shall, on a form
approved by the commissioner, complete estimated payrolls for
the first 12-month period that the applicant will be
self-insured. Premium volume discounts per the plan will be
permitted if they can be shown to be consistent with actuarial
standards.
(c) A schedule indicating actual or anticipated operational
expenses of the commercial self-insurance group. No authority
to self-insure will be granted unless, over the term of the
policy year, at least 65 percent of total revenues from all
sources for the year are available for the payment of its claim
and assessment obligations. For purposes of this calculation,
claim and assessment obligations include the cost of allocated
loss expenses as well as special compensation fund and
commercial self-insurance group security fund assessments but
exclude the cost of unallocated loss expenses.
(d) An indemnity agreement from each member who will
participate in the commercial self-insurance group, signed by an
officer of each member, providing for joint and several
liability for all claims and expenses of all of the members of
the commercial self-insurance group arising in any fund year in
which the member was a participant on a form approved by the
commissioner. The indemnity agreement shall provide for
assessments according to the group's bylaws on an individual and
proportionate basis.
(e) A copy of the commercial self-insurance group bylaws.
(f) Evidence of the security deposit required under section
79A.24, accompanied by the actuarial certification study for the
minimum security deposit as required under section 79A.24.
(g) Each initial member of the commercial self-insurance
group shall submit to the commercial self-insurance group
accountant its most recent annual financial statement.
Financial statements for a period ending more than six months
prior to the date of the application must be accompanied by an
affidavit, signed by a company officer under oath, stating that
there has been no material lessening of the net worth nor other
adverse changes in its financial condition since the end of the
period. Individual group members constituting at least 75
percent of the group's annual premium shall submit reviewed or
audited financial statements. The remaining members may submit
compilation level statements. Statements for a period ending
more than 12 months prior to the date of application cannot be
accepted.
(h) A compiled combined financial statement of all group
members prepared by the commercial self-insurance group's
accountant and a list of members included in such statements.
(i) A copy of each member's accountant's report letter from
the reports used in compiling the combined financial statements.
(j) A list of all members and the percentage of premium
each represents to the total group's annual premium for the
policy year.
Subd. 3. [APPROVAL.] The commissioner shall approve an
application for self-insurance upon a determination that all of
the following conditions are met:
(1) a completed application and all required documents have
been submitted to the commissioner;
(2) the financial ability of the commercial self-insurance
group is sufficient to fulfill all obligations that may arise
under this chapter or chapter 176;
(3) the annual premium of the commercial self-insurance
group to be charged to initial members is at least $500,000;
(4) the commercial self-insurance group has contracted with
a service company to administer its program; and
(5) the required securities or surety bond shall be on
deposit prior to the effective date of coverage for the
commercial self-insurance group.
Sec. 31. [79A.22] [COMMERCIAL SELF-INSURANCE GROUP
OPERATING REQUIREMENTS.]
Subdivision 1. [BOARD OF DIRECTORS.] (a) A commercial
self-insurance group shall elect a board of directors who shall
have complete authority over and control of the assets of the
commercial self-insurance group. The board of directors will
also be responsible for all of the operations of the commercial
self-insurance group.
(b) The majority of the board of directors shall be owners,
officers, directors, partners, or employees of members of the
commercial self-insurance group. No third-party administrator
or vendor of risk management services shall serve as a director
of the commercial self-insurance group.
(c) The directors shall approve applications for membership
in the commercial self-insurance group.
Subd. 2. [FINANCIAL STANDARDS.] Commercial self-insurance
groups shall have and maintain:
(1) combined net worth of all of the members in an amount
at least equal to 15 times the group's selected retention level
of the workers' compensation reinsurance association;
(2) sufficient assets and liquidity in the group's common
claims fund to promptly and completely meet all obligations of
its members under this chapter and chapter 176.
Subd. 3. [NEW MEMBERSHIP.] The commercial self-insurance
group shall file with the commissioner the name of any new
employer that has been accepted in the group prior to the
initiation date of membership along with the member's signed
indemnity agreement and evidence the member has deposited
sufficient premiums with the group as required by the commercial
self-insurance group's bylaws or plan of operation. The
security deposit of the group will be increased to an amount
equal to 50 percent of the new member's premium. The department
of commerce may, at its option, review the financial statement
of any applicant whose premium equals 25 percent or more of the
group's total premium.
Subd. 4. [COMMERCIAL SELF-INSURANCE GROUP COMMON CLAIMS
FUND.] (a) Each commercial self-insurance group shall establish
a common claims fund.
(b) Each commercial self-insurance group shall, not less
than ten days prior to the proposed effective date of the group,
collect cash premiums from each member equal to not less than 20
percent of the member's annual workers' compensation premium to
be paid into a common claims fund, maintained by the group in a
designated depository. The remaining balance of the member's
premium shall be paid to the group in a reasonable manner over
the remainder of the year. Payments in subsequent years shall
be made according to the business plan.
(c) Each commercial self-insurance group shall initiate
proceedings against a member when that member becomes more than
15 days delinquent in any payment of premium to the fund.
(d) There shall be no commingling of any assets of the
common claims fund with the assets of any individual member or
with any other account of the service company or fiscal agent
unrelated to the payment of workers' compensation liabilities
incurred by the group.
Subd. 5. [JOINT AND SEVERAL LIABILITY.] Each member of a
commercial self-insurance group shall be jointly and severally
liable for the obligations incurred by any member of the same
group under chapter 176 for any fund year in which the member
was a participant of the commercial self-insurance group.
Subd. 6. [ANNUAL AUDIT.] The accounts and records of the
common claims fund shall be audited in the manner required under
section 79A.03, subdivision 10.
Subd. 7. [INVESTMENTS.] (a) Any securities purchased by
the common claims fund shall be in such denominations and with
dates of maturity to ensure securities may be redeemable at
sufficient time and in sufficient amounts to meet the fund's
current and long-term liabilities.
(b) Cash assets of the common claims fund may be invested
in the following securities:
(1) direct obligations of the United States government,
except mortgage-backed securities of the Government National
Mortgage Association;
(2) bonds, notes, debentures, and other instruments which
are obligations of agencies and instrumentalities of the United
States including, but not limited to, the federal National
Mortgage Association, the federal Home Loan Mortgage
Corporation, the federal Home Loan Bank, the Student Loan
Marketing Association, and the Farm Credit System, and their
successors, but not including collateralized mortgage
obligations or mortgage pass-through instruments;
(3) bonds or securities that are issued by the state of
Minnesota and that are secured by the full faith and credit of
the state;
(4) certificates of deposit which are insured by the
federal Deposit Insurance Corporation and are issued by a
Minnesota depository institution;
(5) obligations of, or instruments unconditionally
guaranteed by, Minnesota depository institutions whose long-term
debt rating is at least AA-, or Aa3, or their equivalent by at
least two nationally recognized rating agencies.
Subd. 8. [ADMINISTRATION.] (a) The commercial
self-insurance group shall be required to secure administrative
services through a service company which maintains an office in
the state of Minnesota. Services provided by the service
company or its subcontractor should at a minimum include claim
handling, safety and loss control, and submission of all
required regulatory reports.
(b) The service company must demonstrate it has the
capability to provide, through its employees or by contract,
services which are necessary to administer the self-insurance
group and it must employ or have under contract a claims
adjuster with at least three years of Minnesota specific
workers' compensation claim handling experience.
(c) The service company retained by a commercial
self-insurance group to administer workers' compensation claims
shall estimate the total accrued liability of the group for the
payment of compensation for the commercial self-insurance
group's annual report to the commissioner and shall make the
estimate both in good faith and with the exercise of a
reasonable degree of care.
Subd. 9. [MARKETING AND COMMUNICATIONS.] A commercial
self-insurance group's applications, coverage documents,
quotations, and all marketing materials must prominently display
information indicating that the commercial self-insurance group
is a self-insured program, that members are jointly and
severally liable for the obligations of the commercial
self-insurance group, and that members will be assessed on an
individual and proportionate basis for any deficits created by
the commercial self-insurance group.
Subd. 10. [REINSURANCE.] (a) A commercial self-insurance
group shall be required to purchase specific excess coverage
with the workers' compensation reinsurance association at the
lower retention level for its first three years of operation.
After that time it may select the higher or super retention
level with prior notice given to and approval of the
commissioner.
(b) The commissioner may require a commercial
self-insurance group to purchase aggregate excess coverage. Any
reinsurance or excess coverage purchased other than that of the
workers' compensation reinsurance association must be secured
with an insurance company or reinsurer licensed to underwrite
such coverage in Minnesota and maintains at least an "A" rating
with the A.M. Best rating organization.
Subd. 11. [DISBURSEMENT OF FUND SURPLUS.] (a) One hundred
percent of any surplus money for a fund year in excess of 125
percent of the amount necessary to fulfill all obligations under
the workers' compensation act, chapter 176, for that fund year
may be declared refundable to a member at any time. The date
shall be no earlier than 18 months following the end of such
fund year. The first disbursement of fund surplus may not be
made prior to the completion of an operational audit by the
commissioner. There can be no more than one refund made in any
12-month period. When all the claims of any one fund year have
been fully paid, as certified by an actuary, all surplus money
from that fund year may be declared refundable.
(b) The commercial self-insurance group shall give notice
to the commissioner of any refund. Said notice shall be
accompanied by a statement from the commercial self-insurer
group's certified public accountant certifying that the proposed
refund is in compliance with paragraph (a).
Subd. 12. [SATISFACTION OF FUND DEFICIT.] In the event of
a deficit in any fund year, such deficit shall be paid up
immediately, either from surplus from a fund year other than the
current fund year, or by assessment of the membership. The
commissioner shall be notified within ten days of any transfer
of surplus funds. The commissioner, upon finding that a deficit
in a fund year has not been satisfied by a transfer of surplus
from another fund year, shall order an assessment to be levied
on a proportionate basis against the members of the commercial
self-insurance group during that fund year sufficient to make up
any deficit.
Sec. 32. [79A.23] [COMMERCIAL SELF-INSURANCE GROUP
REPORTING REQUIREMENTS.]
Subdivision 1. [REQUIRED REPORTS TO COMMISSIONER.] Each
commercial self-insurance group shall submit the following
documents to the commissioner.
(a) An annual report shall be submitted by April 1 showing
the incurred losses, paid and unpaid, specifying indemnity and
medical losses by classification, payroll by classification, and
current estimated outstanding liability for workers'
compensation on a calendar year basis, in a manner and on forms
available from the commissioner. In addition each group will
submit a quarterly interim loss report showing incurred losses
for all its membership.
(b) Each commercial self-insurance group shall submit
within 45 days of the end of each quarter:
(1) a schedule showing all the members who participate in
the group, their date of inception, and date of withdrawal, if
applicable;
(2) a separate section identifying which members were added
or withdrawn during that quarter; and
(3) an internal financial statement and copies of the
fiscal agent's statements supporting the balances in the common
claims fund.
(c) The commercial self-insurance group shall submit an
annual certified financial audit report of the commercial
self-insurance group fund by April 1 of the following year. The
report must be accompanied by an expense schedule showing the
commercial self-insurance group's operational costs for the same
year including service company charges, accounting and actuarial
fees, fund administration charges, reinsurance premiums,
commissions, and any other costs associated with the
administration of the group program.
(d) An officer of the commercial self-insurance group
shall, under oath, attest to the accuracy of each report
submitted under paragraphs (a), (b), and (c). Upon sufficient
cause, the commissioner shall require the commercial
self-insurance group to submit a certified audit of payroll and
claim records conducted by an independent auditor approved by
the commissioner, based on generally accepted accounting
principles and generally accepted auditing standards, and
supported by an actuarial review and opinion of the future
contingent liabilities. The basis for sufficient cause shall
include the following factors:
(1) where the losses reported appear significantly
different from similar types of groups;
(2) where major changes in the reports exist from year to
year, which are not solely attributable to economic factors; or
(3) where the commissioner has reason to believe that the
losses and payroll in the report do not accurately reflect the
losses and payroll of the commercial self-insurance group.
If any discrepancy is found, the commissioner shall require
changes in the commercial self-insurance group's business plan
or service company recordkeeping practices.
(e) Each commercial self-insurance group shall submit by
August 15 a copy of the group's annual federal and state income
tax returns or provide proof that it has received an exemption
from these filings.
(f) With the annual loss report each commercial
self-insurance group shall report to the commissioner any
worker's compensation claim where the full, undiscounted value
is estimated to exceed $50,000, in a manner and on forms
prescribed by the commissioner.
(g) Each commercial self-insurance group shall submit by
May 1 a list of all members and the percentage of premium each
represents to the total group's premium for the previous
calendar year.
(h) Each commercial self-insurance group shall submit by
May 1 the following documents prepared by the group's certified
public accountant:
(1) a compiled combined financial statement of group
members and a list of members included in this statement; and
(2) a report that the statements which were combined have
met the requirements of subdivision 2.
(i) If any group member comprises over 25 percent of total
group premium, that member's statement must be reviewed or
audited and must be submitted to the commissioner by May 1 of
the following year.
(j) Each commercial self-insurance group shall submit a
copy of each member's accountant's report letter from the
reports used in compiling the combined financial statements.
Subd. 2. [REQUIRED REPORTS FROM MEMBERS TO GROUP.] Each
member of the commercial self-insurance group shall, by April 1,
submit to the group its most recent annual financial statement,
together with other financial information the group may
require. These financial statements submitted must not have a
fiscal year end date older than January 15 of the group's
calendar year end. Individual group members constituting at
least 75 percent of the group's annual premium shall submit to
the group reviewed or audited financial statements. The
remaining members may submit compilation level statements.
Subd. 3. [OPERATIONAL AUDIT.] (a) The commissioner, prior
to authorizing surplus distribution of a commercial
self-insurance group's first fund year or no later than after
the third anniversary of the group's authority to self-insure,
shall conduct an operational audit of the commercial
self-insurance group's claim handling and reserve practices as
well as its underwriting procedures to determine if they adhere
to the group's business plan. The commissioner may select
outside consultants to assist in conducting the audit. After
completion of the audit, the commissioner shall either renew or
revoke the commercial self-insurance group's authority to
self-insure. The commissioner may also order any changes deemed
necessary in the claims handling, reserving practices, or
underwriting procedures of the group.
(b) The cost of the operational audit shall be borne by the
commercial self-insurance group.
Subd. 4. [UNIT STATISTICAL REPORT.] Each commercial
self-insurance group will annually file a unit statistical
report to the Minnesota workers' compensation insurers
association.
Sec. 33. [79A.24] [COMMERCIAL SELF-INSURANCE GROUP
SECURITY DEPOSIT.]
Subdivision 1. [ANNUAL SECURING OF LIABILITY.] Each year
every commercial self-insurance group shall secure future
incurred liabilities for the payment of compensation and the
performance of the obligations of its membership imposed under
chapter 176. A new deposit must be posted within 30 days of the
filing of the commercial self-insurance group's annual actuarial
report with the commissioner.
Subd. 2. [MINIMUM DEPOSIT.] The minimum deposit is 150
percent of the commercial self-insurance group's future incurred
liabilities for the payment of compensation as determined by an
actuary. If all the members of the commercial self-insurance
group have submitted reviewed or audited financial statements to
the group's accountant, this minimum deposit shall be 110
percent of the commercial self-insurance group's future incurred
liabilities for the payment of workers' compensation as
determined by an actuary. The group must file a letter with the
commissioner from the group's accountant which confirms that the
compiled combined financial statements were prepared from
members reviewed or audited financial statements only before the
lower security deposit is allowed. Each actuarial study shall
include a projection of future losses during a one-year period
until the next scheduled actuarial study, less payments
anticipated to be made during that time. Deduction should be
made for the total amount which is estimated to be returned to
the commercial self-insurance group from any specific excess
insurance coverage, aggregate excess insurance coverage, and any
supplementary benefits which are estimated to be reimbursed by
the special compensation fund. Supplementary benefits will not
be reimbursed by the special compensation fund unless the
special compensation fund assessment pursuant to section 176.129
is paid and the required reports are filed with the special
compensation fund. In the case of surety bonds, bonds shall
secure administrative and legal costs in addition to the
liability for payment of compensation reflected on the face of
the bond. In no event shall the security be less than the
group's selected retention limit of the workers' compensation
reinsurance association. The posting or depositing of security
under this section shall release all previously posted or
deposited security from any obligations under the posting or
depositing and any surety bond so released shall be returned to
the surety. Any other security shall be returned to the
depositor or the person posting the bond.
Subd. 3. [TYPE OF ACCEPTABLE SECURITY.] The commissioner
may only accept as security, and the commercial self-insurance
group shall deposit as security, cash, approved government
securities as set forth in section 176.181, subdivision 2b,
surety bonds or irrevocable letters of credit in any combination
in accordance with the requirements under section 79A.04,
subdivision 3.
Subd. 4. [CUSTODIAL ACCOUNTS.] (a) All surety bonds,
irrevocable letters of credit, and documents showing issuance of
any irrevocable letter of credit shall be deposited in
accordance with the provisions of section 79A.071.
(b) Upon the commissioner sending a request to renew,
request to post, or request to increase a security deposit, a
perfected security interest is created in the commercial
self-insurance group's and member's assets in favor of the
commissioner to the extent of any then unsecured portion of the
commercial self-insurance group's incurred liabilities. The
perfected security interest is transferred to any cash or
securities thereafter posted by the commercial self-insurance
group with the state treasurer and is released only upon either
of the following:
(1) the acceptance by the commissioner of a surety bond or
irrevocable letter of credit for the full amount of the incurred
liabilities for the payment of compensation; or
(2) the return of cash or securities by the commissioner.
The commercial self-insurance group loses all right, title, and
interest in and any right to control all assets or obligations
posted or left on deposit as security. In the event of a
declaration of bankruptcy or insolvency by a court of competent
jurisdiction, or in the event of the issuance of a certificate
of default by the commissioner, the commissioner shall liquidate
the deposit as provided in this chapter, and transfer it to the
commercial self-insurance group security fund for application to
the commercial self-insurance group's incurred liability.
(c) No securities in physical form on deposit with the
state treasurer or the commissioner or custodial accounts
assigned to the state shall be released or exchanged without an
order from the commissioner. No security can be exchanged more
than once every 90 days.
(d) Any securities deposited with the state treasurer or
with a custodial account assigned to the state treasurer or
letters of credit or surety bonds held by the commissioner may
be exchanged or replaced by the depositor with any other
acceptable securities or letters of credit or surety bond of
like amount so long as the market value of the securities or
amount of the surety bonds or letter of credit equals or exceeds
the amount of the deposit required. If securities are replaced
by surety bond, the commercial self-insurance group must
maintain securities on deposit in an amount sufficient to meet
all outstanding workers' compensation liability arising during
the period covered by the deposit of the replaced securities.
(e) The commissioner shall return on an annual basis to the
commercial self-insurance group all amounts of security
determined by the commissioner to be in excess of the statutory
requirements for the group to self-insure, including that
necessary for administrative costs, legal fees, and the payment
of any future workers' compensation claims.
Sec. 34. [79A.25] [DEFAULT OF A COMMERCIAL SELF-INSURANCE
GROUP.]
Subdivision 1. [NOTICE OF INSOLVENCY, BANKRUPTCY, OR
DEFAULT.] The commissioner of labor and industry shall notify
the commissioner and the commercial self-insurance group
security fund if the commissioner of labor and industry has
knowledge that any commercial self-insurance group has failed to
pay workers' compensation benefits as required by chapter 176.
If the commissioner determines that a court of competent
jurisdiction has declared the commercial self-insurance group to
be bankrupt or insolvent and the commercial self-insurance group
has failed to pay workers' compensation as required by chapter
176 or if the commissioner issues a certificate of default
against a commercial self-insurance group for failure to pay
workers' compensation as required by chapter 176, then the
security deposit posted by the commercial self-insurance group
shall be utilized to administer and pay the commercial
self-insurance group's workers' compensation obligation.
Subd. 2. [REVOCATION OF CERTIFICATE TO SELF-INSURE.] (a)
The commissioner shall revoke the commercial self-insurance
group's certificate to self-insure once notified of the
commercial self-insurance group's bankruptcy, insolvency, or
upon issuance of a certificate of default. The revocation shall
be completed as soon as practicable, but no later than 30 days
after the commercial self-insurance group's security has been
called.
(b) The commissioner shall also revoke a commercial
self-insurance group's authority to self-insure on the following
grounds:
(1) failure to comply with any lawful order of the
commissioner;
(2) failure to comply with any provision of chapter 176;
(3) a deterioration of the commercial self-insurance
group's financial condition affecting its ability to pay
obligations in chapter 176;
(4) committing an unfair or deceptive act or practice as
defined in section 72A.20; or
(5) failure to abide by the plan of operation of the
workers' compensation reinsurance association.
Subd. 3. [NOTICE BY THE COMMISSIONER.] In the event of
bankruptcy, insolvency, or certificate of default, the
commissioner shall immediately notify by certified mail the
state treasurer, the surety, the issuer of an irrevocable letter
of credit, and any custodian of the security. At the time of
notification, the commissioner shall also call the security and
transfer and assign it to the commercial self-insurance group
security fund. The commissioner shall also notify by certified
mail the commercial self-insurance group's security fund and
order the commercial security fund to assume the insolvent
commercial self-insurance group's obligations for which it is
liable under chapter 176.
Sec. 35. [79A.26] [COMMERCIAL SELF-INSURANCE GROUP
SECURITY FUND.]
Subdivision 1. [CREATION.] The commercial self-insurance
group security fund is established as a nonprofit corporation
pursuant to the Minnesota nonprofit corporation act, sections
317A.001 to 317A.909. If any provision of the Minnesota
nonprofit corporation act conflicts with any provision of this
chapter, the provisions of this chapter apply. Each commercial
self-insurance group that elects to be subject to the terms of
sections 79A.19 to 79A.32 rather than sections 79A.01 to 79A.18
shall participate in the commercial self-insurance group
security fund. This participation shall be a condition of
maintaining its certificate to self-insure.
Subd. 2. [BOARD OF TRUSTEES.] The commercial security fund
shall be governed by a board consisting of a minimum of three
and maximum of five trustees. The trustees shall be
representatives of commercial self-insurance groups who shall be
elected by the participants of the commercial security fund,
each group having one vote. The trustees initially elected by
the participants shall serve staggered terms of either two or
three years. Thereafter, trustees shall be elected to
three-year terms and shall serve until their successors are
elected and assume office pursuant to the bylaws of the
commercial security fund. Two additional trustees shall be
appointed by the commissioner. These trustees shall serve
four-year terms. One of these trustees shall serve a two-year
term. Thereafter, the trustees shall be appointed to four-year
terms, and shall serve until their successors are appointed and
assume office according to the bylaws of the commercial security
fund. In addition to the trustees elected by the participants
or appointed by the commissioner, the commissioner of labor and
industry or the commissioner's designee shall be an ex officio,
nonvoting member of the board of trustees. A member of the
board of trustees may designate another person to act in the
member's place as though the member were acting and the
designee's actions shall be deemed those of the member.
Subd. 3. [BYLAWS.] The commercial security fund shall
establish bylaws and a plan of operation, subject to the prior
approval of the commissioner, necessary to the purposes of this
chapter and to carry out the responsibilities of the commercial
security fund. The commercial security fund may carry out its
responsibilities directly or by contract, and may purchase
services and insurance and borrow funds it deems necessary for
the protection of the commercial self-insurance group
participants and their employees.
Subd. 4. [CONFIDENTIAL INFORMATION.] The commercial
security fund may receive private data concerning the financial
condition of commercial self-insurance groups whose liabilities
to pay compensation have become its responsibility and shall
adopt bylaws to prevent dissemination of that information.
Subd. 5. [EMPLOYEES.] Commercial security fund employees
are not state employees and are not subject to any state civil
service regulations.
Subd. 6. [ASSUMPTION OF OBLIGATIONS.] Upon order of the
commissioner under section 79A.25, subdivision 3, the commercial
security fund shall assume the workers' compensation obligations
of an insolvent commercial self-insurance group. The
commissioner shall further order the commercial self-insurance
group security fund to commence payment of these obligations
within 14 days of the receipt of this notification and order.
Subd. 7. [ACT OR OMISSIONS; PENALTIES.] Notwithstanding
subdivision 6, the commercial security fund shall not be liable
for the payment of any penalties assessed for any act or
omission on the part of any person other than the commercial
security fund or its appointed administrator, including, but not
limited to, the penalties provided in chapter 176 unless the
commercial security fund or its appointed administrator would be
subject to penalties under chapter 176 as the result of the
actions of the commercial security fund or its administrator.
Subd. 8. [PARTY IN INTEREST.] The commercial security fund
shall be a party in interest in all proceedings involving
compensation claims against an insolvent commercial
self-insurance group whose compensation obligations have been
paid or assumed by the commercial security fund. The commercial
security fund shall have the same rights and defenses as the
insolvent commercial self-insurance group, including, but not
limited to, all of the following:
(1) to appear, defend, and appeal claims;
(2) to receive notice of, investigate, adjust, compromise,
settle, and pay claims; and
(3) to investigate, handle, and deny claims.
Subd. 9. [PAYMENTS TO COMMERCIAL SECURITY FUND.]
Notwithstanding sections 79A.19 to 79A.32 or chapter 176 to the
contrary, in the event that the commercial self-insurance group
security fund assumes the obligations of any bankrupt or
insolvent commercial self-insurance group pursuant to this
section, then the proceeds of any surety bond, workers'
compensation reinsurance association, specific excess insurance
or aggregate excess insurance policy, and any special
compensation fund payment or supplementary benefit
reimbursements shall be paid to the commercial self-insurance
group security fund instead of the bankrupt or insolvent
commercial self-insurance group or its successor in interest.
No special compensation fund reimbursements shall be made to the
commercial security fund unless the special compensation fund
assessments under section 176.129 are paid and the required
reports are made to the special compensation fund.
Subd. 10. [INSOLVENT COMMERCIAL SELF-INSURANCE GROUP.] The
commercial security fund shall have the right and obligation to
obtain reimbursement from an insolvent commercial self-insurance
group up to the amount of the commercial self-insurance group's
workers' compensation obligations paid and assumed by the
commercial security fund, including reasonable administrative
and legal costs. This right includes, but is not limited to, a
right to claim for wages and other necessities of life advanced
to claimants as subrogee of the claimants in any action to
collect against the commercial self-insurance group as debtor.
Subd. 11. [SECURITY DEPOSITS.] The commercial security
fund shall have the right and obligation to obtain from the
security deposit of an insolvent commercial self-insurance group
the amount of the commercial self-insurance group's compensation
obligations, including reasonable administrative and legal
costs, paid or assumed by the commercial security fund.
Reimbursement of administrative costs, including legal costs,
shall be subject to approval by a majority of the commercial
security fund's voting trustees. The commercial security fund
shall be a party in interest in any action to obtain the
security deposit for the payment of compensation obligations of
an insolvent commercial self-insurance group.
Subd. 12. [LEGAL ACTIONS.] The commercial security fund
shall have the right to bring an action against any person or
entity to recover compensation paid and liability assumed by the
commercial security fund, including, but not limited to, any
excess insurance carrier of the insolvent commercial
self-insurance group and any person or entity whose negligence
or breach of an obligation contributed to any underestimation of
the commercial self-insurance group's accrued liability as
reported to the commissioner.
Subd. 13. [PARTY IN INTEREST.] The commercial security
fund may be a party in interest in any action brought by any
other person seeking damages resulting from the failure of an
insolvent commercial self-insurance group to pay workers'
compensation required under this subdivision.
Subd. 14. [ASSETS MAINTAINED.] The commercial security
fund shall maintain cash, readily marketable securities, or
other assets, or a line of credit, approved by the commissioner,
sufficient to immediately continue the payment of the
compensation obligations of an insolvent commercial
self-insurance group pending receipt of the security deposit,
surety bond proceeds, irrevocable letter of credit, or, if
necessary, assessment of the participants. The commissioner may
establish the minimum amount to be maintained by, or immediately
available to, the commercial security fund for this purpose.
Subd. 15. [ASSESSMENT.] The commercial security fund may
assess each of its participants a pro rata share of the funding
necessary to carry out its obligation and the purposes of
sections 79A.19 to 79A.32. Total annual assessments in any
calendar year shall be a percentage of the workers' compensation
benefits paid under sections 176.101 and 176.111 during the
previous calendar year. The annual assessment calculation shall
not include supplementary benefits paid which will be reimbursed
by the special compensation fund. Funds obtained by assessments
under this subdivision may only be used for the purposes of
sections 79A.19 to 79A.32. The trustees shall certify to the
commissioner the collection and receipt of all money from
assessments, noting any delinquencies. The trustees shall take
any action deemed appropriate to collect any delinquent
assessments.
Subd. 16. [AUDIT OF FUND.] The trustees shall annually
contract for an independent certified audit of the financial
activities of the fund. An annual report on the financial
status of the commercial self-insurance group security fund
shall be submitted to the commissioner and to each commercial
group participant.
Sec. 36. [79A.27] [INDEMNITY AGREEMENT FORM.]
INDIVIDUAL AND PROPORTIONATE INDEMNITY AGREEMENT
WHEREAS, (name of company) has agreed to be and has been
accepted as a member of (name of commercial self-insurance
group).
WHEREAS, (name of company) has agreed to be bound by all of
the provisions of the Minnesota workers' compensation act and
all rules promulgated thereunder.
WHEREAS, that (name of company) has agreed to be bound by
bylaws or plan of operation and all amendments thereto of (name
of commercial self-insurance group);
NOW THEREFORE, IT IS AGREED that:
1. (Name of company) shall be jointly and severally liable
for all claims and expenses of all the members of (name of
commercial self-insurance group) arising in any fund year in
which (name of company) is a member of the commercial
self-insurance group.
2. (Name of commercial self-insurance group) shall assess
(name of company) on an individual and proportionate basis for
its share of the total liability of the commercial
self-insurance group.
3. In the event that (name of company) is not a member for
the full year, it shall be only liable for a pro rata share of
that liability.
IN WITNESS WHEREOF, the (name of company) and (name of
commercial self-insurance group) have caused this indemnity
agreement to be executed by its authorized officers:
Commercial Self-Insurance Group Name Company Name
By: ............................ By: ...................
date: .......................... date: .................
Sec. 37. [79A.28] [OPEN MEETING; ADMINISTRATIVE PROCEDURE
ACT.]
The commercial self-insurance group security fund and its
board of trustees shall not be subject to:
(1) the open meeting law;
(2) the open appointments law;
(3) the data privacy law; and
(4) except where specifically set forth, the administrative
procedure act.
Sec. 38. [79A.29] [RULES.]
The commissioner may adopt, amend, and repeal rules
reasonably necessary to carry out the purposes of this chapter.
Minnesota Rules, chapter 2780, shall apply to commercial
self-insurance groups unless otherwise specified by rule.
Sec. 39. [79A.30] [GOVERNING LAW.]
If there is any inconsistency between sections 79A.19 to
79A.32 and any other statute or rule, the provisions of sections
79A.19 to 79A.32 shall govern with respect to commercial
self-insurance groups.
Sec. 40. [79A.31] [COMMERCIAL SELF-INSURANCE GROUP
SECURITY FUND MEMBERSHIP; WITHDRAWAL FROM SELF-INSURERS'
SECURITY FUND.]
Subdivision 1. [WITHDRAWAL.] Any group self-insurer that
is a member as of August 1, 1995, of the self-insurers' security
fund established under section 79A.09, may until January 1,
1996, elect to withdraw from that fund and become a member of
the commercial self-insurance group security fund established
under section 79A.26. The transferring group shall be subject
to the provisions and requirements of sections 79A.19 to 79A.34
as of the date of transfer. Additional security may be required
pursuant to section 79A.24. Group self-insurers electing to
transfer to the commercial self-insurance group fund shall not
be subject to the provisions of section 79A.06, subdivision 5,
including, but not limited to, assessments by the self-insurers'
security fund.
Subd. 2. [TRANSFER; NOTICE TO COMMISSIONER.] A group
self-insurer shall provide to the commissioner written notice of
its intent to transfer membership to the commercial
self-insurance group security fund. The notice shall be sent at
least 30 days prior to the date the group self-insurer requests
membership in the commercial self-insurance group security fund.
Subd. 3. [TRANSFER OF POTENTIAL AND CONTINGENT
LIABILITIES.] Upon transfer pursuant to subdivision 1, the
commercial self-insurance group security fund shall assume all
of the past, present, and future potential and contingent
workers' compensation liabilities of the transferring group in
the event of any bankruptcy or insolvency of that group or its
failure to meet its obligations under this chapter and chapter
176.
Subd. 4. [ELECTION.] A group self-insurer established
after August 1, 1995, may elect to become a member of either the
self-insurers' security fund or the commercial self-insurance
group security fund. However, once the election is made, a
group may not transfer to the other security fund.
Sec. 41. [79A.32] [REPORTING TO MINNESOTA WORKERS'
COMPENSATION INSURERS' ASSOCIATION.]
Subdivision 1. [REQUIRED ACTIVITY.] Each self-insurer
shall perform the following activities:
(1) maintain membership in and report loss experience data
to the Minnesota workers' compensation insurers association, or
a licensed data service organization, in accordance with the
statistical plan and rules of the organization as approved by
the commissioner;
(2) establish a plan for merit rating which shall be
consistently applied to all insureds, provided that members of a
data service organization may use merit rating plans developed
by that data service organization;
(3) provide an annual report to the commissioner containing
the information and prepared in the form required by the
commissioner; and
(4) keep a record of the losses paid by the self-insurers
and premiums for the group self-insurers.
Subd. 2. [PERMITTED ACTIVITY.] In addition to any other
activities not prohibited by this chapter, self-insurers may:
(1) through licensed data service organizations,
individually, or with self-insurers commonly owned, managed, or
controlled, conduct research and collect statistics to
investigate, identify, and classify information relating to
causes or prevention of losses;
(2) develop and use classification plans and rates based
upon any reasonable factors; and
(3) develop rules for the assignment of risks to
classifications.
Subd. 3. [DELAYED REPORTING.] Private self-insurers
established under sections 79A.01 to 79A.18 prior to August 1,
1995, need not begin filing the reports required under
subdivision 1 until January 1, 1998.
Sec. 42. Minnesota Statutes 1994, section 168.012,
subdivision 1, is amended to read:
Subdivision 1. (a) The following vehicles are exempt from
the provisions of this chapter requiring payment of tax and
registration fees, except as provided in subdivision 1c:
(1) vehicles owned and used solely in the transaction of
official business by representatives of foreign powers, by the
federal government, the state, or any political subdivision;
(2) vehicles owned and used exclusively by educational
institutions and used solely in the transportation of pupils to
and from such institutions;
(3) vehicles used solely in driver education programs at
nonpublic high schools;
(4) vehicles owned by nonprofit charities and used
exclusively to transport disabled persons for educational
purposes;
(5) vehicles owned and used by honorary consul or consul
general of foreign governments; and
(6) ambulances owned by ambulance services licensed under
section 144.802, the general appearance of which is unmistakable.
(b) Vehicles owned by the federal government, municipal
fire apparatus, police patrols and ambulances, the general
appearance of which is unmistakable, shall not be required to
register or display number plates.
(c) Unmarked vehicles used in general police work, liquor
investigations, arson investigations, and passenger automobiles,
pickup trucks, and buses owned or operated by the department of
corrections shall be registered and shall display appropriate
license number plates which shall be furnished by the registrar
at cost. Original and renewal applications for these license
plates authorized for use in general police work and for use by
the department of corrections must be accompanied by a
certification signed by the appropriate chief of police if
issued to a police vehicle, the appropriate sheriff if issued to
a sheriff's vehicle, the commissioner of corrections if issued
to a department of corrections vehicle, or the appropriate
officer in charge if issued to a vehicle of any other law
enforcement agency. The certification must be on a form
prescribed by the commissioner and state that the vehicle will
be used exclusively for a purpose authorized by this section.
(d) Unmarked vehicles used by the department departments of
revenue and labor and industry, fraud unit, in conducting
seizures or criminal investigations must be registered and must
display passenger vehicle classification license number plates
which shall be furnished at cost by the registrar. Original and
renewal applications for these passenger vehicle license plates
must be accompanied by a certification signed by the
commissioner of revenue or the commissioner of labor and
industry. The certification must be on a form prescribed by the
commissioner and state that the vehicles will be used
exclusively for the purposes authorized by this section.
(e) All other motor vehicles shall be registered and
display tax-exempt number plates which shall be furnished by the
registrar at cost, except as provided in subdivision 1c. All
vehicles required to display tax-exempt number plates shall have
the name of the state department or political subdivision, or
the nonpublic high school operating a driver education program,
on the vehicle plainly displayed on both sides thereof in
letters not less than 2-1/2 inches high and one-half inch wide;
except that each state hospital and institution for the mentally
ill and mentally retarded may have one vehicle without the
required identification on the sides of the vehicle, and county
social service agencies may have vehicles used for child and
vulnerable adult protective services without the required
identification on the sides of the vehicle. Such identification
shall be in a color giving contrast with that of the part of the
vehicle on which it is placed and shall endure throughout the
term of the registration. The identification must not be on a
removable plate or placard and shall be kept clean and visible
at all times; except that a removable plate or placard may be
utilized on vehicles leased or loaned to a political subdivision
or to a nonpublic high school driver education program.
Sec. 43. Minnesota Statutes 1994, section 175.16, is
amended to read:
175.16 [DIVISIONS.]
The department of labor and industry shall consist of the
following divisions: division of workers' compensation,
division of boiler inspection, division of occupational safety
and health, division of statistics, division of steamfitting
standards, division of voluntary apprenticeship, division of
labor standards, and such other divisions as the commissioner of
the department of labor and industry may deem necessary and
establish. Each division of the department and persons in
charge thereof shall be subject to the supervision of the
commissioner of the department of labor and industry and, in
addition to such duties as are or may be imposed on them by
statute, shall perform such other duties as may be assigned to
them by said commissioner. Notwithstanding any other law to the
contrary, the commissioner is the administrator and supervisor
of all of the department's dispute resolution functions and
personnel and may delegate authority to settlement judges and
others to make determinations under sections 176.106, 176.238,
and 176.239 and to approve settlement of claims under section
176.521.
Sec. 44. Minnesota Statutes 1994, section 176.011,
subdivision 16, is amended to read:
Subd. 16. [PERSONAL INJURY.] "Personal injury" means
injury arising out of and in the course of employment and
includes personal injury caused by occupational disease; but
does not cover an employee except while engaged in, on, or about
the premises where the employee's services require the
employee's presence as a part of such that service at the time
of the injury and during the hours of such that service. Where
the employer regularly furnished transportation to employees to
and from the place of employment such, those employees are
subject to this chapter while being so transported, but shall.
Personal injury does not include an injury caused by the act of
a third person or fellow employee intended to injure the
employee because of personal reasons, and not directed against
the employee as an employee, or because of the employment.
Sec. 45. Minnesota Statutes 1994, section 176.081,
subdivision 1, is amended to read:
Subdivision 1. [APPROVAL LIMITATION OF FEES.] (a) A fee
for legal services of 25 percent of the first $4,000 of
compensation awarded to the employee and 20 percent of the next
$60,000 of compensation awarded to the employee is the maximum
permissible fee and does not require approval by the
commissioner, compensation judge, or any other party except as
provided in paragraph (d). All fees, including fees for
obtaining medical or rehabilitation benefits, must be calculated
according to the formula under this subdivision, or earned in
hourly fees for representation at discontinuance conferences
under section 176.239, or earned in hourly fees for
representation on rehabilitation or medical issues under section
176.102, 176.135, or 176.136. Attorney fees for recovery of
medical or rehabilitation benefits or services shall be assessed
against the employer or insurer if these fees exceed the
contingent fee under this section in connection with benefits
currently in dispute. The amount of the fee that the employer
or insurer is liable for is the amount determined under
subdivision 5, minus the contingent fee except as otherwise
provided in clause (1) or (2).
(1) the contingent attorney fee for recovery of monetary
benefits according to the formula in this section is presumed to
be adequate to cover recovery of medical and rehabilitation
benefit or services concurrently in dispute. Attorney fees for
recovery of medical or rehabilitation benefits or services shall
be assessed against the employer or insurer only if the attorney
establishes that the contingent fee is inadequate to reasonably
compensate the attorney for representing the employee in the
medical or rehabilitation dispute. In cases where the
contingent fee is inadequate the employer or insurer is liable
for attorney fees based on the formula in this subdivision or in
clause (2).
For the purposes of applying the formula where the employer
or insurer is liable for attorney fees, the amount of
compensation awarded for obtaining disputed medical and
rehabilitation benefits under sections 176.102, 176.135, and
176.136 shall be the dollar value of the medical or
rehabilitation benefit awarded, where ascertainable.
(2) The maximum attorney fee for obtaining a change of
doctor or qualified rehabilitation consultant, or any other
disputed medical or rehabilitation benefit for which a dollar
value is not reasonably ascertainable, is the amount charged in
hourly fees for the representation or $500, whichever is less,
to be paid by the employer or insurer.
(3) The fees for obtaining disputed medical or
rehabilitation benefits are included in the $13,000 limit in
paragraph (b). An attorney must concurrently file all
outstanding disputed issues. An attorney is not entitled to
attorney fees for representation in any issue which could
reasonably have been addressed during the pendency of other
issues for the same injury.
(b) All fees for legal services related to the same injury
are cumulative and may not exceed $13,000, except as provided by
subdivision 2. If multiple injuries are the subject of a
dispute, the commissioner, compensation judge, or court of
appeals shall specify the attorney fee attributable to each
injury.
(c) If the employer or the insurer or the defendant is
given written notice of claims for legal services or
disbursements, the claim shall be a lien against the amount paid
or payable as compensation. Subject to the foregoing maximum
amount for attorney fees, up to 25 percent of the first $4,000
of periodic compensation awarded to the employee and 20 percent
of the next $60,000 of periodic compensation awarded to the
employee may be withheld from the periodic payments for attorney
fees or disbursements if the payor of the funds clearly
indicates on the check or draft issued to the employee for
payment the purpose of the withholding, the name of the
attorney, the amount withheld, and the gross amount of the
compensation payment before withholding. In no case shall fees
be calculated on the basis of any undisputed portion of
compensation awards. Allowable fees under this chapter shall be
based solely upon genuinely disputed claims or portions of
claims, including disputes related to the payment of
rehabilitation benefits or to other aspects of a rehabilitation
plan. Fees for administrative conferences under section 176.239
shall be determined on an hourly basis, according to the
criteria in subdivision 5. The existence of a dispute is
dependent upon a disagreement after the employer or insurer has
had adequate time and information to take a position on
liability. Neither the holding of a hearing nor the filing of
an application for a hearing alone may determine the existence
of a dispute. Except where the employee is represented by an
attorney in other litigation pending at the department or at the
office of administrative hearings, a fee may not be charged
after June 1, 1996, for services with respect to a medical or
rehabilitation issue arising under section 176.102, 176.135, or
176.136 performed before the employee has consulted with the
department and the department certifies that there is a dispute
and that it has tried to resolve the dispute.
(d) An attorney who is claiming legal fees for representing
an employee in a workers' compensation matter shall file a
statement of attorney fees with the commissioner, compensation
judge before whom the matter was heard, or workers' compensation
court of appeals on cases before the court. A copy of the
signed retainer agreement shall also be filed. The employee and
insurer shall receive a copy of the statement. The statement
shall be on a form prescribed by the commissioner, and shall
report the number of hours spent on the case, and shall clearly
and conspicuously state that the employee or insurer has ten
calendar days to object to the attorney fees requested. If no
objection is timely made by the employee or insurer, the amount
requested shall be conclusively presumed reasonable providing
the amount does not exceed the limitation in subdivision 1. The
commissioner, compensation judge, or court of appeals shall
issue an order granting the fees and the amount requested shall
be awarded to the party requesting the fee.
If a timely objection is filed, or the fee is determined on
an hourly basis, the commissioner, compensation judge, or court
of appeals shall review the matter and make a determination
based on the criteria in subdivision 5.
If no timely objection is made by an employer or insurer,
reimbursement under subdivision 7 shall be made if the statement
of fees requested this reimbursement.
(e) Employers and insurers may not pay attorney fees or
wages for legal services of more than $13,000 per case unless
the additional fees or wages are approved under subdivision 2.
(f) Each insurer and self-insured employer shall file
annual statements with the commissioner detailing the total
amount of legal fees and other legal costs incurred by the
insurer or employer during the year. The statement shall
include the amount paid for outside and in-house counsel,
deposition and other witness fees, and all other costs relating
to litigation.
Sec. 46. Minnesota Statutes 1994, section 176.081,
subdivision 7, is amended to read:
Subd. 7. [AWARD; ADDITIONAL AMOUNT.] If the employer or
insurer files a denial of liability, notice of discontinuance,
or fails to make payment of compensation or medical expenses
within the statutory period after notice of injury or
occupational disease, or otherwise unsuccessfully resists the
payment of compensation or medical expenses, or unsuccessfully
disputes the payment of rehabilitation benefits or other aspects
of a rehabilitation plan, and the injured person has employed an
attorney at law, who successfully procures payment on behalf of
the employee or who enables the resolution of a dispute with
respect to a rehabilitation plan, the compensation judge,
commissioner, or the workers' compensation court of appeals upon
appeal, upon application, shall award to the employee against
the insurer or self-insured employer or uninsured employer, in
addition to the compensation benefits paid or awarded to the
employee, an amount equal to 25 30 percent of that portion of
the attorney's fee which has been awarded pursuant to this
section that is in excess of $250.
Sec. 47. Minnesota Statutes 1994, section 176.081,
subdivision 7a, is amended to read:
Subd. 7a. [SETTLEMENT OFFER.] At any time prior to one day
before a matter is to be heard, a party litigating a claim made
pursuant to this chapter may serve upon the adverse party a
reasonable offer of settlement of the claim, with provision for
costs and disbursements then accrued. If before the hearing the
adverse party serves written notice that the offer is accepted,
either party may then file the offer and notice of acceptance,
together with the proof of service thereof, and thereupon
judgment shall be entered.
If an offer by an employer or insurer is not accepted by
the employee, it shall be deemed withdrawn and evidence thereof
is not admissible, except in a proceeding to determine
attorney's fees. Notwithstanding the provisions of subdivision
7, if the judgment finally obtained by the employee is less
favorable than the offer, the employer shall not be liable for
any part of the attorney's fees awarded pursuant to this section.
If an offer by an employee is not accepted by the employer
or insurer, it shall be deemed withdrawn and evidence thereof is
not admissible, except in a proceeding to determine attorney's
fees. Notwithstanding the provisions of subdivision 7, if the
judgment finally obtained by the employee is at least as
favorable as the offer, the employer shall pay an additional 25
percent, over the amount provided in subdivision 7, of that
portion of the attorney's fee which has been awarded pursuant to
this section that is in excess of $250.
The fact that an offer is made but not accepted does not
preclude a subsequent offer.
Sec. 48. Minnesota Statutes 1994, 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 25
percent of the first $4,000 of compensation awarded to the
employee and 20 percent of the next $60,000 of compensation
awarded to the employee subject to a cumulative maximum fee of
$13,000 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.
Sec. 49. Minnesota Statutes 1994, section 176.081, is
amended by adding a subdivision to read:
Subd. 12. [SANCTIONS; FAILURE TO PREPARE, APPEAR, OR
PARTICIPATE.] If a party or party's attorney fails to appear at
any conference or hearing scheduled under this chapter, is
substantially unprepared to participate in the conference or
hearing, or fails to participate in good faith, the commissioner
or compensation judge, upon motion or upon its own initiative,
shall require the party or the party's attorney or both to pay
the reasonable expenses including attorney fees, incurred by the
other party due to the failure to appear, prepare, or
participate. Attorney fees or other expenses may not be awarded
if the commissioner or compensation judge finds that the
noncompliance was substantially justified or that other
circumstances would make the sanction unjust. The department of
labor and industry, and the office of administrative hearings
may by rule establish additional sanctions for failure of a
party or the party's attorney to appear, prepare for, or
participate in a conference or hearing.
Sec. 50. Minnesota Statutes 1994, section 176.102,
subdivision 3a, is amended to read:
Subd. 3a. [DISCIPLINARY ACTIONS.] The panel has authority
to discipline qualified rehabilitation consultants and vendors
and may impose a penalty of up to $1,000 $3,000 per violation,
payable to the special compensation fund, and may suspend or
revoke certification. Complaints against registered qualified
rehabilitation consultants and vendors shall be made to the
commissioner who shall investigate all complaints. If the
investigation indicates a violation of this chapter or rules
adopted under this chapter, the commissioner may initiate a
contested case proceeding under the provisions of chapter 14.
In these cases, the rehabilitation review panel shall make the
final decision following receipt of the report of an
administrative law judge. The decision of the panel is
appealable to the workers' compensation court of appeals in the
manner provided by section 176.421. The panel shall
continuously study rehabilitation services and delivery, develop
and recommend rehabilitation rules to the commissioner, and
assist the commissioner in accomplishing public education.
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. 51. Minnesota Statutes 1994, section 176.102,
subdivision 11, is amended to read:
Subd. 11. [RETRAINING; COMPENSATION.] (a) Retraining is
limited to 156 weeks. An employee who has been approved for
retraining may petition the commissioner or compensation judge
for additional compensation not to exceed 25 percent of the
compensation otherwise payable. If the commissioner or
compensation judge determines that this additional compensation
is warranted due to unusual or unique circumstances of the
employee's retraining plan, the commissioner may award
additional compensation in an amount not to exceed the
employee's request. This additional compensation shall cease at
any time the commissioner or compensation judge determines the
special circumstances are no longer present.
(b) If the employee is not employed during a retraining
plan that has been specifically approved under this section,
temporary total compensation is payable for up to 90 days after
the end of the retraining plan; except that, payment during the
90-day period is subject to cessation in accordance with section
176.101. If the employee is employed during the retraining plan
but earning less than at the time of injury, temporary partial
compensation is payable at the rate of 66-2/3 percent of the
difference between the employee's weekly wage at the time of
injury and the weekly wage the employee is able to earn in the
employee's partially disabled condition, subject to the maximum
rate for temporary total compensation. Temporary partial
compensation is not subject to the 225-week or 450-week
limitations provided by section 176.101, subdivision 2, during
the retraining plan, but is subject to those limitations before
and after the plan.
(c) Any request for retraining shall be filed with the
commissioner before 104 weeks of any combination of temporary
total or temporary partial compensation have been paid.
Retraining shall not be available after 104 weeks of any
combination of temporary total or temporary partial compensation
benefits have been paid unless the request for the retraining
has been filed with the commissioner prior to the time the 104
weeks of compensation have been paid.
(d) The employer or insurer must notify the employee in
writing of the 104 week limitation for filing a request for
retraining with the commissioner. This notice must be given
before 80 weeks of temporary total disability or temporary
partial disability compensation have been paid, regardless of
the number of weeks that have elapsed since the date of injury.
If the notice is not given before the 80 weeks, the period of
time within which to file a request for retraining is extended
by the number of days the notice is late, but in no event may a
request be filed later than 225 weeks after any combination of
temporary total disability or temporary partial disability
compensation have been paid. The commissioner may assess a
penalty of $25 per day that the notice is late, up to a maximum
penalty of $2,000, against an employer or insurer for failure to
provide the notice. The penalty is payable to the assigned risk
safety account.
Sec. 52. Minnesota Statutes 1994, section 176.103,
subdivision 2, is amended to read:
Subd. 2. [SCOPE.] The commissioner shall monitor the
medical and surgical treatment provided to injured employees,
the services of other health care providers and shall also
monitor hospital utilization as it relates to the treatment of
injured employees. This monitoring shall include determinations
concerning the appropriateness of the service, whether the
treatment is necessary and effective, the proper cost of
services, the quality of the treatment, the right of providers
to receive payment under this chapter for services rendered or
the right to receive payment under this chapter for future
services. Insurers and self-insurers must assist the
commissioner in this monitoring by reporting to the commissioner
cases of suspected excessive, inappropriate, or unnecessary
treatment. The commissioner shall report specific cases of
suspected inappropriate, unnecessary, and excessive treatment to
the medical services review board. The medical services review
board shall review those cases and make a determination of
whether there is inappropriate, unnecessary, or excessive
treatment based on rules adopted by the commissioner in
consultation with the medical services review board. The
determination of the board is not subject to the contested case
provisions of the administrative procedure act in chapter 14.
An affected provider shall be given notice and an opportunity to
be heard before the board prior to the board reporting its
findings and conclusions. The board shall report its findings
and conclusions to the commissioner. The findings and
conclusions of the board are binding on the commissioner. The
commissioner shall order a sanction if the board has concluded
there was inappropriate, unnecessary, or excessive treatment.
The commissioner in consultation with the medical services
review board shall adopt rules defining standards of treatment
including inappropriate, unnecessary, or excessive treatment and
the sanctions to be imposed for inappropriate, unnecessary, or
excessive treatment. The sanctions imposed may include, without
limitation, a warning, a restriction on providing treatment,
requiring preauthorization by the board for a plan of treatment,
and suspension from receiving compensation for the provision of
treatment under chapter 176. The commissioner's authority under
this section also includes the authority to make determinations
regarding any other activity involving the questions of
utilization of medical services, and any other determination the
commissioner deems necessary for the proper administration of
this section, but does not include the authority to make the
initial determination of primary liability, except as provided
by section 176.305.
Sec. 53. Minnesota Statutes 1994, 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, one physical
therapist, 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 may appoint from its members whatever
subcommittees it deems appropriate.
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 physical
therapist, one hospital administrator, three physicians, one
employee representative, one employer or insurer representative,
and one representative of the general public.
The board shall review clinical results for adequacy and
recommend to the commissioner scales for disabilities and
apportionment.
The board shall review and recommend to the commissioner
rates for individual clinical procedures and aggregate costs.
The board shall assist the commissioner in accomplishing public
education.
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.
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 medical services review board may upon petition
from the commissioner and after hearing, issue a warning, a
penalty of $200 per violation, a restriction on providing
treatment that requires preauthorization by the board,
commissioner, or compensation judge for a plan of treatment,
disqualify, or suspend a provider from receiving payment for
services rendered under this chapter if a provider has violated
any part of this chapter or rule adopted under this chapter, or
where there has been a pattern of, or an egregious case of,
inappropriate, unnecessary, or excessive treatment by a provider.
The hearings are initiated by the commissioner under the
contested case procedures of chapter 14. The board shall make
the final decision following receipt of the recommendation of
the administrative law judge. The board's decision is
appealable to the workers' compensation court of appeals in the
manner provided by section 176.421.
(c) The board may adopt rules of procedure. The rules may
be joint rules with the rehabilitation review panel.
Sec. 54. Minnesota Statutes 1994, section 176.104,
subdivision 1, is amended to read:
Subdivision 1. [DISPUTE.] If there exists a dispute
regarding medical causation or whether an injury arose out of
and in the course and scope of employment and an employee has
been disabled for the requisite time under section 176.102,
subdivision 4, is otherwise eligible for rehabilitation services
under section 176.102 prior to determination of liability, the
employee shall be referred by the commissioner to the
department's vocational rehabilitation unit which shall provide
rehabilitation consultation if appropriate. The services
provided by the department's vocational rehabilitation unit and
the scope and term of the rehabilitation are governed by section
176.102 and rules adopted pursuant to that section.
Rehabilitation costs and services under this subdivision shall
be monitored by the commissioner.
Sec. 55. Minnesota Statutes 1994, section 176.106, is
amended to read:
176.106 [ADMINISTRATIVE CONFERENCE.]
Subdivision 1. [SCOPE.] All determinations by the
commissioner or the commissioner's designee pursuant to section
176.102, 176.103, 176.135, or 176.136 shall be in accordance
with the procedures contained in this section.
Subd. 2. [REQUEST FOR CONFERENCE.] Any party may request
an administrative conference by filing a request on a form
prescribed by the commissioner.
Subd. 3. [CONFERENCE.] The matter shall be scheduled for
an administrative conference within 60 days after receipt of the
request for a conference. Notice of the conference shall be
served on all parties no later than 14 days prior to the
conference, unless the commissioner determines that a conference
shall not be held. The commissioner may order an administrative
conference before the commissioner's designee whether or not a
request for conference is filed.
The commissioner may refuse to hold an administrative
conference and refer the matter for a settlement or pretrial
conference or may certify the matter to the office of
administrative hearings for a full hearing before a compensation
judge.
Subd. 4. [APPEARANCES.] All parties shall appear either
personally, by telephone, by representative, or by written
submission. The commissioner commissioner's designee shall
determine the issues in dispute based upon the information
available at the conference.
Subd. 5. [DECISION.] A written decision shall be issued by
the commissioner or an authorized representative commissioner's
designee determining all issues considered at the conference or
if a conference was not held, based on the written submissions.
Disputed issues of fact shall be determined by a preponderance
of the evidence. The decision must be issued within 30 days
after the close of the conference or if no conference was held,
within 60 days after receipt of the request for conference. The
decision must include a statement indicating the right to
request a de novo hearing before a compensation judge and how to
initiate the request.
Subd. 6. [PENALTY.] At a conference, if the insurer does
not provide a specific reason for nonpayment of the items in
dispute, the commissioner commissioner's designee may assess a
penalty of $300 payable to the assigned risk safety account,
unless it is determined that the reason for the lack of
specificity was the failure of the insurer, upon timely request,
to receive information necessary to remedy the lack of
specificity. This penalty is in addition to any penalty that
may be applicable for nonpayment.
Subd. 7. [REQUEST FOR HEARING.] Any party aggrieved by the
decision of the commissioner commissioner's designee may request
a formal hearing by filing the request with the commissioner and
serving the request on all parties no later than 30 days after
the decision; provided, however, that the commissioner shall
review a decision of the commissioner's designee regarding a
claim for a medical benefit of $1500 or less and the
commissioner's decision shall be final. The request Requests on
other issues shall be referred to the office of administrative
hearings for a de novo hearing before a compensation
judge. Except where the only issues to be determined pursuant
to this section involve liability for past treatment or services
that will not affect entitlement to ongoing or future proposed
treatment or services under section 176.102 or 176.135, the
commissioner shall refer a timely request to the office of
administrative hearings within five working days after filing of
the request and the hearing at the office of administrative
hearings must be held on the first date that all parties are
available but not later than 60 days after the office of
administrative hearings receives the matter. Following the
hearing, the compensation judge must issue the decision within
30 days. The decision of the compensation judge is appealable
pursuant to section 176.421.
Subd. 8. [DENIAL OF PRIMARY LIABILITY.] The commissioner
does not have authority to make determinations relating to
medical or rehabilitation benefits when there is a genuine
dispute over whether the injury initially arose out of and in
the course of employment, except as provided by section 176.305.
Subd. 9. [SUBSEQUENT CAUSATION ISSUES.] If initial
liability for an injury has been admitted or established and an
issue subsequently arises regarding causation between the
employee's condition and the work injury, the commissioner may
make the subsequent causation determination subject to de novo
hearing by a compensation judge with a right to review by the
court of appeals, as provided in this chapter.
Sec. 56. [176.107] [TELECONFERENCES.]
The division, department, office, or the court of appeals
may, at its discretion, conduct mediation sessions,
administrative conferences, settlement conferences, or hearings
as provided in this chapter in person, by telephone, or by
visual or audio teleconferencing methods.
Sec. 57. [176.108] [LIGHT-DUTY WORK POOLS.]
Employers may form light-duty work pools for the purpose of
encouraging the return to work of injured employees. The
commissioner may adopt emergency and permanent rules necessary
to implement this section.
Sec. 58. Minnesota Statutes 1994, section 176.129,
subdivision 9, is amended to read:
Subd. 9. [POWERS OF FUND.] In addition to powers granted
to the special compensation fund by this chapter the fund may do
the following:
(a) sue and be sued in its own name;
(b) intervene in or commence an action under this chapter
or any other law, including, but not limited to, intervention or
action as a subrogee to the division's right in a third-party
action, any proceeding under this chapter in which liability of
the special compensation fund is an issue, or any proceeding
which may result in other liability of the fund or to protect
the legal right of the fund;
(c) enter into settlements including but not limited to
structured, annuity purchase agreements with appropriate parties
under this chapter;. Notwithstanding any other provision of
this chapter, any settlement may provide that the fund partially
or totally denies liability for payment of benefits, and no
determination of employer insurance status and liability under
section 176.183, subdivision 2, shall be required for approval
of the stipulation for a settlement;
(d) contract with another party to administer the special
compensation fund;
(e) take any other action which an insurer is permitted by
law to take in operating within this chapter; and
(f) conduct a financial audit of indemnity claim payments
and assessments reported to the fund. This may be contracted by
the fund to a private auditing firm.
Sec. 59. Minnesota Statutes 1994, section 176.129,
subdivision 10, is amended to read:
Subd. 10. [PENALTY.] Sums paid to the commissioner
pursuant to this section shall be in the manner prescribed by
the commissioner. The commissioner may impose a penalty payable
to the assigned risk safety account of up to 15 percent of the
amount due under this section but not less than $500 $1,000 in
the event payment is not made in the manner prescribed.
Sec. 60. Minnesota Statutes 1994, section 176.130,
subdivision 9, is amended to read:
Subd. 9. [FALSE REPORTS.] Any person or entity that, for
the purpose of evading payment of the assessment or avoiding the
reimbursement, or any part of it, makes a false report under
this section shall pay to the assigned risk safety account, in
addition to the assessment, a penalty of 50 75 percent of the
amount of the assessment. A person who knowingly makes or signs
a false report, or who knowingly submits other false
information, is guilty of a misdemeanor.
Sec. 61. Minnesota Statutes 1994, section 176.135,
subdivision 1, is amended to read:
Subdivision 1. [MEDICAL, PSYCHOLOGICAL, CHIROPRACTIC,
PODIATRIC, SURGICAL, HOSPITAL.] (a) The employer shall furnish
any medical, psychological, chiropractic, podiatric, surgical
and hospital treatment, including nursing, medicines, medical,
chiropractic, podiatric, and surgical supplies, crutches and
apparatus, including artificial members, or, at the option of
the employee, if the employer has not filed notice as
hereinafter provided, Christian Science treatment in lieu of
medical treatment, chiropractic medicine and medical supplies,
as may reasonably be required at the time of the injury and any
time thereafter to cure and relieve from the effects of the
injury. This treatment shall include treatments necessary to
physical rehabilitation.
(b) The employer shall pay for the reasonable value of
nursing services provided by a member of the employee's family
in cases of permanent total disability.
(c) Exposure to rabies is an injury and an employer shall
furnish preventative treatment to employees exposed to rabies.
(d) The employer shall furnish replacement or repair for
artificial members, glasses, or spectacles, artificial eyes,
podiatric orthotics, dental bridge work, dentures or artificial
teeth, hearing aids, canes, crutches, or wheel chairs damaged by
reason of an injury arising out of and in the course of the
employment. For the purpose of this paragraph, "injury"
includes damage wholly or in part to an artificial member. In
case of the employer's inability or refusal seasonably to
provide the items required to be provided under this paragraph,
the employer is liable for the reasonable expense incurred by or
on behalf of the employee in providing the same, including costs
of copies of any medical records or medical reports that are in
existence, obtained from health care providers, and that
directly relate to the items for which payment is sought under
this chapter, limited to the charges allowed by subdivision 7,
and attorney fees incurred by the employee. Attorney's fees
shall be determined on an hourly basis according to the criteria
in section 176.081, subdivision 5.
(e) Both the commissioner and the compensation judges have
authority to make determinations under this section in
accordance with sections 176.106 and 176.305.
(f) An employer may require that the treatment and supplies
required to be provided by an employer by this section be
received in whole or in part from a managed care plan certified
under section 176.1351 except as otherwise provided by that
section.
Sec. 62. Minnesota Statutes 1994, section 176.1351,
subdivision 1, is amended to read:
Subdivision 1. [APPLICATION.] Any person or entity, other
than a workers' compensation insurer or an employer for its own
employees, may make written application to the commissioner to
have a plan certified that provides management of quality
treatment to injured workers for injuries and diseases
compensable under this chapter. Specifically, and without
limitation, an entity licensed under chapter 62C or 62D or a
preferred provider organization that is subject to chapter 72A
is eligible for certification under this section. Each
application for certification shall be accompanied by a
reasonable fee prescribed by the commissioner which shall be
deposited in the special compensation fund. A plan may be
certified to provide services in a limited geographic area. A
certificate is valid for the period the commissioner prescribes
unless revoked or suspended. Application for certification
shall be made in the form and manner and shall set forth
information regarding the proposed plan for providing services
as the commissioner may prescribe. The information shall
include, but not be limited to:
(1) a list of the names of all health care providers who
will provide services under the managed care plan, together with
appropriate evidence of compliance with any licensing or
certification requirements for those providers to practice in
this state; and
(2) a description of the places and manner of providing
services under the plan.
Sec. 63. Minnesota Statutes 1994, section 176.1351,
subdivision 5, is amended to read:
Subd. 5. [REVOCATION, SUSPENSION, AND REFUSAL TO CERTIFY;
PENALTIES AND ENFORCEMENT.] (a) The commissioner shall refuse to
certify or shall revoke or suspend the certification of a
managed care plan if the commissioner finds that the plan for
providing medical or health care services fails to meet the
requirements of this section, or service under the plan is not
being provided in accordance with the terms of a certified plan.
(b) In lieu of or in addition to suspension or revocation
under paragraph (a), the commissioner may, for any noncompliance
with the managed care plan as certified or any violation of a
statute or rule applicable to a managed care plan, assess an
administrative penalty payable to the special compensation fund
in an amount up to $25,000 for each violation or incidence of
noncompliance. The commissioner may adopt emergency or
permanent rules necessary to implement this subdivision. In
determining the level of an administrative penalty, the
commissioner shall consider the following factors:
(1) the number of workers affected or potentially affected
by the violation or noncompliance;
(2) the effect or potential effect of the violation or
noncompliance on workers' health, access to health services, or
workers' compensation benefits;
(3) the effect or potential effect of the violation or
noncompliance on workers' understanding of their rights and
obligations under the workers' compensation law and rules;
(4) whether the violation or noncompliance is an isolated
incident or part of a pattern of violations; and
(5) the potential or actual economic benefits derived by
the managed care plan or a participating provider by virtue of
the violation or noncompliance.
The commissioner shall give written notice to the managed
care plan of the penalty assessment and the reasons for the
penalty. The managed care plan has 30 days from the date the
penalty notice is issued within which to file a written request
for an administrative hearing and review of the commissioner's
determination pursuant to section 176.85, subdivision 1.
(c) If the commissioner, for any reason, has cause to
believe that a managed care plan has or may violate a statute or
rule or a provision of the managed care plan as certified, the
commissioner may, before commencing action under paragraph (a)
or (b), call a conference with the managed care plan and other
persons who may be involved in the suspected violation or
noncompliance for the purpose of ascertaining the facts relating
to the suspected violation or noncompliance and arriving at an
adequate and effective means of correcting or preventing the
violation or noncompliance. The commissioner may enter into
stipulated consent agreements with the managed care plan for
corrective or preventive action or the amount of the penalty to
be paid. Proceedings under this paragraph shall not be governed
by any formal procedural requirements, and may be conducted in a
manner the commissioner deems appropriate under the
circumstances.
(d) The commissioner may issue an order directing a managed
care plan or a representative of a managed care plan to cease
and desist from engaging in any act or practice that is not in
compliance with the managed care plan as certified, or that it
is in violation of an applicable statute or rule. Within 30
days of service of the order, the managed care plan may request
review of the cease and desist order by an administrative law
judge pursuant to chapter 14. The decision of the
administrative law judge shall include findings of fact,
conclusions of law and appropriate orders, which shall be the
final decision of the commissioner. In the event of
noncompliance with a cease and desist order, the commissioner
may institute a proceeding in district court to obtain
injunctive or other appropriate relief.
(e) A managed care plan, participating health care
provider, or an employer or insurer that receives services from
the managed care plan, shall cooperate fully with an
investigation by the commissioner. For purposes of this
section, cooperation includes, but is not limited to, attending
a conference called by the commissioner under paragraph (c),
responding fully and promptly to any questions relating to the
subject of the investigation, and providing copies of records,
reports, logs, data, and other information requested by the
commissioner to assist in the investigation.
(f) Any person acting on behalf of a managed care plan who
knowingly submits false information in any report required to be
filed by a managed care plan is guilty of a misdemeanor.
Sec. 64. Minnesota Statutes 1994, section 176.136,
subdivision 1a, is amended to read:
Subd. 1a. [RELATIVE VALUE FEE SCHEDULE.] The liability of
an employer for services included in the medical fee schedule is
limited to the maximum fee allowed by the schedule in effect on
the date of the medical service, or the provider's actual fee,
whichever is lower. The medical fee schedule effective on
October 1, 1991, shall remain in effect until the commissioner
adopts a new schedule by permanent rule. The commissioner shall
adopt permanent rules regulating fees allowable for medical,
chiropractic, podiatric, surgical, and other health care
provider treatment or service, including those provided to
hospital outpatients, by implementing a relative value fee
schedule to be effective on October 1, 1993. The commissioner
may adopt by reference the relative value fee schedule adopted
for the federal Medicare program or a relative value fee
schedule adopted by other federal or state agencies. The
relative value fee schedule shall contain reasonable
classifications including, but not limited to, classifications
that differentiate among health care provider disciplines. The
conversion factors for the original relative value fee schedule
must reasonably reflect a 15 percent overall reduction from the
medical fee schedule most recently in effect. The reduction
need not be applied equally to all treatment or services, but
must represent a gross 15 percent reduction.
After permanent rules have been adopted to implement this
section, the conversion factors must be adjusted annually on
October 1 by no more than the percentage change computed under
section 176.645, but without the annual cap provided by that
section. The commissioner shall annually give notice in the
State Register of the adjusted conversion factors and may also
give annual notice of any additions, deletions, or changes to
the relative value units or service codes adopted by the federal
Medicare program. The relative value units may be statistically
adjusted in the same manner as for the original workers'
compensation relative value fee schedule. This notice The
notices of the adjusted conversion factors and additions,
deletions, or changes to the relative value units and service
codes shall be in lieu of the requirements of chapter 14.
Sec. 65. Minnesota Statutes 1994, section 176.136,
subdivision 1b, is amended to read:
Subd. 1b. [LIMITATION OF LIABILITY.] (a) The liability of
the employer for treatment, articles, and supplies provided to
an employee while an inpatient or outpatient at a small hospital
shall be the hospital's usual and customary charge, unless the
charge is determined by the commissioner or a compensation judge
to be unreasonably excessive. A "small hospital," for purposes
of this paragraph, is a hospital which has 100 or fewer licensed
beds.
(b) The liability of the employer for the treatment,
articles, and supplies that are not limited by subdivision 1a or
1c or paragraph (a) shall be limited to 85 percent of the
provider's usual and customary charge, or 85 percent of the
prevailing charges for similar treatment, articles, and supplies
furnished to an injured person when paid for by the injured
person, whichever is lower. On this basis, the commissioner or
compensation judge may determine the reasonable value of all
treatment, services, and supplies, and the liability of the
employer is limited to that amount. The commissioner may by
rule establish the reasonable value of a service, article, or
supply in lieu of the 85 percent limitation in this paragraph.
(c) The limitation of liability for charges provided by
paragraph (b) does not apply to a nursing home that participates
in the medical assistance program and whose rates are
established by the commissioner of human services.
Sec. 66. Minnesota Statutes 1994, section 176.136,
subdivision 2, is amended to read:
Subd. 2. [EXCESSIVE FEES.] If the employer or insurer
determines that the charge for a health service or medical
service is excessive, no payment in excess of the reasonable
charge for that service shall be made under this chapter nor may
the provider collect or attempt to collect from the injured
employee or any other insurer or government amounts in excess of
the amount payable under this chapter unless the commissioner,
compensation judge, or court of appeals determines otherwise.
In such a case, the health care provider may initiate an action
under this chapter for recovery of the amounts deemed excessive
by the employer or insurer, but the employer or insurer shall
have the burden of proving excessiveness.
A charge for a health service or medical service is
excessive if it:
(1) exceeds the maximum permissible charge pursuant to
subdivision 1, 1a, 1b, or 1c;
(2) is for a service provided at a level, duration, or
frequency that is excessive, based upon accepted medical
standards for quality health care and accepted rehabilitation
standards;
(3) is for a service that is outside the scope of practice
of the particular provider or is not generally recognized within
the particular profession of the provider as of therapeutic
value for the specific injury or condition treated; or
(4) is otherwise deemed excessive or inappropriate pursuant
to rules adopted pursuant to this chapter.
Sec. 67. Minnesota Statutes 1994, section 176.138, is
amended to read:
176.138 [MEDICAL DATA; ACCESS.]
(a) Notwithstanding any other state laws related to the
privacy of medical data or any private agreements to the
contrary, the release in writing, by telephone discussion, or
otherwise 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, and the date of
discussions with medical providers about medical data shall be
confirmed, in writing to the person or organization that
collected or currently possesses the data. Written medical data
that exists at the time the request is made shall be provided by
the collector or possessor within seven working days of
receiving the request. Nonwritten medical data may be provided,
but is not required to be provided, by the collector or
possessor. In all cases of a request for the data or discussion
with a medical provider about 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 or a written
confirmation of the discussion. This data shall be treated as
private data by the party who requests or receives the data and
the party receiving the data shall provide the employee or the
employee's attorney with a copy of all data requested by the
requester.
(b) Medical data which is not directly related to a current
injury or disability shall not be released without prior
authorization of the employee.
(c) The commissioner may impose a penalty of up
to $200 $600 payable to the assigned risk safety account against
a party who does not timely release data as required in this
section. A party who does not treat this data as private
pursuant to this section is guilty of a misdemeanor. This
paragraph applies only to written medical data which exists at
the time the request is made.
(d) Workers' compensation insurers and self-insured
employers may, for the sole purpose of identifying duplicate
billings submitted to more than one insurer, disclose to health
insurers, including all insurers writing insurance described in
section 60A.06, subdivision 1, clause (5)(a), nonprofit health
service plan corporations subject to chapter 62C, health
maintenance organizations subject to chapter 62D, and joint
self-insurance employee health plans subject to chapter 62H,
computerized information about dates, coded items, and charges
for medical treatment of employees and other medical billing
information submitted to them by an employee, employer, health
care provider, or other insurer in connection with a current
claim for compensation under this chapter, without prior
approval of any party to the claim. The data may not be used by
the health insurer for any other purpose whatsoever and must be
destroyed after verification that there has been no duplicative
billing. Any person who is the subject of the data which is
used in a manner not allowed by this section paragraph has a
cause of action for actual damages and punitive damages for a
minimum of $5,000.
Sec. 68. Minnesota Statutes 1994, section 176.139,
subdivision 2, is amended to read:
Subd. 2. [FAILURE TO POST; PENALTY.] The commissioner may
assess a penalty of $300 $500 against the employer payable to
the assigned risk safety account if, after notice from the
commissioner, the employer violates the posting requirement of
this section.
Sec. 69. Minnesota Statutes 1994, section 176.181,
subdivision 7, is amended to read:
Subd. 7. [PENALTY.] Any entity that is self-insured
pursuant to subdivision 2, and that knowingly violates any
provision of subdivision 2 or any rule adopted pursuant thereto
is subject to a civil penalty of not more than $5,000 $10,000
for each offense.
Sec. 70. Minnesota Statutes 1994, section 176.181,
subdivision 8, is amended to read:
Subd. 8. [DATA SHARING.] (a) The departments of labor and
industry, economic security, human services, agriculture,
transportation, and revenue are authorized to share information
regarding the employment status of individuals, including but
not limited to payroll and withholding and income tax
information, and may use that information for purposes
consistent with this section and regarding the employment or
employer status of individuals, partnerships, limited liability
companies, corporations, or employers, including, but not
limited to, general contractors, intermediate contractors, and
subcontractors. The commissioner shall request data in writing
and the responding department shall respond to the request by
producing the requested data within 30 days.
(b) The commissioner is authorized to inspect and to order
the production of all payroll and other business records and
documents of any alleged employer in order to determine the
employment status of persons and compliance with this section.
If any person or employer refuses to comply with such an order,
the commissioner may apply to the district court of the county
where the person or employer is located for an order compelling
production of the documents.
Sec. 71. [176.1812] [COLLECTIVE BARGAINING AGREEMENTS.]
Subdivision 1. [REQUIREMENTS.] Upon appropriate filing,
the commissioner, compensation judge, workers' compensation
court of appeals, and courts shall recognize as valid and
binding a provision in a collective bargaining agreement between
a qualified employer or qualified groups of employers engaged in
construction, construction maintenance, and related activities
and the certified and exclusive representative of its employees
to establish certain obligations and procedures relating to
workers' compensation. For purposes of this section, "qualified
employer" means any self-insured employer, any employer, through
itself or any affiliate as defined in section 60D.15,
subdivision 2, who is responsible for the first $100,000 or more
of any claim, or a private employer developing or projecting an
annual workers' compensation premium, in Minnesota, of $250,000
or more. For purposes of this section, a "qualified group of
employers" means a group of private employers engaged in
workers' compensation group self-insurance complying with
section 79A.03, subdivision 6, which develops or projects annual
workers' compensation insurance premiums of $2,000,000 or more.
This agreement must be limited to, but need not include, all of
the following:
(a) an alternative dispute resolution system to supplement,
modify, or replace the procedural or dispute resolution
provisions of this chapter. The system may include mediation,
arbitration, or other dispute resolution proceedings, the
results of which may be final and binding upon the parties. A
system of arbitration shall provide that the decision of the
arbiter is subject to review either by the workers' compensation
court of appeals in the same manner as an award or order of a
compensation judge or, in lieu of review by the workers'
compensation court of appeals, by the office of administrative
hearings, by the district court, by the Minnesota court of
appeals, or by the supreme court in the same manner as the
workers' compensation court of appeals and may provide that any
arbiter's award disapproved by a court be referred back to the
arbiter for reconsideration and possible modification;
(b) an agreed list of providers of medical treatment that
may be the exclusive source of all medical and related treatment
provided under this chapter which need not be certified under
section 176.1351;
(c) the use of a limited list of impartial physicians to
conduct independent medical examinations;
(d) the creation of a light duty, modified job, or return
to work program;
(e) the use of a limited list of individuals and companies
for the establishment of vocational rehabilitation or retraining
programs which list is not subject to the requirements of
section 176.102;
(f) the establishment of safety committees and safety
procedures; or
(g) the adoption of a 24-hour health care coverage plan if
a 24-hour plan pilot project is authorized by law, according to
the terms and conditions authorized by that law.
Subd. 2. [FILING AND REVIEW.] A copy of the agreement and
the approximate number of employees who will be covered under it
must be filed with the commissioner. Within 21 days of receipt
of an agreement, the commissioner shall review the agreement for
compliance with this section and the benefit provisions of this
chapter and notify the parties of any additional information
required or any recommended modification that would bring the
agreement into compliance. Upon receipt of any requested
information or modification, the commissioner must notify the
parties within 21 days whether the agreement is in compliance
with this section and the benefit provisions of this chapter.
In order for any agreement to remain in effect, it must
provide for a timely and accurate method of reporting to the
commissioner necessary information regarding service cost and
utilization to enable the commissioner to annually report to the
legislature. The information provided to the commissioner must
include aggregate data on the:
(i) person hours and payroll covered by agreements filed;
(ii) number of claims filed;
(iii) average cost per claim;
(iv) number of litigated claims, including the number of
claims submitted to arbitration, the workers' compensation court
of appeals, the office of administrative hearings, the district
court, the Minnesota court of appeals or the supreme court;
(v) number of contested claims resolved prior to
arbitration;
(vi) projected incurred costs and actual costs of claims;
(vii) employer's safety history;
(viii) number of workers participating in vocational
rehabilitation; and
(ix) number of workers participating in light-duty programs.
Subd. 3. [REFUSAL TO RECOGNIZE.] A person aggrieved by the
commissioner's decision concerning an agreement may request in
writing, within 30 days of the date the notice is issued, the
initiation of a contested case proceeding under chapter 14. The
request to initiate a contested case must be received by the
department by the 30th day after the commissioner's decision.
An appeal from the commissioner's final decision and order may
be taken to the workers' compensation court of appeals pursuant
to sections 176.421 and 176.442.
Subd. 4. [VOID AGREEMENTS.] Nothing in this section shall
allow any agreement that diminishes an employee's entitlement to
benefits as otherwise set forth in this chapter. For the
purposes of this section, the procedural rights and dispute
resolution agreements under subdivision 1, clauses (a) to (g),
are not agreements which diminish an employee's entitlement to
benefits. Any agreement that diminishes an employee's
entitlement to benefits as set forth in this chapter is null and
void.
Subd. 5. [NOTICE TO INSURANCE CARRIER.] If the employer is
insured under this chapter, the collective bargaining agreement
provision shall not be recognized by the commissioner,
compensation judge, workers' compensation court of appeals, and
other courts unless the employer has given notice to the
employer's insurance carrier, in the manner provided in the
insurance contract, of intent to enter into an agreement with
its employees as provided in this section.
Subd. 6. [PILOT PROGRAM.] The commissioner shall establish
a pilot program ending December 31, 2001, in which up to ten
private and up to ten public employers shall be authorized to
enter into valid agreements under this section with their
employees. The agreements shall be recognized and enforced as
provided by this section. Employers shall participate in the
pilot program through collectively bargained agreements with the
certified and exclusive representatives of their employees and
without regard to the dollar insurance premium limitations in
subdivision 1.
Subd. 7. [RULES.] The commissioner may adopt emergency or
permanent rules necessary to implement this section.
Sec. 72. Minnesota Statutes 1994, section 176.182, is
amended to read:
176.182 [BUSINESS LICENSES OR PERMITS; COVERAGE REQUIRED.]
Every state or local licensing agency shall withhold the
issuance or renewal of a license or permit to operate a business
in Minnesota until the applicant presents acceptable evidence of
compliance with the workers' compensation insurance coverage
requirement of section 176.181, subdivision 2, by providing the
name of the insurance company, the policy number, and dates of
coverage or the permit to self-insure. The commissioner shall
assess a penalty to the employer of $1,000 $2,000 payable to the
assigned risk safety account, if the information is not reported
or is falsely reported.
Neither the state nor any governmental subdivision of the
state shall enter into any contract for the doing of any public
work before receiving from all other contracting parties
acceptable evidence of compliance with the workers' compensation
insurance coverage requirement of section 176.181, subdivision 2.
This section shall not be construed to create any liability
on the part of the state or any governmental subdivision to pay
workers' compensation benefits or to indemnify the special
compensation fund, an employer, or insurer who pays workers'
compensation benefits.
Sec. 73. Minnesota Statutes 1994, section 176.183,
subdivision 1, is amended to read:
Subdivision 1. When any employee sustains an injury
arising out of and in the course of employment while in the
employ of an employer, other than the state or its political
subdivisions, not insured or self-insured as provided for in
this chapter, the employee or the employee's dependents shall
nevertheless receive benefits as provided for in this chapter
from the special compensation fund. As used in subdivision 1 or
2, "employer" includes any owners or officers of a corporation
who direct and control the activities of employees. In any
petition for benefits under this chapter, the naming of an
employer corporation not insured or self-insured as provided for
in this chapter, as a defendant, shall constitute without more
the naming of the owners or officers as defendants, and service
of notice of proceeding under this chapter on the corporation
shall constitute service upon the owners or officers. An action
to recover benefits paid shall be instituted unless the
commissioner determines that no recovery is possible. There
shall be no payment from the special compensation fund if there
is liability for the injury under the provisions of section
176.215, by an insurer or self-insurer.
Sec. 74. Minnesota Statutes 1994, section 176.183,
subdivision 2, is amended to read:
Subd. 2. After a hearing on a petition for benefits and
prior to issuing an order against the special compensation fund
to pay compensation benefits to an employee, a compensation
judge shall first make findings regarding the insurance status
of the employer and its liability. The special compensation
fund shall not be found liable in the absence of a finding of
liability against the employer. Where the liable employer is
found after the hearing to be not insured or self-insured as
provided for in this chapter, the compensation judge shall
assess and order the employer to pay all compensation benefits
to which the employee is entitled, the amount for actual and
necessary disbursements expended by the special compensation
fund, and a penalty in the amount of 60 65 percent of all
compensation benefits ordered to be paid. An The award issued
against an employer after the hearing shall constitute a lien
for government services pursuant to section 514.67 on all
property of the employer and shall be subject to the provisions
of the revenue recapture act in chapter 270A. The special
compensation fund may enforce the terms of that award in the
same manner as a district court judgment. The commissioner of
labor and industry, in accordance with the terms of the order
awarding compensation, shall pay compensation to the employee or
the employee's dependent from the special compensation fund.
The commissioner of labor and industry shall certify to the
commissioner of finance and to the legislature annually the
total amount of compensation paid from the special compensation
fund under subdivision 1. The commissioner of finance shall
upon proper certification reimburse the special compensation
fund from the general fund appropriation provided for this
purpose. The amount reimbursed shall be limited to the
certified amount paid under this section or the appropriation
made for this purpose, whichever is the lesser amount.
Compensation paid under this section which is not reimbursed by
the general fund shall remain a liability of the special
compensation fund and shall be financed by the percentage
assessed under section 176.129.
Sec. 75. Minnesota Statutes 1994, section 176.185,
subdivision 5a, is amended to read:
Subd. 5a. [PENALTY FOR IMPROPER WITHHOLDING.] An employer
who violates subdivision 5 after notice from the commissioner is
subject to a penalty of 200 400 percent of the amount withheld
from or charged the employee. The penalty shall be imposed by
the commissioner. Fifty Forty percent of this penalty is
payable to the assigned risk safety account and 50 60 percent is
payable to the employee.
Sec. 76. Minnesota Statutes 1994, section 176.191,
subdivision 1, is amended to read:
Subdivision 1. [ORDER; EMPLOYER, INSURER, OR SPECIAL
COMPENSATION FUND PAYMENT.] Where compensation benefits are
payable under this chapter, and a dispute exists between two or
more employers or two or more insurers or the special
compensation fund as to which is liable for payment, the
commissioner, compensation judge, or court of appeals upon
appeal shall direct, unless action is taken under subdivision 2,
that one or more of the employers or insurers or the special
compensation fund make payment of the benefits pending a
determination of which has liability. The special compensation
fund may be ordered to make payment only if it has been made a
party to the claim because the petitioner has alleged that one
or more of the employers is uninsured for workers' compensation
under section 176.183. A temporary order may be issued under
this subdivision whether or not the employers or, insurers, or
special compensation fund agree to pay under the order.
When liability has been determined, the party held liable
for the benefits shall be ordered to reimburse any other party
for payments which the latter has made, including interest at
the rate of 12 percent a year. The claimant shall also be
awarded a reasonable attorney fee, to be paid by the party held
liable for the benefits.
An order directing payment of benefits pending a
determination of liability may not be used as evidence before a
compensation judge, the workers' compensation court of appeals,
or court in which the dispute is pending.
Sec. 77. Minnesota Statutes 1994, section 176.191, is
amended by adding a subdivision to read:
Subd. 1a. [EQUITABLE APPORTIONMENT.] Equitable
apportionment of liability for an injury under this chapter is
not allowed except that apportionment among employers and
insurers is allowed in a settlement agreement filed pursuant to
section 176.521, and an employer or insurer may request
equitable apportionment of liability for workers' compensation
benefits among employer and insurers by arbitration pursuant to
subdivision 5. For purposes of this subdivision, the term
"equitable apportionment of liability" shall include all
attempts to obtain contribution and/or reimbursement from other
employers or insurers. To the same extent limited by this
subdivision, contribution and reimbursement actions based on
equitable apportionment are not allowed under this chapter. If
the insurers choose to arbitrate apportionment, contribution, or
reimbursement issues pursuant to subdivision 5, the arbitration
proceeding is for the limited purpose of apportioning liability
for workers' compensation benefits payable among employers and
insurers. This subdivision applies without regard to whether
one or more of the injuries results from cumulative trauma or a
specific injury, but does not apply to an occupational disease.
In the case of an occupational disease, section 176.66 applies.
In the arbitration of equitable apportionment under subdivision
5, the parties and the arbitrator must be guided by general
rules of arbitrator selection and presumptive apportionment
among employers and insurers that are developed and approved by
the commissioner of the department of labor and industry.
Apportionment against preexisting disability is allowed only for
permanent partial disability as provided in section 176.101,
subdivision 4a. Nothing in this subdivision shall be
interpreted to repeal or in any way affect the law with respect
to special compensation fund statutory liability or benefits.
Sec. 78. Minnesota Statutes 1994, section 176.191,
subdivision 5, is amended to read:
Subd. 5. [ARBITRATION.] Where a dispute exists between an
employer, insurer, the special compensation fund, the reopened
case fund, or the workers' compensation reinsurance association,
regarding apportionment of liability for benefits payable under
this chapter, the dispute and the requesting party has expended
over $10,000 in medical or 52 weeks worth of indemnity benefits
and made the request within one year thereafter, a party may be
submitted with consent of all interested parties require
submission of the dispute as to apportionment of liability among
employers and insurers to binding arbitration. The decision of
the arbitrator shall be conclusive with respect to all issues
presented except as provided in subdivisions 6 and 7 on the
issue of apportionment among employers and insurers. 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. 79. Minnesota Statutes 1994, section 176.191,
subdivision 8, is amended to read:
Subd. 8. [ATTORNEY FEES.] No attorney's fees shall be
awarded under either section 176.081, subdivision 8, or 176.191
against any employer or insurer in connection with any
arbitration proceeding unless the employee chooses to retain an
attorney to represent the employee's interests during
arbitration.
Sec. 80. Minnesota Statutes 1994, section 176.194,
subdivision 4, is amended to read:
Subd. 4. [PENALTIES.] The penalties for violations of
subdivision 3, clauses (1) through (6), are as follows:
1st through 5th violation
of each paragraph written warning
6th through 10th violation $2,500 $3,000 per
of each paragraph violation
in excess of five
11th through 30th violation $5,000 per violation
11 or more violations $6,000 per violation
of each paragraph in excess of ten
For violations of subdivision 3, clauses (7) and (8), the
penalties are:
1st through 5th violation
of each paragraph $2,500 $3,000 per
violation
6th through 30th violation $5,000 per violation
6 or more violations $6,000 per violation
of each paragraph in excess of five
The penalties under this section may be imposed in addition
to other penalties under this chapter that might apply for the
same violation. The penalties under this section are assessed
by the commissioner and are payable to the assigned risk safety
account. A party may object to the penalty and request a formal
hearing under section 176.85. If an entity has more than 30
violations within any 12-month period, in addition to the
monetary penalties provided, the commissioner may refer the
matter to the commissioner of commerce with recommendation for
suspension or revocation of the entity's (a) license to write
workers' compensation insurance; (b) license to administer
claims on behalf of a self-insured, the assigned risk plan, or
the Minnesota insurance guaranty association; (c) authority to
self-insure; or (d) license to adjust claims. The commissioner
of commerce shall follow the procedures specified in section
176.195.
Sec. 81. Minnesota Statutes 1994, section 176.215, is
amended by adding a subdivision to read:
Subd. 1a. [ENFORCEMENT OF ORDER.] If the compensation
judge orders the general contractor, intermediate contractor, or
subcontractor to pay compensation benefits, the award issued
against the general contractor, intermediate contractor, or
subcontractor constitutes a lien for government services under
section 514.67 on all property of the general contractor,
intermediate contractor, or subcontractor and is subject to the
provisions of the revenue recapture act under chapter 270A. The
special compensation fund may enforce the terms of the award in
the same manner as a district court judgment.
Sec. 82. Minnesota Statutes 1994, 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 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 30 60 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 30 60 days
of notice or knowledge. After the 30-day 60-day 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.
Sec. 83. Minnesota Statutes 1994, section 176.221,
subdivision 3, is amended to read:
Subd. 3. [PENALTY.] If the employer or insurer does not
begin payment of compensation within the time limit prescribed
under subdivision 1 or 8, the commissioner may assess a penalty,
payable to the assigned risk safety account, which shall be a
percentage of the amount of compensation to which the employee
is entitled to receive up to the date compensation payment is
made.
The amount of penalty shall be determined as follows:
Numbers of days late Penalty
1 - 15 25 30 percent of
compensation due,
not to exceed $375
$500,
16 - 30 50 55 percent of
compensation due,
not to exceed $1,140
$1,500,
31 - 60 75 80 percent of
compensation due,
not to exceed $2,878
$3,500,
61 or more 100 105 percent of
compensation due,
not to exceed $3,838
$5,000.
The penalty under this section is in addition to any
penalty otherwise provided by statute.
Sec. 84. Minnesota Statutes 1994, section 176.221,
subdivision 3a, is amended to read:
Subd. 3a. [PENALTY.] In lieu of any other penalty under
this section, the commissioner may assess a penalty of up
to $1,000 $2,000 payable to the assigned risk safety account for
each instance in which an employer or insurer does not pay
benefits or file a notice of denial of liability within the time
limits prescribed under this section.
Sec. 85. Minnesota Statutes 1994, section 176.221,
subdivision 7, is amended to read:
Subd. 7. [INTEREST.] Any payment of compensation, charges
for treatment under section 176.135, rehabilitation expenses
under section 176.102, subdivision 9, or penalties assessed
under this chapter not made when due shall bear interest at the
rate of eight percent a year from the due date to the date the
payment is made or at the rate set by section 549.09,
subdivision 1, whichever is greater.
For the purposes of this subdivision, permanent partial
disability payment is due 14 days after receipt of the first
medical report which contains a disability rating if such
payment is otherwise due under this chapter, and charges for
treatment under section 176.135 are due 30 calendar days after
receiving the bill and necessary medical data.
If the claim of the employee or dependent for compensation
is contested in a proceeding before a compensation judge or the
commissioner, the decision of the judge or commissioner shall
provide for the payment of unpaid interest on all compensation
awarded, including interest accruing both before and after the
filing of the decision.
Sec. 86. [176.223] [PROMPT PAYMENT REPORT.]
The department shall publish an annual report providing
data on the promptness of all insurers and self-insurers in
making first payments on a claim for injury. The report shall
identify all insurers and self-insurers and state the percentage
of first payments made within 14 days from the last date worked
for each of the insurers and self-insurers. The report shall
also list the total number of claims and the number of claims
paid within the 14-day standard. Each report shall contain the
required information for each of the last four years the report
has been compiled so that a total of five years is included.
The department shall make the report available to employers and
shall provide a copy to each insurer and self-insurer listed in
the report for the current year.
Sec. 87. Minnesota Statutes 1994, section 176.225,
subdivision 1, is amended to read:
Subdivision 1. [GROUNDS.] Upon reasonable notice and
hearing or opportunity to be heard, the commissioner, a
compensation judge, or upon appeal, the court of appeals or the
supreme court may shall award compensation, in addition to the
total amount of compensation award, of up to 25 30 percent of
that total amount where an employer or insurer has:
(a) instituted a proceeding or interposed a defense which
does not present a real controversy but which is frivolous or
for the purpose of delay; or,
(b) unreasonably or vexatiously delayed payment; or,
(c) neglected or refused to pay compensation; or,
(d) intentionally underpaid compensation; or
(e) frivolously denied a claim; or
(f) unreasonably or vexatiously discontinued compensation
in violation of sections 176.238 and 176.239.
For the purpose of this section, "frivolously" means
without a good faith investigation of the facts or on a basis
that is clearly contrary to fact or law.
Sec. 88. Minnesota Statutes 1994, section 176.225,
subdivision 5, is amended to read:
Subd. 5. [PENALTY.] Where the employer is guilty of
inexcusable delay in making payments, the payments which are
found to be delayed shall be increased by ten 25 percent.
Withholding amounts unquestionably due because the injured
employee refuses to execute a release of the employee's right to
claim further benefits will be regarded as inexcusable delay in
the making of compensation payments. If any sum ordered by the
department to be paid is not paid when due, and no appeal of the
order is made, the sum shall bear interest at the rate of 12
percent per annum. Any penalties paid pursuant to this section
shall not be considered as a loss or expense item for purposes
of a petition for a rate increase made pursuant to chapter 79.
Sec. 89. Minnesota Statutes 1994, section 176.231,
subdivision 10, is amended to read:
Subd. 10. [FAILURE TO FILE REQUIRED REPORT, PENALTY.] If
an employer, insurer, physician, chiropractor, or other health
provider fails to file with the commissioner any report required
by this section in the manner and within the time limitations
prescribed, or otherwise fails to provide a report required by
this section in the manner provided by this section, the
commissioner may impose a penalty of up to $200 $500 for each
failure.
The imposition of a penalty may be appealed to a
compensation judge within 30 days of notice of the penalty.
Penalties collected by the state under this subdivision
shall be paid into the assigned risk safety account.
Sec. 90. Minnesota Statutes 1994, section 176.238,
subdivision 6, is amended to read:
Subd. 6. [EXPEDITED HEARING BEFORE A COMPENSATION JUDGE.]
A hearing before a compensation judge shall be held within 30 60
calendar days after the office receives the file from the
commissioner if:
(a) an objection to discontinuance has been filed under
subdivision 4 within 60 calendar days after the notice of
discontinuance was filed and where no administrative conference
has been held;
(b) an objection to discontinuance has been filed under
subdivision 4 within 60 calendar days after the commissioner's
decision under this section has been issued;
(c) a petition to discontinue has been filed by the insurer
in lieu of filing a notice of discontinuance; or
(d) a petition to discontinue has been filed within 60
calendar days after the commissioner's decision under this
section has been issued.
If the petition or objection is filed later than the
deadlines listed above, the expedited procedures in this section
apply only where the employee is unemployed at the time of
filing the objection and shows, to the satisfaction of the chief
administrative judge, by sworn affidavit, that the failure to
file the objection within the deadlines was due to some
infirmity or incapacity of the employee or to circumstances
beyond the employee's control. The hearing shall be limited to
the issues raised by the notice or petition unless all parties
agree to expanding the issues. If the issues are expanded, the
time limits for hearing and issuance of a decision by the
compensation judge under this subdivision shall not apply.
Once a hearing date has been set, a continuance of the
hearing date will be granted only under the following
circumstances:
(a) the employer has agreed, in writing, to a continuation
of the payment of benefits pending the outcome of the hearing;
or
(b) the employee has agreed, in a document signed by the
employee, that benefits may be discontinued pending the outcome
of the hearing.
Absent a clear showing of surprise at the hearing or the
unexpected unavailability of a crucial witness, all evidence
must be introduced at the hearing. If it is necessary to accept
additional evidence or testimony after the scheduled hearing
date, it must be submitted no later than 14 days following the
hearing, unless the compensation judge, for good cause,
determines otherwise.
The compensation judge shall issue a decision pursuant to
this subdivision within 30 days following the close of the
hearing record.
Sec. 91. Minnesota Statutes 1994, section 176.238,
subdivision 10, is amended to read:
Subd. 10. [FINES; VIOLATION.] An employer who violates
requirements set forth in this section or section 176.239 is
subject to a fine of up to $500 $1,000 for each violation
payable to the special compensation fund.
Sec. 92. Minnesota Statutes 1994, section 176.261, is
amended to read:
176.261 [EMPLOYEE OF COMMISSIONER OF THE DEPARTMENT OF
LABOR AND INDUSTRY MAY ACT FOR AND ADVISE A PARTY TO A
PROCEEDING.]
When requested by an employer or an employee or an
employee's dependent, the commissioner of the department of
labor and industry may designate one or more of the division
employees to advise that party of rights under this chapter, and
as far as possible to assist in adjusting differences between
the parties. The person so designated may appear in person in
any proceedings under this chapter as the representative or
adviser of the party. In such case, the party need not be
represented by an attorney at law.
Prior to advising an employee or employer to seek
assistance outside of the department, the department must refer
employers and employees seeking advice or requesting assistance
in resolving a dispute to an attorney or rehabilitation and
medical specialist employed by the department, whichever is
appropriate.
The department must make efforts to settle problems of
employees and employers by contacting third parties, including
attorneys, insurers, and health care providers, on behalf of
employers and employees and using the department's persuasion to
settle issues quickly and cooperatively. The obligation to make
efforts to settle problems exists whether or not a formal claim
has been filed with the department.
Sec. 93. Minnesota Statutes 1994, section 176.2615,
subdivision 7, is amended to read:
Subd. 7. [DETERMINATION.] If the parties do not agree to a
settlement, the settlement judge shall summarily hear and
determine the issues and issue an order in accordance with
section 176.305, subdivision 1a., except that there is no appeal
or request for a formal de novo hearing from the order. Any
determination by a settlement judge may not be considered as
evidence in any other proceeding and the issues decided are not
res judicata in any other proceeding shall be res judicata in
subsequent proceeding concerning issues determined under this
section.
Sec. 94. Minnesota Statutes 1994, section 176.275,
subdivision 1, is amended to read:
Subdivision 1. [FILING.] If a document is required to be
filed by this chapter or any rules adopted pursuant to authority
granted by this chapter, the filing shall be completed by the
receipt of the document at the division, department, office, or
the court of appeals. The division, department, office, and the
court of appeals shall accept any document which has been
delivered to it for legal filing immediately upon its receipt,
but may refuse to accept any form or document that lacks the
name of the injured employee, employer, or insurer, the date of
injury, or the injured employee's social security number. If
the injured employee has fewer than three days of lost time from
work, the party submitting the required document must attach to
it, at the time of filing, a copy of the first report of injury.
A notice or other document required to be served or filed
at either the department, the office, or the court of appeals
which is inadvertently served or filed at the wrong one of these
agencies shall be deemed to have been served or filed with the
proper agency. The receiving agency shall note the date of
receipt of a document and shall forward the documents to the
proper agency no later than two working days following receipt.
Sec. 95. Minnesota Statutes 1994, section 176.281, is
amended to read:
176.281 [ORDERS, DECISIONS, AND AWARDS; FILING; SERVICE.]
When the commissioner or compensation judge or office of
administrative hearings or the workers' compensation court of
appeals has rendered a final order, decision, or award, or
amendment to an order, decision, or award, it shall be filed
immediately with the commissioner. If the commissioner,
compensation judge, office of administrative hearings, or
workers' compensation court of appeals has rendered a final
order, decision, or award, or amendment thereto, the
commissioner or the office of administrative hearings or the
workers' compensation court of appeals shall immediately serve a
copy upon every party in interest, together with a notification
of the date the order was filed.
On all orders, decisions, awards, and other documents, the
commissioner or compensation judge or office of administrative
hearings or the workers' compensation court of appeals may
digitize the signatures of all officials, including judges, for
the use of electronic data interchange and clerical automation.
These signatures shall have the same legal authority of an
original signature, provided that proper security is used to
safeguard the use of the digitized signatures and each digitized
signature has been certified by the division, department,
office, or court of appeals before its use, in accordance with
rules adopted by that agency or court.
Sec. 96. Minnesota Statutes 1994, section 176.285, is
amended to read:
176.285 [SERVICE OF PAPERS AND NOTICES.]
Service of papers and notices shall be by mail or otherwise
as the commissioner or the chief administrative law judge may by
rule direct. Where service is by mail, service is effected at
the time mailed if properly addressed and stamped. If it is so
mailed, it is presumed the paper or notice reached the party to
be served. However, a party may show by competent evidence that
that party did not receive it or that it had been delayed in
transit for an unusual or unreasonable period of time. In case
of nonreceipt or delay, an allowance shall be made for the
party's failure to assert a right within the prescribed time.
Where service to the division, department, office, or court
of appeals is by electronic filing, digitized signatures may be
used provided that the signature has been certified by the
department no later than five business days after filing. The
department or court may adopt rules for the certification of
signatures.
When the electronic filing of a legal document with the
department marks the beginning of a prescribed time for another
party to assert a right, the prescribed time for another party
to assert a right shall be lengthened by two calendar days when
it can be shown that service to the other party was by mail.
The commissioner and the chief administrative law judge
shall ensure that proof of service of all papers and notices
served by their respective agencies is placed in the official
file of the case.
Sec. 97. Minnesota Statutes 1994, section 176.291, is
amended to read:
176.291 [DISPUTES; PETITIONS; PROCEDURE.]
Where there is a dispute as to a question of law or fact in
connection with a claim for compensation, a party may serve on
all other parties and file a notarized petition with the
commissioner stating the matter in dispute. The petition shall
be on a form prescribed by the commissioner and shall be signed
by the petitioner.
The petition shall also state and include, where applicable:
(1) names and residence or business address of parties;
(2) facts relating to the employment at the time of injury,
including amount of wages received;
(3) extent and character of injury;
(4) notice to or knowledge by employer of injury;
(5) copies of written medical reports or other information
in support of the claim;
(6) names and addresses of all known witnesses intended to
be called in support of the claim;
(7) the desired location of any hearing and estimated time
needed to present evidence at the hearing;
(8) any requests for a prehearing or settlement conference;
(9) a list of all known third parties, including the
departments of human services and economic security, who may
have paid any medical bills or other benefits to the employee
for the injuries or disease alleged in the petition or for the
time the employee was unable to work due to the injuries or
disease, together with a listing of the amounts paid by each;
(10) the nature and extent of the claim; and
(11) a request for an expedited hearing which must include
an attached affidavit of significant financial hardship which
complies with the requirements of section 176.341, subdivision 6.
Incomplete petitions may be stricken from the calendar as
provided by section 176.305, subdivision 4. Within 30 days of a
request by a party, an employee who has filed a claim petition
pursuant to section 176.271 or this section shall furnish a list
of physicians and health care providers from whom the employee
has received treatment for the same or a similar condition as
well as authorizations to release relevant information, data,
and records to the requester. The petition may be stricken from
the calendar upon motion of a party for failure to timely
provide the required list of health care providers or
authorizations.
Sec. 98. Minnesota Statutes 1994, section 176.305,
subdivision 1a, is amended to read:
Subd. 1a. [SETTLEMENT AND PRETRIAL CONFERENCES; SUMMARY
DECISION.] The commissioner shall schedule a settlement
conference, if appropriate, within 60 days after receiving the
petition. All parties must appear at the conference, either
personally or by representative, must be prepared to discuss
settlement of all issues, and must be prepared to discuss or
present the information required by the joint rules of the
division and the office. If a representative appears on behalf
of a party, the representative must have authority to fully
settle the matter.
If settlement is not reached, the presiding officer may
require the parties to present copies of all documentary
evidence not previously filed and a summary of the evidence they
will present at a formal hearing. If appropriate, a written
summary decision shall be issued within ten days after the
conference stating the issues and a determination of each
issue. If a party fails to appear at the conference, all issues
may be determined contrary to the absent party's interest,
provided the party in attendance presents a prima facie case.
The summary decision is final unless a written request for
a formal hearing is served on all parties and filed with the
commissioner within 30 days after the date of service and filing
of the summary decision. Within ten days after receipt of the
request, the commissioner shall certify the matter to the office
for a de novo hearing. In proceedings under section 176.2615,
the summary decision is final and not subject to appeal or de
novo proceedings.
Sec. 99. Minnesota Statutes 1994, section 176.83,
subdivision 5, is amended to read:
Subd. 5. [TREATMENT STANDARDS FOR MEDICAL SERVICES.] In
consultation with the medical services review board or the
rehabilitation review panel, the commissioner shall adopt
emergency and permanent rules establishing standards and
procedures for health care provider treatment. The rules shall
apply uniformly to all providers including those providing
managed care under section 176.1351. The rules shall be used to
determine whether a provider of health care services and
rehabilitation services, including a provider of medical,
chiropractic, podiatric, surgical, hospital, or other services,
is performing procedures or providing services at a level or
with a frequency that is excessive, unnecessary, or
inappropriate under section 176.135, subdivision 1, based upon
accepted medical standards for quality health care and accepted
rehabilitation standards.
The rules shall include, but are not limited to, the
following:
(1) criteria for diagnosis and treatment of the most common
work-related injuries including, but not limited to, low back
injuries and upper extremity repetitive trauma injuries;
(2) criteria for surgical procedures including, but not
limited to, diagnosis, prior conservative treatment, supporting
diagnostic imaging and testing, and anticipated outcome
criteria;
(3) criteria for use of appliances, adoptive adaptive
equipment, and use of health clubs or other exercise facilities;
(4) criteria for diagnostic imaging procedures;
(5) criteria for inpatient hospitalization; and
(6) criteria for treatment of chronic pain.
If it is determined by the payer that the level, frequency
or cost of a procedure or service of a provider is excessive,
unnecessary, or inappropriate according to the standards
established by the rules, the provider shall not be paid for the
procedure, service, or cost by an insurer, self-insurer, or
group self-insurer, and the provider shall not be reimbursed or
attempt to collect reimbursement for the procedure, service, or
cost from any other source, including the employee, another
insurer, the special compensation fund, or any government
program unless the commissioner or compensation judge determines
at a hearing or administrative conference that the level,
frequency, or cost was not excessive under the rules in which
case the insurer, self-insurer, or group self-insurer shall make
the payment deemed reasonable.
A rehabilitation provider who is determined by the
rehabilitation review panel board, after hearing, to be
consistently performing procedures or providing services at an
excessive level or cost may be prohibited from receiving any
further reimbursement for procedures or services provided under
this chapter. A prohibition imposed on a provider under this
subdivision may be grounds for revocation or suspension of the
provider's license or certificate of registration to provide
health care or rehabilitation service in Minnesota by the
appropriate licensing or certifying body. The commissioner and
medical services review board shall review excessive,
inappropriate, or unnecessary health care provider treatment
under section 176.103, subdivision 2.
Sec. 100. Minnesota Statutes 1994, section 176.84,
subdivision 2, is amended to read:
Subd. 2. [PENALTY.] The commissioner or compensation judge
may impose a penalty of $300 $500 for each violation of
subdivision 1.
Sec. 101. [182.676] [SAFETY COMMITTEES.]
Every public or private employer of more than 25 employees
shall establish and administer a joint labor-management safety
committee.
Every public or private employer of 25 or fewer employees
shall establish and administer a safety committee if:
(1) the employer has a lost workday cases incidence rate in
the top ten percent of all rates for employers in the same
industry; or
(2) the workers' compensation premium classification
assigned to the greatest portion of the payroll for the employer
has a pure premium rate as reported by the workers' compensation
rating association in the top 25 percent of premium rates for
all classes.
A safety committee must hold regularly scheduled meetings
unless otherwise provided in a collective bargaining agreement.
Employee safety committee members must be selected by
employees. An employer that fails to establish or administer a
safety committee as required by this section may be cited by the
commissioner. A citation is punishable as a serious violation
under section 182.666.
The commissioner may adopt emergency or permanent rules
necessary to implement this section.
Sec. 102. Laws 1994, chapter 625, article 5, section 7, is
amended to read:
Sec. 7. [24-HOUR COVERAGE.]
As part of the implementation report submitted on January
1, 1996, as required under Minnesota Statutes, section 62Q.41,
The commissioners of commerce, health, and labor and industry
shall develop a 24-hour coverage plan incorporating and on a
pilot project basis, coordinating the health component medical
benefits of workers' compensation with health care coverage
benefits to be offered by an integrated service network, health
maintenance organization, or an insurer or self-insured employer
under Minnesota Statutes, chapters 62A, 62C, 62D, 62H, 62N, 79,
and 79A, and Minnesota Statutes, section 176.181. The
commissioners shall also make provide the plan and
recommendations of any legislative changes that may be needed to
implement this plan, to the legislature by January 1, 1996.
Sec. 103. [SMALL BUSINESS WORKERS' COMPENSATION SAFETY
PILOT PROJECT.]
The commissioner of commerce shall by January 1, 1996,
contract with the division of environmental and occupational
health of the school of public health of the University of
Minnesota for a pilot injury prevention project. The contract
shall require the department of environmental and occupational
health to consult and provide assistance about ergonomic
problems to small employers insured by the state assigned risk
plan. The consultative and assistance services shall focus on
employers having employees that can most benefit from the
consultation and assistance. The contract shall be for the
period January 1, 1996 to December 31, 1997. For the purpose of
this section, small employer means an employer with less than
500 employees.
Sec. 104. [SMALL BUSINESS INJURY AND ILLNESS PREVENTION
SURVEY.]
The division of environmental and occupational health of
the school of public health of the University of Minnesota shall
evaluate injury and illness prevention activities of small
business by surveying small businesses to assess the following:
(1) current use of occupational safety and health services
by small businesses;
(2) specific areas in which small business needs
assistance;
(3) in what form is desired assistance most helpful;
(4) what services are sponsored by public and public sector
programs;
(5) what measures exist to assess the effectiveness of
these programs; and
(6) how can these programs be best adapted by Minnesota.
The division shall provide technical assistance and advice
to small businesses as part of the survey process.
For the purpose of this section, small employer means a
employer with less than 500 employees.
The survey shall be completed by January 1, 1996. The
division shall report the survey results and any recommendations
to the legislature and the commissioner of labor and industry by
February 1, 1996.
Sec. 105. [LEGISLATIVE AUDITOR; ASSIGNED RISK EVALUATION.]
The legislative audit commission is requested to direct the
legislative auditor to conduct an evaluation of the assigned
risk plan created by Minnesota Statutes, sections 79.251 to
79.252. The evaluation shall include:
(1) whether the assigned risk plan should be organized and
operated in a different manner;
(2) the development of strategies that permits small safe
employers to receive the benefit of their safe workplace through
reduced premiums;
(3) safety practices of unsafe employers placed in the
assigned risk plan due to their own poor safety record or the
poor safety record of their industry;
(4) an analysis of the claims adjusting and reserving
practices of the plan; and
(5) a plan for the state fund mutual insurance company to
be the sole service company or insurer servicing policies or
contracts of coverage under the assigned risk plan.
The evaluation shall specifically focus on developing
alternative insurance techniques for small employers in the
assigned risk plan such as grouping or self-insurance that can
be utilized to reduce insurance premiums.
The legislative auditor shall report findings of the
evaluation to the legislature by January 15, 1996.
Sec. 106. [APPROPRIATION; SURVEY.]
$150,000 is appropriated from the assigned risk safety
account in the special compensation fund to the commissioner of
commerce for the biennium ending June 30, 1997, for the purpose
of the small business injury and illness prevention survey.
Sec. 107. [APPROPRIATION; SURVEY.]
$200,000 is appropriated for the biennium ending June 30,
1997, from the assigned risk safety account in the special
compensation fund to the board of regents of the University of
Minnesota for the purpose of the small business workers'
compensation safety pilot project.
Sec. 108. [APPROPRIATION.]
$960,000 is appropriated from the special compensation fund
to the department of labor and industry for the biennium ending
June 30, 1997, for the purposes of this act.
Sec. 109. [INCONSISTENT LAWS SUPERSEDED.]
Notwithstanding the order of final enactment, the
amendments to Minnesota Statutes, section 175.16, by this act,
supersede any conflicting provision of law enacted by the 1995
regular legislative session.
Sec. 110. [REPEALER.]
Minnesota Statutes 1994, sections 79.53, subdivision 2;
79.54; 79.56, subdivision 2; 79.57; 79.58; 176.011, subdivision
26; 176.081, subdivisions 2, 5, and 8; 176.103, subdivision 2a;
176.132; 176.133; 176.191, subdivision 2; and 176.232, are
repealed.
Sec. 111. [EFFECTIVE DATE; TRANSITION.]
Sections 11 to 16 (79.52 to 79.60) are effective on January
1, 1996. Rates and rating plans in use as of January 1, 1996,
may continue to be used until such time as an amendment thereto
or a new rate or rating plan is filed, at which time such
submission shall be subject to this article.
Sec. 112. [EFFECTIVE DATE.]
Sections 43 (175.16), 58 (176.129, subd. 9), 63 (176.1351,
subd. 5), and 109 are effective the day following final
enactment. Sections 4 (79.085), 5 (79.211, subd. 1), 44 to 47
(176.011, subd. 16 to 176.081, subd. 7a), 57 (176.108), 79
(176.191, subd. 8), 82 to 92 (176.221, subd. 1 to 176.261), and
94 (176.275, subd. 1) are effective October 1, 1995. Sections 9
and 10 (79.34 and 79.35) are effective January 1, 1996. Section
51 (176.102, subd. 11) applies to a personal injury, as defined
under Minnesota Statutes, section 176.011, subdivision 16,
occurring on or after October 1, 1995. Sections 28 to 41
(79A.19 to 79A.32) are effective August 1, 1995. Sections 78
(176.191, subd. 1a) and 79 (176.191, subd. 5) are effective for
apportionment proceedings instituted after July 1, 1995.
Presented to the governor May 23, 1995
Signed by the governor May 25, 1995, 3:42 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes