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

CHAPTER 250--S.F.No. 3218
An act
relating to workers' compensation; adopting recommendations of the
Workers' Compensation Advisory Council;amending Minnesota Statutes 2006,
sections 176.011, subdivision 9; 176.041, subdivision 1; 176.101, subdivision
1; 176.102, subdivisions 2, 11; 176.135, by adding a subdivision; 176.136,
subdivisions 1a, 1b; 176.1812, subdivision 1; 176.183, subdivision 1; 176.185,
subdivision 8a; 176.231, subdivision 10; 176.245; 176.275, subdivision 1;
176.285; 176.83, subdivision 7; repealing Minnesota Statutes 2006, sections
176.1041; 176.669.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

    Section 1. Minnesota Statutes 2006, section 176.011, subdivision 9, is amended to read:
    Subd. 9. Employee. "Employee" means any person who performs services for
another for hire including the following:
(1) an alien;
(2) a minor;
(3) a sheriff, deputy sheriff, police officer, firefighter, county highway engineer, and
peace officer while engaged in the enforcement of peace or in the pursuit or capture of a
person charged with or suspected of crime;
(4) a person requested or commanded to aid an officer in arresting or retaking a
person who has escaped from lawful custody, or in executing legal process, in which
cases, for purposes of calculating compensation under this chapter, the daily wage of the
person shall be the prevailing wage for similar services performed by paid employees;
(5) a county assessor;
(6) an elected or appointed official of the state, or of a county, city, town, school
district, or governmental subdivision in the state. An officer of a political subdivision
elected or appointed for a regular term of office, or to complete the unexpired portion of a
regular term, shall be included only after the governing body of the political subdivision
has adopted an ordinance or resolution to that effect;
(7) an executive officer of a corporation, except those executive officers excluded
by section 176.041;
(8) a voluntary uncompensated worker, other than an inmate, rendering services in
state institutions under the commissioners of human services and corrections similar to
those of officers and employees of the institutions, and whose services have been accepted
or contracted for by the commissioner of human services or corrections as authorized by
law. In the event of injury or death of the worker, the daily wage of the worker, for the
purpose of calculating compensation under this chapter, shall be the usual wage paid at
the time of the injury or death for similar services in institutions where the services are
performed by paid employees;
(9) a voluntary uncompensated worker engaged in emergency management as
defined in section 12.03, subdivision 4, who is:
(i) registered with the state or any political subdivision of it, according to the
procedures set forth in the state or political subdivision emergency operations plan; and
(ii) acting under the direction and control of, and within the scope of duties approved
by, the state or political subdivision.
The daily wage of the worker, for the purpose of calculating compensation under this
chapter, shall be the usual wage paid at the time of the injury or death for similar services
performed by paid employees;
(10) a voluntary uncompensated worker participating in a program established by a
local social services agency. For purposes of this clause, "local social services agency"
means any agency established under section 393.01. In the event of injury or death of the
worker, the wage of the worker, for the purpose of calculating compensation under this
chapter, shall be the usual wage paid in the county at the time of the injury or death for
similar services performed by paid employees working a normal day and week;
(11) a voluntary uncompensated worker accepted by the commissioner of natural
resources who is rendering services as a volunteer pursuant to section 84.089. The daily
wage of the worker for the purpose of calculating compensation under this chapter, shall
be the usual wage paid at the time of injury or death for similar services performed by
paid employees;
(12) a voluntary uncompensated worker in the building and construction industry
who renders services for joint labor-management nonprofit community service projects.
The daily wage of the worker for the purpose of calculating compensation under this
chapter shall be the usual wage paid at the time of injury or death for similar services
performed by paid employees;
(13) a member of the military forces, as defined in section 190.05, while in state
active service, as defined in section 190.05, subdivision 5a. The daily wage of the member
for the purpose of calculating compensation under this chapter shall be based on the
member's usual earnings in civil life. If there is no evidence of previous occupation or
earning, the trier of fact shall consider the member's earnings as a member of the military
forces;
(14) a voluntary uncompensated worker, accepted by the director of the Minnesota
Historical Society, rendering services as a volunteer, pursuant to chapter 138. The daily
wage of the worker, for the purposes of calculating compensation under this chapter,
shall be the usual wage paid at the time of injury or death for similar services performed
by paid employees;
(15) a voluntary uncompensated worker, other than a student, who renders services
at the Minnesota State Academy for the Deaf or the Minnesota State Academy for the
Blind, and whose services have been accepted or contracted for by the commissioner of
education, as authorized by law. In the event of injury or death of the worker, the daily
wage of the worker, for the purpose of calculating compensation under this chapter, shall
be the usual wage paid at the time of the injury or death for similar services performed in
institutions by paid employees;
(16) a voluntary uncompensated worker, other than a resident of the veterans home,
who renders services at a Minnesota veterans home, and whose services have been
accepted or contracted for by the commissioner of veterans affairs, as authorized by law.
In the event of injury or death of the worker, the daily wage of the worker, for the purpose
of calculating compensation under this chapter, shall be the usual wage paid at the time of
the injury or death for similar services performed in institutions by paid employees;
(17) a worker who renders in-home attendant care services to a physically disabled
person, and who is paid directly by the commissioner of human services for these services,
shall be an employee of the state within the meaning of this subdivision, but for no other
purpose; performing services under section 256B.0655 for a recipient in the home of the
recipient or in the community under section 256B.0625, subdivision 19a, who is paid from
government funds through a fiscal intermediary under section 256B.0655, subdivision
7. For purposes of maintaining workers' compensation insurance, the employer of the
worker is as designated in law by the commissioner of the Department of Human Services,
notwithstanding any other law to the contrary.
(18) students enrolled in and regularly attending the Medical School of the
University of Minnesota in the graduate school program or the postgraduate program. The
students shall not be considered employees for any other purpose. In the event of the
student's injury or death, the weekly wage of the student for the purpose of calculating
compensation under this chapter, shall be the annualized educational stipend awarded to
the student, divided by 52 weeks. The institution in which the student is enrolled shall
be considered the "employer" for the limited purpose of determining responsibility for
paying benefits under this chapter;
(19) a faculty member of the University of Minnesota employed for an academic
year is also an employee for the period between that academic year and the succeeding
academic year if:
(a) the member has a contract or reasonable assurance of a contract from the
University of Minnesota for the succeeding academic year; and
(b) the personal injury for which compensation is sought arises out of and in the
course of activities related to the faculty member's employment by the University of
Minnesota;
(20) a worker who performs volunteer ambulance driver or attendant services is an
employee of the political subdivision, nonprofit hospital, nonprofit corporation, or other
entity for which the worker performs the services. The daily wage of the worker for the
purpose of calculating compensation under this chapter shall be the usual wage paid at the
time of injury or death for similar services performed by paid employees;
(21) a voluntary uncompensated worker, accepted by the commissioner of
administration, rendering services as a volunteer at the Department of Administration. In
the event of injury or death of the worker, the daily wage of the worker, for the purpose of
calculating compensation under this chapter, shall be the usual wage paid at the time of the
injury or death for similar services performed in institutions by paid employees;
(22) a voluntary uncompensated worker rendering service directly to the Pollution
Control Agency. The daily wage of the worker for the purpose of calculating compensation
payable under this chapter is the usual going wage paid at the time of injury or death for
similar services if the services are performed by paid employees;
(23) a voluntary uncompensated worker while volunteering services as a first
responder or as a member of a law enforcement assistance organization while acting under
the supervision and authority of a political subdivision. The daily wage of the worker for
the purpose of calculating compensation payable under this chapter is the usual going
wage paid at the time of injury or death for similar services if the services are performed
by paid employees; and
(24) a voluntary uncompensated member of the civil air patrol rendering service on
the request and under the authority of the state or any of its political subdivisions. The
daily wage of the member for the purposes of calculating compensation payable under this
chapter is the usual going wage paid at the time of injury or death for similar services if
the services are performed by paid employees.; and
(25) a Minnesota Responds Medical Reserve Corps volunteer, as provided in
sections 145A.04 and 145A.06, responding at the request of or engaged in training
conducted by the commissioner of health. The daily wage of the volunteer for the purposes
of calculating compensation payable under this chapter is established in section 145A.06.
A person who qualifies under this clause and who may also qualify under another clause
of this subdivision shall receive benefits in accordance with this clause.
If it is difficult to determine the daily wage as provided in this subdivision, the trier
of fact may determine the wage upon which the compensation is payable.
EFFECTIVE DATE.Clause (25) is effective the day that amendments to
Minnesota Statutes, sections 145A.04 to 145A.06, related to Medical Reserve Corps
volunteers, are effective. The other amendments to this section are effective the day
following final enactment.

    Sec. 2. Minnesota Statutes 2006, section 176.041, subdivision 1, is amended to read:
    Subdivision 1. Employments excluded. This chapter does not apply to any of
the following:
(a) a person employed by a common carrier by railroad engaged in interstate or
foreign commerce and who is covered by the Federal Employers' Liability Act, United
States Code, title 45, sections 51 to 60, or other comparable federal law;
(b) a person employed by a family farm as defined by section 176.011, subdivision
11a
;
(c) the spouse, parent, and child, regardless of age, of a farmer-employer working
for the farmer-employer;
(d) a sole proprietor, or the spouse, parent, and child, regardless of age, of a sole
proprietor;
(e) a partner engaged in a farm operation or a partner engaged in a business and the
spouse, parent, and child, regardless of age, of a partner in the farm operation or business;
(f) an executive officer of a family farm corporation;
(g) an executive officer of a closely held corporation having less than 22,880 hours
of payroll in the preceding calendar year, if that executive officer owns at least 25 percent
of the stock of the corporation;
(h) a spouse, parent, or child, regardless of age, of an executive officer of a family
farm corporation as defined in section 500.24, subdivision 2, and employed by that
family farm corporation;
(i) a spouse, parent, or child, regardless of age, of an executive officer of a closely
held corporation who is referred to in paragraph (g);
(j) another farmer or a member of the other farmer's family exchanging work with
the farmer-employer or family farm corporation operator in the same community;
(k) a person whose employment at the time of the injury is casual and not in the
usual course of the trade, business, profession, or occupation of the employer;
(l) persons who are independent contractors as defined by section 181.723 and any
rules adopted by the commissioner pursuant to section 176.83 except that this exclusion
does these exclusions do not apply to an employee of an independent contractor;
(m) an officer or a member of a veterans' organization whose employment
relationship arises solely by virtue of attending meetings or conventions of the veterans'
organization, unless the veterans' organization elects by resolution to provide coverage
under this chapter for the officer or member;
(n) a person employed as a household worker in, for, or about a private home
or household who earns less than $1,000 in cash in a three-month period from a single
private home or household provided that a household worker who has earned $1,000 or
more from the household worker's present employer in a three-month period within the
previous year is covered by this chapter regardless of whether or not the household worker
has earned $1,000 in the present quarter;
(o) persons employed by a closely held corporation who are related by blood or
marriage, within the third degree of kindred according to the rules of civil law, to an
officer of the corporation, who is referred to in paragraph (g), if the corporation files a
written election with the commissioner to exclude such individuals. A written election is
not required for a person who is otherwise excluded from this chapter by this section;
(p) a nonprofit association which does not pay more than $1,000 in salary or wages
in a year;
(q) persons covered under the Domestic Volunteer Service Act of 1973, as amended,
United States Code, title 42, sections 5011, et seq.;
(r) a manager of a limited liability company having ten or fewer members and
having less than 22,880 hours of payroll in the preceding calendar year, if that manager
owns at least a 25 percent membership interest in the limited liability company;
(s) a spouse, parent, or child, regardless of age, of a manager of a limited liability
company described in paragraph (r);
(t) persons employed by a limited liability company having ten or fewer members
and having less than 22,880 hours of payroll in the preceding calendar year who are related
by blood or marriage, within the third degree of kindred according to the rules of civil law,
to a manager of a limited liability company described in paragraph (r), if the company files
a written election with the commissioner to exclude these persons. A written election is
not required for a person who is otherwise excluded from this chapter by this section; or
(u) members of limited liability companies who satisfy the requirements of
paragraph (l).
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 3. Minnesota Statutes 2006, 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)(1) Commencing on October 1, 2000 2008, the maximum weekly compensation
payable is $750 $850 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 $130 per week or the injured
employee's actual weekly wage, whichever is less.
(d) Temporary total compensation shall be paid during the period of disability
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 104 130 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 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 130-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 104 130 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 104 130 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 104 130 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 104 130 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 130-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 this chapter.
(m) Once an employee has been paid 52 weeks of temporary total compensation,
the employer or insurer must notify the employee in writing of the 104-week 130-week
limitation on payment of temporary total compensation. A copy of this notice must also
be filed with the department.
EFFECTIVE DATE.This section is effective for injuries occurring on or after
October 1, 2008.

    Sec. 4. Minnesota Statutes 2006, section 176.102, subdivision 2, is amended to read:
    Subd. 2. Administrators. (a) The commissioner shall hire a director of
rehabilitation services in the classified service. The commissioner shall monitor and
supervise rehabilitation services, including, but not limited to, making determinations
regarding the selection and delivery of rehabilitation services and the criteria used to
approve qualified rehabilitation consultants and rehabilitation vendors. The commissioner
may also make determinations regarding fees for rehabilitation services and shall by
rule establish a fee schedule or otherwise limit fees charged by qualified rehabilitation
consultants and vendors. The commissioner shall annually review the fees and give notice
of any adjustment in the State Register. By March 1, 1993, the commissioner shall report
to the legislature on the status of the commission's monitoring of rehabilitation services.
The commissioner may hire qualified personnel to assist in the commissioner's duties
under this section and may delegate the duties and performance.
(b) On October 1, 2008, the maximum hourly rate for rehabilitation services under
Minnesota Rules, part 5220.1900, subpart 1c, is increased to $91, and the maximum
hourly rate for rehabilitation services under Minnesota Rules, part 5220.1900, subpart 1d,
is increased to $81. These increases are in lieu of the October 1, 2008, annual increase
authorized by Minnesota Rules, part 5220.1900, subpart 1b. The maximum hourly rate
and annual increase under Minnesota Rules, part 5220.1900, subpart 1e, and the hourly
rate reduction under Minnesota Rules, part 5220.1900, subpart 1f, are unchanged by
this paragraph.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 5. Minnesota Statutes 2006, 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 156 208
weeks of any combination of temporary total or temporary partial compensation have
been paid. Retraining shall not be available after 156 208 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 156
208 weeks of compensation have been paid.
(d) The employer or insurer must notify the employee in writing of the 156-week
208-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 commissioner for deposit in the assigned risk safety account.
EFFECTIVE DATE.This section is effective for injuries occurring on or after
October 1, 2008.

    Sec. 6. Minnesota Statutes 2006, section 176.135, is amended by adding a subdivision
to read:
    Subd. 1b. Complementary and alternative health care providers. Any service,
article, or supply provided by an unlicensed complementary and alternative health care
practitioner as defined in section 146A.01, subdivision 6, is not compensable under this
chapter.
EFFECTIVE DATE.This section is effective for treatment, services, articles, and
supplies provided on or after the day following final enactment for all dates of injury.

    Sec. 7. Minnesota Statutes 2006, section 176.136, subdivision 1a, is amended to read:
    Subd. 1a. Relative value fee schedule. (a) 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, remains 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, according to the
procedures in paragraph (h), clause (2), the relative value fee schedule tables adopted for
the federal Medicare program or a relative value fee schedule adopted by other federal
or state agencies. The relative value fee schedule must 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.
(b) Effective October 1, 2005, the commissioner shall remove all scaling factors
from the relative value units and establish four separate conversion factors according to
paragraphs (c) and (d) for each of the following parts of Minnesota Rules:
(1) Medical/surgical services in Minnesota Rules, part 5221.4030, as defined in part
5221.0700, subpart 3, item C, subitem (2);
(2) Pathology and laboratory services in Minnesota Rules, part 5221.4040, as
defined in part 5221.0700, subpart 3, item C, subitem (3);
(3) Physical medicine and rehabilitation services in Minnesota Rules, part
5221.4050, as defined in part 5221.0700, subpart 3, item C, subitem (4); and
(4) Chiropractic services in Minnesota Rules, part 5221.4060, as defined in part
5221.0700, subpart 3, item C, subitem (5).
(c) The four conversion factors established under paragraph (b) shall be calculated
so that there is no change in each maximum fee for each service under the current fee
schedule, except as provided in paragraphs (d) and (e).
(d) By October 1, 2006, the conversion factor for chiropractic services described in
paragraph (b), clause (4), shall be increased to equal 72 percent of the conversion factor
for medical/surgical services described in paragraph (b), clause (1). Beginning October 1,
2005, the increase in chiropractic conversion factor shall be phased in over two years by
approximately equal percentage point increases.
(e) When adjusting the conversion factors in accordance with paragraph (g) on
October 1, 2005, and October 1, 2006, the commissioner may adjust by no less than zero,
all of the conversion factors as necessary to offset any overall increase in payments under
the fee schedule resulting from the increase in the chiropractic conversion factor.
(f) The commissioner shall give notice of the relative value units and conversion
factors established under paragraphs (b), (c), and (d) according to the procedures in
section 14.386, paragraph (a). The relative value units and conversion factors established
under paragraphs (b), (c), and (d) are not subject to expiration under section 14.386,
paragraph (b)
.
(g) The conversion factors shall be adjusted as follows:
(1) 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.
(2) Each time the workers' compensation relative value fee schedule tables are
updated under paragraph (h), the commissioner shall adjust the conversion factors so that,
for services in both fee schedules, there is no difference between the overall payment in
each category of service listed in paragraph (b) under the new schedule and the overall
payment for that category under the workers' compensation fee schedule most recently
in effect. This adjustment must be made before making any additional adjustment under
clause (1).
(h) The commissioner shall give notice of the adjusted conversion factors and
updates to the relative value fee schedule as follows:
(1) 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 and any amendments to rules to
implement Medicare relative value tables incorporated by reference under this subdivision.
The notices of the adjusted conversion factors and additions, deletions, or changes to the
relative value units and service codes is in lieu of the requirements of chapter 14. The
commissioner shall follow the amended rules to implement the relative value tables are
subject to the requirements of section 14.386, paragraph (a). The annual adjustments to the
conversion factors and the medical fee schedules adopted under this section, including all
previous fee schedules, are not subject to expiration under section 14.386, paragraph (b).
(2) The commissioner shall periodically, but at least once every three years, update
the workers' compensation relative value tables by incorporating by reference the relative
value tables in the national physician fee schedule relative value file established by the
Centers for Medicare and Medicaid Services. The commissioner shall publish the notices
of the incorporation by reference in the State Register at least 60 days before the tables
are to become effective for purposes of payment under this section. Each notice of
incorporation must state the date the incorporated tables will become effective and must
include information on how the Medicare relative value tables may be obtained. The
published notices of incorporation by reference and the incorporated tables are not rules
subject to section 14.386 or other provisions of chapter 14, but have the force and effect of
law as of the date specified in the notices.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 8. Minnesota Statutes 2006, 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.
(d) An employer's liability for treatment, articles, and supplies provided under this
chapter by a health care provider located outside of Minnesota is limited to the payment
that the health care provider would receive if the treatment, article, or supply were paid
under the workers' compensation law of the jurisdiction in which the treatment was
provided.
EFFECTIVE DATE.This section is effective for treatment, services, articles, and
supplies provided on or after the day following final enactment for all dates of injury.

    Sec. 9. Minnesota Statutes 2006, section 176.1812, subdivision 1, is amended to read:
    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 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 that is self-insured for workers' compensation in compliance with this chapter,
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 any employer
developing or projecting an annual workers' compensation premium, in Minnesota,
of $250,000 or more that is insured for workers' compensation in compliance with this
chapter. 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 chapter 79A, or a group of private employers who purchase workers' compensation
insurance as a group, which develops or projects annual workers' compensation insurance
premiums of $2,000,000 or more., in which each employer is insured for workers'
compensation in compliance with this chapter or is self-insured for workers' compensation
in compliance with this chapter. 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.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 10. Minnesota Statutes 2006, section 176.183, subdivision 1, is amended to read:
    Subdivision 1. Uninsured and self-insured employers; special compensation
fund. 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. The commissioner is not required to comply
with the procedures in chapter 16C before purchasing, paying for, or reimbursing the
employee for medical treatment, equipment, or supplies that are compensable under this
chapter. 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.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 11. Minnesota Statutes 2006, section 176.185, subdivision 8a, is amended to read:
    Subd. 8a. Insolvent insurer. (a) If an insurer is or becomes insolvent as defined
in section 60C.03, subdivision 8, the insured employer is liable, as of May 23, 2003, for
payment of the compensable workers' compensation claims that were covered under the
employer's policy with the insolvent insurer, to the extent that the Insurance Guaranty
Association has determined that the claims are not covered claims under chapter 60C. This
paragraph does not in any way limit the Insurance Guaranty Association's right of recovery
from an employer under section 60C.11, subdivision 7, for workers' compensation claims
that are covered claims under chapter 60C.
The Insurance Guaranty Association shall notify the employer and the
commissioners of the Departments of Commerce and Labor and Industry of the
association's determination and of the employer's liability under this subdivision. The
association's failure to notify the employer or the commissioners shall not relieve the
employer of its liability and obligations under this subdivision.
(b) An employer who is liable for payment of claims under paragraph (a) shall
have all of the rights, responsibilities, and obligations of a self-insured employer
under this chapter for those claims only, but without the need for an order from the
commissioner of commerce. The employer shall not be self-insured for purposes of the
workers' compensation self-insurers' security fund under chapter 79A for those claims.
The employer shall not be required to pay assessments to the workers' compensation
self-insurers' security fund, and the security fund shall not be liable for the claims under
section 79A.10. Notwithstanding any contrary provision of chapter 60C, the Insurance
Guaranty Association shall pay the claims as covered claims under chapter 60C if the
employer fails to pay the claims as required under this chapter and the commissioner of
commerce determines that:
(1) determines that the employer is the subject of a voluntary or involuntary petition
under the United States Bankruptcy Code, title 11;
(2) determines that a court of competent jurisdiction has declared the employer
to be bankrupt or insolvent; or
(3) determines that the employer is insolvent.; or
(4) issues a certificate of default against the employer for failure to pay workers'
compensation benefits as required under this chapter.
The commissioner of labor and industry shall notify the commissioner of commerce
and the Insurance Guaranty Association if the commissioner of labor and industry has
knowledge that any employer has failed to pay, and will likely continue to fail to pay,
workers' compensation benefits as required by chapter 176. If clauses (1) to (3) do not
apply, but the employer refuses or fails to pay benefits required under this chapter, or
if there is a dispute about an employer's liability for the claims, the commissioner of
commerce shall issue a certificate of default.
The commissioner of commerce shall immediately notify, by certified mail, the
Insurance Guaranty Association of the occurrence of any of the circumstances in clauses
(1) to (4), and shall order the association to assume the employer's obligations under
this chapter. The association shall commence payment of these obligations as soon as
possible upon receipt of the employer's claim files. Upon the assumption of obligations by
the association pursuant to the commissioner of commerce's notification and order, the
association has the right to immediate possession of all relevant workers' compensation
claim files and data of the employer or other possessor of the files and data. The possessor
of the files and data must provide the files and data, or complete copies of them, to the
association within five days of the notification provided under this subdivision.
If the possessor of the files and data fails to timely provide the files and data to the
association, it is liable to the commissioner of commerce for a penalty of $500 per day for
each day after the five-day period has expired. The association is also entitled to recover
from the employer reasonable attorney fees and costs in administering and paying benefits
owed under this chapter. If the association's payments are made pursuant to a certificate of
default as provided in clause (4), the employer is also liable for and shall pay a penalty
in the amount of 300 percent of all benefits the association pays to or on behalf of the
employee. The commissioner of commerce shall assess the penalties under this paragraph.
An appeal from the commissioner of commerce's order or penalties under this
paragraph may be instituted pursuant to the contested case procedures of chapter 14.
Payment of claims by the association shall not be stayed pending the resolution of the
disputes.
(c) If the employer contracts with an entity or person to administer the claims
under paragraph (a), the entity or person must be a licensed workers' compensation
insurer or a licensed third-party administrator under section 60A.23, subdivision 8.
The commissioner of commerce may require the employer to contract with a licensed
third-party administrator when the commissioner determines it is necessary to ensure
proper payment of compensation under this chapter.
(d) For all claims that an employer is liable for under paragraph (a) and pays on or
after May 26, 2005, and for all deductible amounts an employer pays on or after May
26, 2005, under an employer's policy with an insurer that became insolvent before May
23, 2003:
(1) the employer shall file reports and pay assessments to the special compensation
fund, according to the requirements of section 176.129 that apply to self-insured
employers, based on paid indemnity losses for the claims and deductible amounts it
paid; and
(2) the employer may request supplementary benefit and second injury
reimbursement from the special compensation fund for the claims and deductible amounts
it paid, subject to section 176.129, subdivision 13. Reimbursement from the special
compensation fund is limited to claims that are eligible for supplementary benefit and
second injury reimbursement under Minnesota Statutes 1990, section 176.131, and
Minnesota Statutes 1994, section 176.132.
(e) For all claims for which an employer is liable under paragraph (a) and paid
between the date of the insurer's insolvency and May 26, 2005, and for all deductible
amounts an employer paid between the date of the insurer's insolvency and May 26, 2005,
under an employer's policy with an insurer that became insolvent before May 23, 2003,
the employer may request supplementary benefit and second injury reimbursement from
the special compensation fund, subject to section 176.129, subdivision 13, if:
(1) the employer files reports and pays all past assessments based on paid indemnity
losses, for all claims and deductible amounts it paid from the date of the insolvency of the
insurer to May 26, 2005, at the rate that was in effect for self-insured employers under
section 176.129 during the applicable assessment reporting period;
(2) the employer has a pending request for reimbursement of the claims and
deductible amounts it paid from the special compensation fund as of May 26, 2005, or
files a request for reimbursement within one year after May 26, 2005; and
(3) the claims are eligible for supplementary benefit and second injury
reimbursement under Minnesota Statutes 1990, section 176.131, and Minnesota Statutes
1994, section 176.132.
(f) An employer who is liable for claims under paragraph (a) shall be eligible for
reimbursement from the Workers' Compensation Reinsurance Association under chapter
79 for those claims to the extent they exceed the applicable retention limit selected
by the insolvent insurer and if the employer has complied with the requirements for
reimbursement established by the Workers' Compensation Reinsurance Association for its
self-insured members. The employer is not responsible for payment of premiums to the
reinsurance association to the extent the premiums have been paid by the insolvent insurer.
(g) The expenses of the employer in handling the claims paid under paragraph
(a) are accorded the same priority as the liquidator's expenses. The employer must be
recognized as a claimant in the liquidation of an insolvent insurer for amounts paid by
the employer under this subdivision, and must receive dividends and other distributions
at the priority set forth in chapter 60B. The receiver, liquidator, or statutory successor of
an insolvent insurer is bound by settlements of claims made by the employer under this
subdivision. The court having jurisdiction shall grant the claims priority equal to that
which the claimant would have been entitled against the assets of the insolvent insurer in
the absence of this subdivision.
(h) The Workers' Compensation Reinsurance Association and the special
compensation fund, as a condition of directly reimbursing an employer eligible for
reimbursement, may require the employer to hold it harmless from any claims by a
liquidator, receiver, or statutory successor to the insolvent insurer that the Workers'
Compensation Reinsurance Association or special compensation fund improperly
indemnified or reimbursed the employer. In no event shall the Workers' Compensation
Reinsurance Association or the special compensation fund be required to reimburse any
amounts for any claim more than once.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 12. Minnesota Statutes 2006, section 176.231, subdivision 10, is amended to read:
    Subd. 10. Failure to file required report, penalty. If an employer, qualified
rehabilitation consultant or rehabilitation vendor, insurer, physician, chiropractor, or other
health provider fails to file with the commissioner any report required by this section
chapter in the manner and within the time limitations prescribed, or otherwise fails to
provide a report required by this section chapter in the manner provided by this section
chapter, the commissioner may impose a penalty of up to $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 payable to the
commissioner for deposit into the assigned risk safety account.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 13. Minnesota Statutes 2006, section 176.245, is amended to read:
176.245 RECEIPTS FOR PAYMENT OF COMPENSATION, FILING.
An employer shall promptly file with the division receipts for payment of
compensation as may be required by the rules of the division.
The commissioner of the Department of Labor and Industry shall periodically check
its records in each case to determine whether these receipts have been promptly filed, and
if not, shall require the employer to do so. The commissioner may determine, using
statistical methodology similar to Six Sigma, the most efficient manner of reviewing or
auditing the records filed under this chapter, including using sampling methodology, to
determine compliance with this chapter.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 14. Minnesota Statutes 2006, 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 a workers'
compensation identification number has been assigned by the department, it may be
substituted for the Social Security number on a form or document. 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.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 15. Minnesota Statutes 2006, section 176.285, is amended to read:
176.285 SERVICE OF PAPERS AND NOTICES; ELECTRONIC FILING.
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. Where a statute or rule
authorizes or requires a document to be filed with or served on an agency, the document
may be filed electronically if electronic filing is authorized by the agency and if the
document is transmitted in the manner and in the format specified by the agency. Where a
statute or rule authorizes or requires a person's signature on a document to be filed with
or served on an agency, the signature may be transmitted electronically, if authorized
by the agency and if the signature is transmitted in the manner and format specified by
the agency. The commissioner may require that a document authorized or required to
be filed with the commissioner, department, or division be filed electronically in the
manner and format specified by the commissioner, except that an employee must not be
required to file a document electronically unless the document is filed by an attorney on
behalf of an employee. An agency may serve a document electronically if the recipient
agrees to receive it in an electronic format. 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.
For purposes of this section, "agency" means the workers' compensation division,
the Department of Labor and Industry, the commissioner of the Department of Labor and
Industry, the Office of Administrative Hearings, the chief administrative law judge, or
the Workers' Compensation Court of Appeals. "Document" includes documents, reports,
notices, orders, papers, forms, information, and data elements that are authorized or
required to be filed with an agency or the commissioner or that are authorized or required
to be served on or by an agency or the commissioner.
Except as otherwise modified by this section, the provisions of chapter 325L apply
to electronic signatures and the electronic transmission of documents under this section.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 16. Minnesota Statutes 2006, section 176.83, subdivision 7, is amended to read:
    Subd. 7. Miscellaneous rules. Rules necessary for implementing and administering
the provisions of Minnesota Statutes 1990, section 176.131, Minnesota Statutes 1994,
section 176.132, sections 176.238 and 176.239; sections 176.251, and 176.66 to 176.669,
and rules regarding proper allocation of compensation under section 176.111. Under
the rules adopted under section 176.111 a party may petition for a hearing before a
compensation judge to determine the proper allocation. In this case the compensation
judge may order a different allocation than prescribed by rule.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 17. REVISOR'S INSTRUCTION.
    The revisor of statutes shall recode Minnesota Statutes, section 176.181, subdivision
2b, as Minnesota Statutes, section 79A.04, subdivision 3a.

    Sec. 18. REPEALER.
Minnesota Statutes 2006, sections 176.1041; and 176.669, are repealed.
EFFECTIVE DATE.This section is effective the day following final enactment.
Presented to the governor April 28, 2008
Signed by the governor April 30, 2008, 3:19 p.m.

700 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155 ♦ Phone: (651) 296-2868 ♦ TTY: 1-800-627-3529 ♦ Fax: (651) 296-0569