In the event of a work-related injury or illness, the PA Chamber supports the payment of reasonable and necessary medical treatment and, when necessary, wage-loss benefits to the injured employee. However, the workers’ compensation law must only provide benefits to eligible employees with legitimate, work-related injuries or illnesses. The PA Chamber opposes any effort that could erode employers’ rights and protections under the WC law, or weaken its “exclusivity doctrine”.
The PA Chamber achieved a major legislative victory in the waning days of the 2017-18 legislative session when Gov. Tom Wolf signed H.B. 1840 into law as Act 111 of 2018.
Why the Legislation Was Needed
In last year’s Protz v. Workers’ Compensation Appeals Board case, the Court removed Impairment Rating Evaluations from the law, which for more than 20 years has provided a structured process for state-designated physicians to determine a patient’s level of impairment and how long wage-loss benefits should be paid. The Court’s decision – which was essentially based on a technicality – led the Pennsylvania Compensation Rating Bureau to file for an unprecedented mid-year loss cost increase. The PA Chamber issued a statement at the time warning employers that this filing could lead to workers’ comp cost increases. Industry experts have since conservatively estimated this action was costing employers upwards of $300 million each year.
The PA Chamber coordinated a broad-based coalition comprised of various business, local government, medical and school board groups to advocate for a legislative fix that would help save Pennsylvania employers from the heavy financial burden they faced as a result of the Protz case. The bill we promoted updates IRE-related language in the law to address the issues raised by the Supreme Court and requires the PCRB to file a loss cost decrease, which will spare employers from being forced into paying significantly higher insurance costs. The coalition worked with lawmakers to get to the governor’s desk before the clock ran out on the 2017-18 session.
After receiving approval from both the House and Senate, the governor signed the legislation into law on October 24, 2018 as Act 111. We applauded the governor for taking this action and thanked General Assembly – particularly, the chairs of the House and Senate Labor and Industry Committees – for working quickly toward a legislative solution on this costly issue for employers.
A report to the state legislature by the Workers’ Compensation Advisory Council uncovered dramatic spikes in costs associated with non-FDA approved compound pain creams and the emergence of so-called “new pharmacies,” described as those beginning operation since 2013 and which appear to specialize in dispensing these questionable medications at staggering costs to employers.
Pennsylvania Chamber of Business and Industry President and CEO Gene Barr issued the following statement regarding the passage and enactment of H.B. 1840, significant workers’ comp legislation that provides a fix to a state Supreme Court decision in the Protz v. Workers’ Compensation Appeals Board case, which has been financially detrimental to employers. Last year, the Pennsylvania Supreme Court removed Impairment Rating Evaluations from the law, which for more than 20 years has provided a structured process for state-designated physicians to determine a patient’s level of impairment and how long wage-loss benefits should be paid. As a result of the ruling, the Pennsylvania Compensation Rating Bureau took the unprecedented action of filing for a mid-year loss cost increase, which industry experts are conservatively estimating is costing employers hundreds of millions of dollars each year in higher insurance costs.
The Pennsylvania Chamber of Business and Industry applauded the General Assembly for passing significant workers’ comp legislation that will save employers hundreds of millions of dollars and urged the governor to quickly sign the bill into law.
The Pennsylvania Chamber of Business and Industry is committed to promoting safe and healthy workplaces. In the event of a work-related injury or illness, it is the employer’s obligation to pay for all reasonable and necessary medical treatment and, when necessary, wage-loss benefits to the injured employee. This obligation was codified in 1915 through passage of Pennsylvania’s Workers’ Compensation Act and this ‘grand bargain’ has generally served its purpose of establishing structure, predictability and a guarantee of support for eligible claimants.
Employers’ top workers’ compensation priority is the same today as it was in 1915: providing effective treatment to facilitate the injured worker back to full function, health and work as soon as possible.
In addition to focusing on improving outcomes for injured workers, public policy related to workers’ compensation should also help address cost-drivers in the system. While the PA Chamber is encouraged that overall statewide system costs have stabilized in recent years, it is important to recognize that this trend is due to a decline in the number of workplace injuries offset by rising costs per claim.
After over one hundred years, it is ever important to ensure the law is being applied properly and to identify, combat and root out fraud and abuse in the system, including conflicts of interest that unnecessarily drive up costs. The PA Chamber opposes any erosion of employer rights and protections under the workers’ compensation law. The PA Chamber also opposes any weakening of the “exclusivity doctrine” of workers’ compensation.
The PA Chamber would support amending Pennsylvania’s Workers’ Compensation law to help achieve the following objectives:
The PA Chamber also supports the Uninsured Employer Guaranty Fund, which covers medical and wage benefits for injured workers whose employers do not have workers’ compensation coverage. The PA Chamber urges efforts to reform and improve UEGF, including providing its administrators at the state Bureau of Workers’ Compensation additional tools to help control costs and ensuring the program is focused on providing benefits to only its intended beneficiaries.