Mirror proposals that would help employers avoid workers’ compensation cost increases are making their way through the General Assembly. The legislation, S.B. 319 and H.B. 922, would address a workers’ compensation court decision known as Whitmoyer.
A long-standing principle of workers’ compensation has been the right of employers to be reimbursed for certain expenses if a third party is found liable for the injury. Courts have upheld so-called subrogation rights in order to hold negligent third parties accountable, mitigate the impact on non-negligent employers and prevent double recovery by claimants. Subrogation has included allowing employers to offset future wage-loss and medical costs if the third party recovery exceeds the compensation paid by the employer. However, in the 2018 Whitmoyer decision, the PA Supreme Court found that the ability to offset future costs only applied to wage-loss benefits, not medical expenses.
In a memo sent to members of the Senate, the PA Chamber noted that, “The court did not object to the concept of subrogation applying to both future wage and medical benefits, but simply raised a technicality with language in the law. This decision disrupted a 100-year standard for this process, leading to increased costs for Pennsylvania employers.”
The legislation makes a technical change to address the Court’s concern. Both proposals are currently awaiting consideration in the House. House Bill 922 was approved by the House Labor and Industry Committee and last week; the Senate passed S.B. 319.
In other workers’ compensation news, last week, the House passed H.B. 1387. This legislation would improve administration of the Uninsured Employers’ Guaranty Fund by requiring proof of wages to qualify for wage benefits. The Uninsured Employers’ Guaranty Fund is an employer-funded program to pay wage-loss and medical benefits for workers hurt on the job whose employers do not have workers’ compensation coverage.
In a memo, the PA Chamber highlighted that while, “UEGF was intended to protect workers from negligent or unscrupulous employers; unfortunately, it has been manipulated over the years into a system of ‘free’ workers’ comp for the underground economy.