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Changes to the Worker’s Compensation Act of Indiana (the “Act”) are coming on July 1, 2018.  Often, this is the date that changes in the values of benefits take place, but there are no increases in the values this year.  The changes this year involve the requirements for timely payments of benefits and settlements. 

Indiana Senate Bill 290, which materially modifies several sections of the Act, was signed by Governor Holcomb on March 25, 2018 and became Indiana Public Law 204.  The revised law establishes new timelines for payments of settlements aneet those deadlines. 

Section 15 or Compromise Agreements –Ind. Code §22-3-2-15

Under the revised §22-3-2-15, the settlement payment for a Section 15 or Compromise Agreement must be made within 30 days of the Board approving the settlement agreement.  Failure to do so subjects the Employer to a civil penalty.  The revised section does not clarify if payment must be “issued” or “delivered” by the 30-day deadline, nor does it provide additional time for an Employer who receives notice of the Board approval in an untimely manner.  Thus, the Employer may have less than 30 days to process and effect payment or face civil penalties.

Compensation Awards –Ind. Code §22-3-3-24

§22-3-3-24 has been amended to require payment of an “award of compensation ordered by a single hearing member of the worker's compensation board” . . . “not later than thirty (30) days after the date of the award, or as the award provides, if the award is not appealed to the full board.”

This 30-day period runs concurrently with the 30-day period to appeal an award.  An Employer must promptly determine whether it intends to appeal an award ordered by a hearing member.  The Employer would likely not have sufficient time to issue payment if it waits until the end of the 30-day appeal period and chooses not to appeal the award. An Employer who fails to comply with this subsection is subject to a civil penalty under §22–3–4–15.

Agreements to Compensation –Ind. Code §22-3-3-7

§22-3-3-7 (b) has been revised to require Employers to file proposed Agreements to Compensation (State Form 1043 or State Form 18875) electronically and serve it on the employee or the employee’s dependents within 15 days of the date the first installment of compensation is due.  The first installment is due 14 days after the disability begins (usually the “Date of Injury”). 

Logically, the electronically filed Agreement to Compensation need not be signed by the employee.  Although the revised §22-3-3-7(b) is silent as to revised Agreements to Compensation, we recommend electronically filing any alterations or new Agreements with the Board and serving them on the employee.

Physician Statement of Examination (New Section) - Ind. Code §22-3-3-10.5

A new section to the Act, Ind. Code §22-3-3-10.5, requires Employers to provide a physician statement containing a permanent partial impairment (“PPI”) rating to the employee within 15 days of the date listed on the physician’s statement.  (Similar to the requirement of making payment for an approved agreement, above, there is no grace period for delayed delivery of the physician’s statement.)  At the same time, the Employer must provide a proposed stipulated settlement agreement using the value of the assigned PPI rating and an Employee Waiver of Examination by Personal Physician (State Form 53913).  If the employee agrees to the stipulated settlement, the signed agreement must be submitted to the Board for approval within 15 days of receipt of the signed agreement from the employee.  If the agreement is approved by the Board, the Employer must make payment within 30 days of the approval or face civil penalties.

These requirements may limit an Employer’s ability to seek a Section 15 or Compromise Agreement on short notice.  Further, the requirements of §22-3-3-10.5 do not address situations where an employee suffers injuries to multiple body parts as the result of one accident.  In such a situation, the employee may be placed at maximum medical improvement (“MMI”) and assigned a PPI rating for one body part, but may continue to receive disability payments and authorized treatment for another body part.  A common sense interpretation of §22-3-3-10.5 would only require an Employer to provide a proposed stipulated settlement agreement and Employee Waiver of Examination by Personal Physician following complete placement at MMI and the assignment of a final, comprehensive PPI rating.

Recommendations:

The changes to the Act set forth several new deadlines for Employer action.  We recommend that each employer, insurance carrier, and third party administrator initiate a process to calendar the new deadlines to avoid subjecting itself to civil penalties.

The following are examples of proposed calendar reminders to be set in accordance with the new law:

Please contact a member of the RBE worker’s compensation team with any questions about the new provisions that take effect July 1.