Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1992, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1992
CHAPTER 510-S.F.No. 2107
An act relating to workers' compensation; providing
for comprehensive reform; regulating benefits;
providing for medical cost control; requiring improved
safety measures; regulating attorneys; providing for
more efficient administrative procedures; eliminating
the second injury fund; regulating insurance;
reforming the assigned risk plan; regulating fraud;
imposing penalties; amending Minnesota Statutes 1990,
sections 79.251, by adding subdivisions; 79.252,
subdivisions 1 and 3; 79.58, by adding a subdivision;
79A.02, by adding subdivisions; 79A.03, subdivisions
3, 4, 7, and 9; 79A.04, subdivision 2; 79A.06,
subdivision 5; 175.007; 176.011, subdivisions 9 and
11a; 176.081, subdivisions 1, 2, and 3; 176.101,
subdivisions 1, 2, 5, 6, and 8; 176.102, subdivisions
1, 2, 4, 6, 9, and 11; 176.103, subdivisions 2, 3, and
by adding a subdivision; 176.105, subdivision 1;
176.106, subdivision 6; 176.111, subdivision 18;
176.129, subdivision 10; 176.130, subdivisions 8 and
9; 176.132, subdivision 1; 176.135, subdivisions 1, 5,
6, and 7; 176.136, subdivisions 1, 2, and by adding
subdivisions; 176.137, subdivision 5; 176.138;
176.139, subdivision 2; 176.155, subdivision 1;
176.179; 176.181, subdivision 3, and by adding a
subdivision; 176.182; 176.183; 176.185, subdivision
5a; 176.194, subdivisions 4 and 5; 176.221,
subdivisions 3 and 3a; 176.231, subdivision 10;
176.261; 176.421, subdivision 1; 176.461; 176.645,
subdivisions 1 and 2; 176.83, subdivision 5, and by
adding a subdivision; 176A.03, by adding a
subdivision; 480B.01, subdivisions 1 and 10; 609.52,
subdivision 2; proposing coding for new law in
Minnesota Statutes, chapter 79; 79A; and 176;
repealing Minnesota Statutes 1990, sections 176.131;
176.135, subdivision 3; and 176.136, subdivision 5.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
BENEFITS
Section 1. Minnesota Statutes 1990, 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, constable, marshal, 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 peace time
in the civil defense program when ordered to training or other
duty by the state or any political subdivision of it. 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 county welfare board. 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;
(12) (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;
(13) (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;
(14) (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 state board
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;
(15) (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;
(16) (17) a worker who renders in-home attendant care
services to a physically handicapped 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;
(17) (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;
(18) (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;
(19) (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;
(20) (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;
(21) (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; and
(22) (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.
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.
Sec. 2. Minnesota Statutes 1990, section 176.011,
subdivision 11a, is amended to read:
Subd. 11a. [FAMILY FARM.] (a) "Family farm" means any farm
operation which pays or is obligated to pay less than $8,000 in
cash wages, exclusive of machine hire, to farm laborers for
services rendered during the preceding calendar year in an
amount:
(1) less than $8,000; or
(2) less than the statewide average annual wage as
described in subdivision 20 when the farm operation has total
liability and medical payment coverage equal to $300,000 and
$5,000, respectively, under a farm liability insurance policy,
and the policy covers injuries to farm laborers.
(b) For purposes of this subdivision, farm laborer does not
include any spouse, parent or child, regardless of age, of a
farmer employed by the farmer, or any executive officer of a
family farm corporation as defined in section 500.24,
subdivision 2, or any spouse, parent or child, regardless of
age, of such an officer employed by that family farm
corporation, or other farmers in the same community or members
of their families exchanging work with the employer.
Notwithstanding any law to the contrary, a farm laborer shall
not be considered as an independent contractor for the purposes
of this chapter; provided that a commercial baler or commercial
thresher shall be considered an independent contractor.
Sec. 3. Minnesota Statutes 1990, 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.
(1) provided that (b) During the year commencing on October
1, 1979 1992, and each year thereafter, commencing on October 1,
the maximum weekly compensation payable is 105 percent of the
statewide average weekly wage for the period ending December 31,
of the preceding year.
(2) (c) The minimum weekly compensation benefits for
temporary total disability shall be not less than 50 payable is
20 percent of the statewide average weekly wage for the period
ending December 31 of the preceding year or the injured
employee's actual weekly wage, whichever is less. In no case
shall a weekly benefit be less than 20 percent of the statewide
average weekly wage.
(d) Subject to subdivisions 3a to 3u this 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.
Sec. 4. Minnesota Statutes 1990, 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 a the maximum compensation equal to the statewide
average weekly wage 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 (b), 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. 5. Minnesota Statutes 1990, section 176.101,
subdivision 5, is amended to read:
Subd. 5. [TOTAL DISABILITY 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 constitutes total disability.
(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. 6. Minnesota Statutes 1990, 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 a minor or 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 permanent total disability or economic
recovery compensation shall be the statewide average weekly wage
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. 7. Minnesota Statutes 1990, section 176.101,
subdivision 8, is amended to read:
Subd. 8. [RETIREMENT PRESUMPTION.] 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 the effective date of this
subdivision an employee who receives social security old age and
survivors insurance retirement benefits is presumed retired from
the labor market. This presumption is rebuttable by a
preponderance of the evidence.
Sec. 8. Minnesota Statutes 1990, 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 the commissioner determines
is appropriate, 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.
Sec. 9. Minnesota Statutes 1990, section 176.111,
subdivision 18, is amended to read:
Subd. 18. [BURIAL EXPENSE.] In all cases where death
results to an employee from a personal injury arising out of and
in the course of employment, the employer shall pay the expense
of burial, not exceeding in amount $2,500 $7,500. In case any
dispute arises as to the reasonable value of the services
rendered in connection with the burial, its reasonable value
shall be determined and approved by the commissioner, a
compensation judge, or workers' compensation court of appeals,
in cases upon appeal, before payment, after reasonable notice to
interested parties as is required by the commissioner. If the
deceased leaves no dependents, no compensation is payable,
except as provided by this chapter.
Sec. 10. Minnesota Statutes 1990, section 176.132,
subdivision 1, is amended to read:
Subdivision 1. [ELIGIBLE RECIPIENTS.] (a) An employee who
has suffered personal injury prior to October 1, 1983 for which
benefits are payable under section 176.101 and who has been
totally disabled for more than 104 weeks shall be eligible for
supplementary benefits as prescribed in this section after 104
weeks have elapsed and for the remainder of the total
disablement. Regardless of the number of weeks of total
disability, no totally disabled person who has suffered personal
injury prior to October 1, 1983, is ineligible for supplementary
benefits after four years have elapsed since the first date of
the total disability, except as provided by clause (b), provided
that all periods of disability are caused by the same injury.
(b) An employee who has suffered personal injury after
October 1, 1983, and before October 1, 1992, is eligible to
receive supplementary benefits after the employee has been
receiving temporary total or permanent total benefits for 208
weeks. Regardless of the number of weeks of total disability,
no person who has suffered personal injury on or after October
1, 1983, and before October 1, 1992, who is receiving temporary
total compensation shall be ineligible for supplementary
benefits after four years have elapsed since the first date of
the total disability, provided that all periods of disability
are caused by the same injury.
(c) An employee who has suffered a personal injury on or
after October 1, 1992, and is permanently totally disabled as
defined in section 176.101, subdivisions 4 and 5, is eligible to
receive supplementary benefits after the employee has been
receiving temporary total or permanent total benefits for 208
weeks. Regardless of the number of weeks of total disability,
no person who is receiving permanent total compensation shall be
ineligible for supplementary benefits after four years have
elapsed since the first date of the total disability, provided
that all periods of disability are caused by the same injury.
Sec. 11. Minnesota Statutes 1990, section 176.179, is
amended to read:
176.179 [PAYMENTS OF COMPENSATION RECEIVED IN GOOD FAITH
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 benefits. The credit
applied against further payments of temporary total disability,
temporary 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. 12. Minnesota Statutes 1990, section 176.645,
subdivision 1, is amended to read:
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 or thereafter, 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.
Sec. 13. Minnesota Statutes 1990, section 176.645,
subdivision 2, is amended to read:
Subd. 2. [TIME OF FIRST ADJUSTMENT.] For injuries
occurring on or after October 1, 1981, the initial adjustment
made pursuant to subdivision 1 shall be 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.
Sec. 14. [EFFECTIVE DATE.]
Section 2 is effective January 1, 1993. The rest of the
article is effective October 1, 1992.
ARTICLE 2
LEGAL AND JUDICIAL
Section 1. Minnesota Statutes 1990, section 176.081,
subdivision 1, is amended to read:
Subdivision 1. [APPROVAL.] (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 $27,500 $60,000 of
compensation awarded to the employee is permissible and does not
require approval by the commissioner, compensation judge, or any
other party except as provided in clause (b). paragraph (d).
All fees 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.
(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. 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.
(b) (d) An attorney who is claiming legal fees under this
section for representing an employee in a workers' compensation
matter shall file a statement of attorney's 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, 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. 2. Minnesota Statutes 1990, section 176.081,
subdivision 2, is amended to read:
Subd. 2. An application for attorney fees in excess of the
amount authorized in subdivision 1 shall be made to the
commissioner, compensation judge, or district judge, before whom
the matter was heard. An appeal of a decision by the
commissioner, a compensation judge, or district court judge on
additional fees may be made to the workers' compensation court
of appeals. The application shall set forth the fee requested
and, the number of hours spent on the case, the basis for the
request, and whether or not a hearing is requested. The
application, with affidavit of service upon the employee, shall
be filed by the attorney requesting the fee. If a hearing is
requested by an interested party, a hearing shall be set with
notice of the hearing served upon known interested parties. In
all cases the employee shall be served with notice of hearing.
Sec. 3. Minnesota Statutes 1990, section 176.081,
subdivision 3, is amended to read:
Subd. 3. [REVIEW.] An employee who A party that is
dissatisfied with its attorney fees, may file an application for
review by the workers' compensation court of appeals. Such The
application shall state the basis for the need of review and
whether or not a hearing is requested. A copy of such the
application shall be served upon the party's attorney for the
employee by the court administrator and if a hearing is
requested by either party, the matter shall be set for hearing.
The notice of hearing shall be served upon known interested
parties. The attorney for the employee shall be served with a
notice of the hearing. The workers' compensation court of
appeals shall have the authority to raise the question of the
issue of the attorney fees at any time upon its own motion and
shall have continuing jurisdiction over attorney fees.
Sec. 4. Minnesota Statutes 1990, section 176.105,
subdivision 1, is amended to read:
Subdivision 1. [SCHEDULE; RULES.] (a) The commissioner of
labor and industry shall by rule establish a schedule of degrees
of disability resulting from different kinds of
injuries. Disability ratings under the schedule for permanent
partial disability must be based on objective medical evidence.
The commissioner, in consultation with the medical services
review board, shall periodically review the rules adopted under
this paragraph to determine whether any injuries omitted from
the schedule should be included and amend the rules accordingly.
(b) No permanent partial disability compensation shall be
payable except in accordance with the disability ratings
established under this subdivision, except as provided in
paragraph (c). The schedule may provide that minor impairments
receive a zero rating.
(c) If an injury for which there is objective medical
evidence is not rated by the permanent partial disability
schedule, the unrated injury must be assigned and compensated
for at the rating for the most similar condition that is rated.
Sec. 5. [176.1311] [SECOND INJURY FUND DATA.]
No person shall, directly or indirectly, provide the names
of persons who have registered a preexisting physical impairment
under section 176.131 to an employer with the intent of
assisting the employer to discriminate against those persons who
have so registered with respect to hiring or other terms and
conditions of employment.
A violation of this section is a gross misdemeanor.
Sec. 6. [176.178] [FRAUD.]
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.
Sec. 7. [176.2615] [SMALL CLAIMS COURT.]
Subdivision 1. [PURPOSE.] There is established in the
department of labor and industry a small claims court, to be
presided over by settlement judges for the purpose of settling
small claims.
Subd. 2. [ELIGIBILITY.] The claim is eligible for
determination in the small claims court if all parties agree to
submit to its jurisdiction; and
(1) the claim is for rehabilitation benefits only under
section 176.102 or medical benefits only under section 176.135;
or
(2) the claim in its total amount does not equal more than
$5,000; or
(3) where the claim is for apportionment or for
contribution or reimbursement, no counterclaim in excess of
$5,000 is asserted.
Subd. 3. [TESTIMONY; EXHIBITS.] At the hearing a
settlement judge shall hear the testimony of the parties and
consider any exhibits offered by them and may also hear any
witnesses introduced by either party.
Subd. 4. [APPEARANCE OF PARTIES.] A party may appear on
the party's own behalf without an attorney, or may retain and be
represented by a duly admitted attorney who may participate in
the hearing to the extent and in the manner that the settlement
judge considers helpful. Attorney fees awarded under this
subdivision are included in the overall limit allowed under
section 176.081, subdivision 1.
Subd. 5. [EVIDENCE ADMISSIBLE.] At the hearing the
settlement judge shall receive evidence admissible under the
rules of evidence. In addition, in the interest of justice and
summary determination of issues before the court, the settlement
judge may receive, in the judge's discretion, evidence not
otherwise admissible. The settlement judge, on the judge's own
motion, may receive into evidence any documents which have been
filed with the department.
Subd. 6. [SETTLEMENT.] A settlement judge may attempt to
conciliate the parties. If the parties agree on a settlement,
the judge shall issue an order in accordance with that
settlement.
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. There is no appeal 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.
Subd. 8. [COSTS.] The prevailing party is entitled to
costs and disbursements as in any other workers' compensation
case.
Sec. 8. [176.307] [COMPENSATION JUDGES; BLOCK SYSTEM.]
The chief administrative law judge must assign workers'
compensation cases to compensation judges using a block system
type of assignment that, among other things, ensures that a case
will remain with the same judge from commencement to conclusion
unless the judge is removed from the case by exercise of a legal
right of a party or by incapacity. The block system must be the
principal means of assigning cases, but it may be supplemented
by other systems of case assignment to ensure that cases are
timely decided.
Sec. 9. [176.325] [CERTIFIED QUESTION.]
Subdivision 1. [WHEN CERTIFIED.] The chief administrative
law judge or commissioner may certify a question of workers'
compensation law to the supreme court as important and doubtful
under the following circumstances:
(1) all parties to the case have stipulated in writing to
the facts; and
(2) the issue to be resolved is a question of workers'
compensation law that has not been resolved by the Minnesota
supreme court.
Subd. 2. [EXPEDITED DECISION.] It is the legislature's
intent that the Minnesota supreme court resolve the certified
question as expeditiously as possible, after compliance by the
parties with any requirements of the Minnesota supreme court
regarding submission of legal memoranda, oral argument, or other
matters, and after the participation of amicus curiae, should
the workers' compensation court of appeals or Minnesota supreme
court consider such participation advisable.
Subd. 3. [NOTICE.] The commissioner or chief
administrative law judge shall notify all persons who request to
be notified of a certification under this section.
Sec. 10. Minnesota Statutes 1990, section 176.421,
subdivision 1, is amended to read:
Subdivision 1. [TIME FOR TAKING; GROUNDS.] When a petition
has been heard before a compensation judge, within 30 days after
a party in interest has been served with notice of an award or
disallowance of compensation, or other order affecting the
merits of the case, the party may appeal to the workers'
compensation court of appeals on any of the following grounds:
(1) the order does not conform with this chapter; or
(2) the compensation judge committed an error of law; or
(3) the findings of fact and order were clearly erroneous
and unsupported by substantial evidence in view of the entire
record as submitted; or
(4) the findings of fact and order were procured by fraud,
or coercion, or other improper conduct of a party in interest.
Sec. 11. Minnesota Statutes 1990, section 176.461, is
amended to read:
176.461 [SETTING ASIDE AWARD.]
Except when a writ of certiorari has been issued by the
supreme court and the matter is still pending in that court or
if as a matter of law the determination of the supreme court
cannot be subsequently modified, the workers' compensation court
of appeals, for cause, at any time after an award, upon
application of either party and not less than five working days
after written notice to all interested parties, may set the
award aside and grant a new hearing and refer the matter for a
determination on its merits to the chief administrative law
judge for assignment to a compensation judge, who shall make
findings of fact, conclusions of law, and an order of award or
disallowance of compensation or other order based on the
pleadings and the evidence produced and as required by the
provisions of this chapter or rules adopted under it.
As used in this section, the phrase "for cause" is limited
to the following:
(1) a mutual mistake of fact;
(2) newly discovered evidence;
(3) fraud; or
(4) a substantial change in medical condition since the
time of the award that was clearly not anticipated and could not
reasonably have been anticipated at the time of the award.
Sec. 12. Minnesota Statutes 1990, section 480B.01,
subdivision 1, is amended to read:
Subdivision 1. [JUDICIAL VACANCIES.] If a judge of the
district court or workers' compensation court of appeals dies,
resigns, retires, or is removed during the judge's term of
office, or if a new district or workers' compensation court of
appeals judgeship is created, the resulting vacancy must be
filled by the governor as provided in this section.
Sec. 13. Minnesota Statutes 1990, section 480B.01,
subdivision 10, is amended to read:
Subd. 10. [NOTICE TO THE PUBLIC.] Upon receiving notice
from the governor that a judicial vacancy has occurred or will
occur on a specified date, the chair shall provide notice of the
following information:
(1) the office that is or will be vacant;
(2) that applications from qualified persons or on behalf
of qualified persons are being accepted by the commission;
(3) that application forms may be obtained from the
governor or the commission at a named address; and
(4) that application forms must be returned to the
commission by a named date.
For a district court vacancy, the notice must be made
available to attorney associations in the judicial district
where the vacancy has occurred or will occur and to at least one
newspaper of general circulation in each county in the
district. For a workers' compensation court of appeals vacancy,
the notice must be given to state attorney associations and all
forms of the public media.
Sec. 14. Minnesota Statutes 1990, section 609.52,
subdivision 2, is amended to read:
Subd. 2. [ACTS CONSTITUTING THEFT.] Whoever does any of
the following commits theft and may be sentenced as provided in
subdivision 3:
(1) intentionally and without claim of right takes, uses,
transfers, conceals or retains possession of movable property of
another without the other's consent and with intent to deprive
the owner permanently of possession of the property; or
(2) having a legal interest in movable property,
intentionally and without consent, takes the property out of the
possession of a pledgee or other person having a superior right
of possession, with intent thereby to deprive the pledgee or
other person permanently of the possession of the property; or
(3) obtains for the actor or another the possession,
custody, or title to property of or performance of services by a
third person by intentionally deceiving the third person with a
false representation which is known to be false, made with
intent to defraud, and which does defraud the person to whom it
is made. "False representation" includes without limitation:
(a) the issuance of a check, draft, or order for the
payment of money, except a forged check as defined in section
609.631, or the delivery of property knowing that the actor is
not entitled to draw upon the drawee therefor or to order the
payment or delivery thereof; or
(b) a promise made with intent not to perform. Failure to
perform is not evidence of intent not to perform unless
corroborated by other substantial evidence; or
(c) the preparation or filing of a claim for reimbursement,
a rate application, or a cost report used to establish a rate or
claim for payment for medical care provided to a recipient of
medical assistance under chapter 256B, which intentionally and
falsely states the costs of or actual services provided by a
vendor of medical care; or
(d) the preparation or filing of a claim for reimbursement
for providing treatment or supplies required to be furnished to
an employee under section 176.135 which intentionally and
falsely states the costs of or actual treatment or supplies
provided; or
(e) the preparation or filing of a claim for reimbursement
for providing treatment or supplies required to be furnished to
an employee under section 176.135 for treatment or supplies that
the provider knew were medically unnecessary, inappropriate, or
excessive; or
(4) by swindling, whether by artifice, trick, device, or
any other means, obtains property or services from another
person; or
(5) intentionally commits any of the acts listed in this
subdivision but with intent to exercise temporary control only
and:
(a) the control exercised manifests an indifference to the
rights of the owner or the restoration of the property to the
owner; or
(b) the actor pledges or otherwise attempts to subject the
property to an adverse claim; or
(c) the actor intends to restore the property only on
condition that the owner pay a reward or buy back or make other
compensation; or
(6) finds lost property and, knowing or having reasonable
means of ascertaining the true owner, appropriates it to the
finder's own use or to that of another not entitled thereto
without first having made reasonable effort to find the owner
and offer and surrender the property to the owner; or
(7) intentionally obtains property or services, offered
upon the deposit of a sum of money or tokens in a coin or token
operated machine or other receptacle, without making the
required deposit or otherwise obtaining the consent of the
owner; or
(8) intentionally and without claim of right converts any
article representing a trade secret, knowing it to be such, to
the actor's own use or that of another person or makes a copy of
an article representing a trade secret, knowing it to be such,
and intentionally and without claim of right converts the same
to the actor's own use or that of another person. It shall be a
complete defense to any prosecution under this clause for the
defendant to show that information comprising the trade secret
was rightfully known or available to the defendant from a source
other than the owner of the trade secret; or
(9) leases or rents personal property under a written
instrument and who with intent to place the property beyond the
control of the lessor conceals or aids or abets the concealment
of the property or any part thereof, or any lessee of the
property who sells, conveys, or encumbers the property or any
part thereof without the written consent of the lessor, without
informing the person to whom the lessee sells, conveys, or
encumbers that the same is subject to such lease and with intent
to deprive the lessor of possession thereof. Evidence that a
lessee used a false or fictitious name or address in obtaining
the property or fails or refuses to return the property to
lessor within five days after written demand for the return has
been served personally in the manner provided for service of
process of a civil action or sent by certified mail to the last
known address of the lessee, whichever shall occur later, shall
be evidence of intent to violate this clause. Service by
certified mail shall be deemed to be complete upon deposit in
the United States mail of such demand, postpaid and addressed to
the person at the address for the person set forth in the lease
or rental agreement, or, in the absence of the address, to the
person's last known place of residence; or
(10) alters, removes, or obliterates numbers or symbols
placed on movable property for purpose of identification by the
owner or person who has legal custody or right to possession
thereof with the intent to prevent identification, if the person
who alters, removes, or obliterates the numbers or symbols is
not the owner and does not have the permission of the owner to
make the alteration, removal, or obliteration; or
(11) with the intent to prevent the identification of
property involved, so as to deprive the rightful owner of
possession thereof, alters or removes any permanent serial
number, permanent distinguishing number or manufacturer's
identification number on personal property or possesses, sells
or buys any personal property with knowledge that the permanent
serial number, permanent distinguishing number or manufacturer's
identification number has been removed or altered; or
(12) intentionally deprives another of a lawful charge for
cable television service by:
(i) making or using or attempting to make or use an
unauthorized external connection outside the individual dwelling
unit whether physical, electrical, acoustical, inductive, or
other connection, or by
(ii) attaching any unauthorized device to any cable, wire,
microwave, or other component of a licensed cable communications
system as defined in chapter 238. Nothing herein shall be
construed to prohibit the electronic video rerecording of
program material transmitted on the cable communications system
by a subscriber for fair use as defined by Public Law Number
94-553, section 107; or
(13) except as provided in paragraphs (12) and (14),
obtains the services of another with the intention of receiving
those services without making the agreed or reasonably expected
payment of money or other consideration; or
(14) intentionally deprives another of a lawful charge for
telecommunications service by:
(i) making, using, or attempting to make or use an
unauthorized connection whether physical, electrical, by wire,
microwave, radio, or other means to a component of a local
telecommunication system as provided in chapter 237; or
(ii) attaching an unauthorized device to a cable, wire,
microwave, radio, or other component of a local
telecommunication system as provided in chapter 237.
The existence of an unauthorized connection is prima facie
evidence that the occupier of the premises:
(i) made or was aware of the connection; and
(ii) was aware that the connection was unauthorized; or
(15) with intent to defraud, diverts corporate property
other than in accordance with general business purposes or for
purposes other than those specified in the corporation's
articles of incorporation; or
(16) with intent to defraud, authorizes or causes a
corporation to make a distribution in violation of section
302A.551, or any other state law in conformity with it; or
(17) intentionally takes or drives a motor vehicle without
the consent of the owner or an authorized agent of the owner.
Sec. 15. [HEARINGS AT THE OFFICE OF ADMINISTRATIVE
HEARINGS; REPORT OF CHIEF ADMINISTRATIVE LAW JUDGE.]
The chief administrative law judge shall reduce the
formality and length of hearings in workers' compensation cases
at the office of administrative hearings, with a goal of
completing 50 percent of the hearings in less than two hours, 75
percent in less than four hours, and nearly all of the hearings
in less than one day. Before January 1, 1993, the chief
administrative law judge shall report to the legislature on the
success in meeting these goals, including any recommendations
for legislation needed to achieve these goals.
Sec. 16. [EFFECTIVE DATE.]
Section 4 is effective the day following final enactment.
The rest of the article is effective July 1, 1992.
ARTICLE 3
ADMINISTRATIVE, SAFETY, INSURANCE
Section 1. [79.081] [MANDATORY DEDUCTIBLES.]
Subdivision 1. [PREMIUM REDUCTION.] Each insurer,
including the assigned risk plan, issuing a policy of insurance,
must make available to an employer, upon request, the option to
agree to pay an amount per claim selected by the employer and
specified in the policy toward the total of any claim payable
under chapter 176. The amount of premium to be paid by an
employer who selects a policy with a deductible shall be reduced
based upon a rating schedule or rating plan filed with and
approved by the commissioner of commerce. Administration of
claims shall remain with the insurer as provided in the terms
and conditions of the policy. Each insurer shall notify its
agents authorized to write workers' compensation insurance about
the availability and terms and conditions of deductibles
required by this section, using a brochure in a format approved
by the commissioner.
Subd. 2. [PROCEDURE FOR PAYING DEDUCTIBLE.] If an insured
employer chooses a deductible, the insured employer is liable
for the amount of the deductible. The insurer shall administer
the claim as provided in the terms and conditions of the
insurance policy and seek reimbursement from the insured
employer for the deductible. The payment or nonpayment of
deductible amounts by the insured employer to the insurer shall
be treated under the policy insuring the liability for workers'
compensation in the same manner as payment or nonpayment of
premiums.
Subd. 3. [CREDIT RISK; EXCEPTION.] An insurer is not
required to offer a deductible to an employer if, as a result of
a credit investigation, the insurer determines that the employer
is not sufficiently financially stable to be responsible for the
payment of deductible amounts.
Subd. 4. [REPORTING REQUIREMENT.] The existence of an
insurance contract with a deductible or the fact of payment as a
result of a deductible does not affect the requirement of an
employer to report an injury or death to an insurer or the
commissioner of labor and industry.
Subd. 5. [NO EMPLOYEE LIABILITY.] Nothing in this section
alters the obligation of the employer to provide the benefits
required by this chapter. An employee is not responsible to pay
all or a part of the deductible chosen by an employer.
Sec. 2. [79.085] [SAFETY PROGRAMS.]
All insurers writing workers' compensation insurance in
this state shall provide safety consultation services to each of
their policyholders requesting the services in writing.
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. 3. [79.096] [ACCESS TO RATE MAKING DATA.]
The rating association must make available for inspection
on request of any person any data it possesses related to the
calculation of indicated pure premium rates.
Sec. 4. Minnesota Statutes 1990, section 79.251, is
amended by adding a subdivision to read:
Subd. 4a. [MEDICAL COST CONTAINMENT.] The assigned risk
plan must consider utilizing managed care plans certified under
section 176.1351 with respect to its covered employees. In
addition, the assigned risk plan must implement a medical cost
containment program. The program must, at a minimum, include:
(1) billings review to determine if claims are compensable
under chapter 176;
(2) utilization of cost management specialists familiar
with billing practice guidelines;
(3) review of treatment to determine if it is reasonable
and necessary and has a reasonable chance to cure and relieve
the employee's injury;
(4) a system to reduce billed charges to the maximum
permitted by law or rule;
(5) review of medical care utilization; and
(6) reporting of health care providers suspected of
providing unnecessary, inappropriate, or excessive services to
the commissioner of labor and industry.
Sec. 5. Minnesota Statutes 1990, section 79.251, is
amended by adding a subdivision to read:
Subd. 4b. [GROUPS.] The assigned risk plan must create a
program that attempts to group employers in the same or similar
risk classification for purposes of group premium underwriting
and claims management. The assigned risk plan must engage in
extensive safety consultation with group members to reduce the
extent and severity of injuries of group members. The
consultation should include on-site inspections and specific
recommendations as to safety improvements.
Sec. 6. Minnesota Statutes 1990, section 79.252,
subdivision 1, is amended to read:
Subdivision 1. [PURPOSE.] The purpose of the assigned risk
plan is to provide workers' compensation coverage to employers
rejected by a two nonaffiliated licensed insurance
company companies, pursuant to subdivision 2. Each rejection
must be in writing and must be obtained within 60 days before
the date of application to the assigned risk plan. In addition,
the rejections must also show the name of the insurance company
and the representative contacted.
Sec. 7. Minnesota Statutes 1990, section 79.252,
subdivision 3, is amended to read:
Subd. 3. [COVERAGE.] (a) Policies and contracts of
coverage issued pursuant to section 79.251, subdivision 4, shall
contain the usual and customary provisions of workers'
compensation insurance policies, and shall be deemed to meet the
mandatory workers' compensation insurance requirements of
section 176.181, subdivision 2.
(b) Policies issued by the assigned risk plan pursuant to
this chapter may also provide workers' compensation coverage
required under the laws of states other than Minnesota,
including coverages commonly known as "all states coverage."
The assigned risk plan review board may apply for and obtain any
licensure required in any other state to issue that coverage.
Sec. 8. [79.253] [ASSIGNED RISK SAFETY ACCOUNT.]
Subdivision 1. [CREATION OF ACCOUNT.] There is created the
assigned risk safety account as a separate account in the
special compensation fund in the state treasury. Income earned
by funds in the account must be credited to the account.
Principal and income of the account are annually appropriated to
the commissioner of labor and industry and must be used for
grants and loans under this section.
Subd. 2. [USE OF FUNDS; SAFETY ASSESSMENTS.] The assigned
risk plan shall, through persons under contract with the plan,
perform on-site surveys of employers insured by the assigned
risk plan and recommend practices and equipment to employers
designed to reduce the risk of injury to employees. The
recommendations may include that the employer form a joint
labor-management safety committee. The plan shall generally
survey employers in the following priority:
(1) employers with poor safety records for their industry
based on their premium modification factor or other factors;
(2) employers whose workers' compensation premium
classification assigned to the greatest portion of the payroll
for the employer has a premium rate in the top 25 percent of
premium rates for all classes; and
(3) all other employers.
Subd. 3. [INCENTIVES AND PENALTIES.] The assigned risk
plan shall develop a premium rating system subject to approval
by the commissioner of commerce that provides a reduction in
premium rates for employers that follow safety recommendations
made under this section and an increase in rates for employers
that do not. The system must be sensitive to the economic
ability of an employer to implement particular recommendations.
Subd. 4. [GRANTS AND LOANS.] The commissioner of labor and
industry may make grants or loans to employers for the cost of
implementing safety recommendations made under this section.
Subd. 5. [RULES.] The commissioner of labor and industry
may adopt rules necessary to implement this section.
Sec. 9. [79.255] [WORKERS' COMPENSATION INSURANCE; LESSORS
OF EMPLOYEES.]
Subdivision 1. [REGISTRATION REQUIRED.] A corporation,
partnership, sole proprietorship, or other business entity which
provides staff, personnel, or employees to be employed in this
state to other businesses pursuant to a lease arrangement or
agreement shall, before becoming eligible to be issued a policy
of workers' compensation insurance or becoming eligible to
secure coverage on a multiple coordinated policies basis,
register with the commissioner of commerce. The registration
shall:
(1) identify the name of the lessor;
(2) identify the address of the principal place of business
of the lessor and the address of each office it maintains within
this state;
(3) include the lessor's taxpayer or employer
identification number;
(4) include a list by jurisdiction of each and every name
that the lessor has operated under in the preceding five years
including any alternative names and names of predecessors and,
if known, successor business entities;
(5) include a list of each person or entity who owns a five
percent or greater interest in the employee leasing business at
the time of application and a list of each person who formerly
owned a five percent or greater interest in the employee leasing
company or its predecessors, successors, or alter egos in the
preceding five years; and
(6) include a list of each and every cancellation or
nonrenewal of workers' compensation insurance which has been
issued to the lessor or any predecessor in the preceding five
years. The list shall include the policy or certificate number,
name of insurer or other provider of coverage, date of
cancellation, and reason for cancellation. If coverage has not
been canceled or nonrenewed, the registration shall include a
sworn affidavit signed by the chief executive officer of the
lessor attesting to that fact.
Subd. 2. [INELIGIBILITY TO REGISTER.] Any lessor of
employees whose workers' compensation insurance has been
terminated within the past five years in any jurisdiction due to
a determination that an employee leasing arrangement was being
utilized to avoid premium otherwise payable by lessees shall be
ineligible to register with the commissioner or to remain
registered, if previously registered.
Subd. 3. [NOTICE OF CHANGE.] Persons filing registration
statements pursuant to this section shall notify the
commissioner as to any changes in any information required to be
provided under this section.
Subd. 4. [LIST MAINTAINED.] The commissioner shall
maintain a list of those lessors of employees who are registered
with the commissioner.
Subd. 5. [FORMS OF REGISTRATION.] The commissioner may
prescribe forms necessary to promote the efficient
administration of this section.
Subd. 6. [ADVERTISING PROHIBITION.] No organization
registered under this section shall directly or indirectly
reference that registration in any advertisements, marketing
material, or publications.
Subd. 7. [CRIMINAL PENALTIES.] Any corporation,
partnership, sole proprietorship, or other form of business
entity and any officer, director, general partner, agent,
representative, or employee of theirs who knowingly utilizes or
participates in any employee leasing agreement, arrangement, or
mechanism for the purpose of depriving one or more insurers of
premium otherwise properly payable is guilty of a misdemeanor.
Subd. 8. [APPLICATION OF SECTION.] Any lessor of employees
that was doing business in this state prior to enactment of this
section shall register with the commissioner within 30 days of
the effective date of this section.
Sec. 10. Minnesota Statutes 1990, section 175.007, is
amended to read:
175.007 [ADVISORY COUNCIL ON WORKERS' COMPENSATION;
CREATION.]
Subdivision 1. [CREATION; COMPOSITION.] The commissioner
shall appoint an advisory council on workers' compensation,
which consists of five representatives of employers and five
representatives of employees; five nonvoting members
representing the general public; two persons who have received
or are currently receiving workers' compensation benefits under
chapter 176 and the chairs of the rehabilitation review panel
and the medical services review board. The council may consult
with any party it desires. (a) There is created a permanent
council on workers' compensation consisting of 12 voting members
as follows: the presidents of the largest statewide Minnesota
business and organized labor organizations as measured by the
number of employees of its business members and in its
affiliated labor organizations in Minnesota on July 1, 1992, and
every five years thereafter; five additional members
representing business, and five additional members representing
organized labor. The commissioner of labor and industry shall
serve as chair of the council and shall be a nonvoting member.
(b) The governor, the majority leader of the senate, the
speaker of the house of representatives, the minority leader of
the senate, and the minority leader of the house of
representatives shall each select a business and a labor
representative. At least four of the labor representatives
shall be chosen from the affiliated membership of the Minnesota
AFL-CIO. At least two of the business representatives shall be
representatives of small employers as defined in section 177.24,
subdivision 1, paragraph (a), clause (2). None of the council
members shall represent attorneys, health care providers,
qualified rehabilitation consultants, or insurance companies.
If the appointing officials cannot agree on a method of
appointing the required number of Minnesota AFL-CIO and small
business representatives by the second Monday in June of the
year in which appointments are made, they shall notify the
secretary of state. The distribution of appointments shall then
be determined publicly by lot by the secretary of state or a
designee in the presence of the appointing officials or their
designees on the third Monday in June.
(c) Each council member shall appoint an alternate.
Alternates shall serve in the absence of the member they replace.
(d) The ten appointed voting members shall serve for terms
of five years and may be reappointed.
(e) The council shall designate liaisons to the council
representing workers' compensation insurers; medical, hospital,
and rehabilitation providers; and the legal profession. The
speaker and minority leader of the house of representatives
shall each appoint a caucus member as a liaison to the council.
The majority and minority leaders of the senate shall each
appoint a caucus member to serve as a liaison to the council.
(f) The terms compensation and removal of members shall be
as provided in section 15.059. The council expires as provided
in section 15.059, subdivision 5.
Subd. 2. The advisory council shall study and present to
the legislature and the governor, on or before November 15 of
each even numbered year, its findings relative to the costs,
methods of financing, and the formula to be used to provide
supplementary compensation to workers who have been determined
permanently and totally disabled prior to July 1, 1969, and its
findings relative to alterations in the scheduled benefits for
permanent partially disabled, and other aspects of the workers'
compensation act. The council shall also study and present to
the legislature and the governor on or before November 15 of
1981 and by November 15 of each even-numbered year thereafter a
report on the financial, administrative and personnel needs of
the workers' compensation division. advise the department in
carrying out the purposes of chapter 176. The council shall
submit its recommendations with respect to amendments to chapter
176 by February 1 of each year to each regular session of the
legislature and shall report its views upon any pending bill
relating to chapter 176 to the proper legislative committee. A
recommendation may not be made by the council unless it is
supported by a majority of the employer members and a majority
of the labor members. At the request of the chairs of the
senate and house of representatives committees that hear
workers' compensation matters, the department shall schedule a
meeting of the council with the members of the committees to
discuss matters of legislative concern arising under chapter 176.
Subd. 3. [MEETINGS; VOTING.] (a) The council shall meet as
frequently as necessary to carry out its duties and
responsibilities. The council may also conduct public hearings
throughout the state as may be necessary to give interested
persons an opportunity to comment and make suggestions on the
operation of the state's workers' compensation law.
(b) The meetings of the council are subject to the state's
open meeting law, section 471.705; except that the six employer
voting members and the six labor voting members may meet in
separate closed caucuses for the purpose of deliberating on
matters before the council. All votes of the council must be
public and recorded.
Subd. 4. [EXECUTIVE DIRECTOR.] (a) The assistant
commissioner for workers' compensation at the department of
labor and industry shall serve as executive director of the
council.
(b) The executive director shall provide administrative
support and information to the council in order to allow it to
monitor all elements of Minnesota's workers' compensation
system. Specific duties of the executive director shall include:
(1) examining the activities of the various entities
involved in Minnesota's workers' compensation system and
identifying problem areas for the council's consideration;
(2) identifying trends and developments in the workers'
compensation law of other states, and reporting to the council
on issues that are developing and solutions that are being
proposed or attempted;
(3) monitoring the decisions of Minnesota courts, including
the workers' compensation court of appeals and the supreme
court, to determine the impact of court decisions on the
workers' compensation system;
(4) monitoring workers' compensation research activities
and bringing important research findings and recommendations to
the attention of the council; and
(5) conducting other activities and duties as may be
requested by the council.
Subd. 5. [ADMINISTRATIVE SUPPORT.] The commissioner of
labor and industry shall supply necessary office space,
supplies, and staff support to assist the council and its
executive director in their duties.
Sec. 11. Minnesota Statutes 1990, section 176.106,
subdivision 6, is amended to read:
Subd. 6. [PENALTY.] At a conference, if the insurer does
not provide a specific reason for nonpayment of the items in
dispute, the commissioner may assess a penalty of $300 payable
to the special compensation fund 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.
Sec. 12. Minnesota Statutes 1990, 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 in the
event payment is not made in the manner prescribed.
Sec. 13. Minnesota Statutes 1990, section 176.130,
subdivision 8, is amended to read:
Subd. 8. [PENALTIES; WOOD MILLS.] If the assessment
provided for in this chapter is not paid on or before February
15 of the year when due and payable, the commissioner may impose
penalties as provided in section 176.129, subdivision 10,
payable to the assigned risk safety account.
Sec. 14. Minnesota Statutes 1990, 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 special compensation fund assigned
risk safety account, in addition to the assessment, a penalty of
50 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. 15. Minnesota Statutes 1990, 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
payable to the special compensation fund 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 has a cause of
action for actual damages and punitive damages for a minimum of
$5,000.
Sec. 16. Minnesota Statutes 1990, section 176.139,
subdivision 2, is amended to read:
Subd. 2. [FAILURE TO POST; PENALTY.] The commissioner may
assess a penalty of $300 against the employer payable to the
special compensation fund assigned risk safety account if, after
notice from the commissioner, the employer violates the posting
requirement of this section.
Sec. 17. Minnesota Statutes 1990, section 176.181,
subdivision 3, is amended to read:
Subd. 3. [FAILURE TO INSURE, PENALTY.] Any employer who
fails to comply with the provisions of subdivision 2 to secure
payment of compensation is liable to the state of Minnesota for
a penalty of $750, if the number of uninsured employees is less
than five and for a penalty of $1,500 if the number of such
uninsured employees is five or more. If the commissioner
determines that the failure to comply with the provisions of
subdivision 2 was willful and deliberate, the employer shall be
liable to the state of Minnesota for a penalty of $2,500, if the
number of uninsured employees is less than five, and for a
penalty of $5,000 if the number of uninsured employees is five
or more. If the employer continues noncompliance, the employer
is liable for five times the lawful premium for compensation
insurance for such employer for the period the employer fails to
comply with such provisions, commencing ten days after notice
has been served upon the employer by the commissioner of the
department of labor and industry by certified mail. These
penalties may be recovered jointly or separately in a civil
action brought in the name of the state by the attorney general
in any court having jurisdiction. Whenever any such failure
occurs the commissioner of the department of labor and industry
shall immediately certify that fact to the attorney general.
Upon receipt of such certification the attorney general shall
forthwith commence and prosecute the action. All penalties
recovered by the state in any such action shall be paid into the
state treasury and credited to the special compensation fund.
If an employer fails to comply with the provisions of
subdivision 2, to secure payment of compensation after having
been notified of the employer's duty, the attorney general, upon
request of the commissioner, may proceed against the employer in
any court having jurisdiction for an order restraining the
employer from having any person in employment at any time when
the employer is not complying with the provisions of subdivision
2 or for an order compelling the employer to comply with
subdivision 2. (a) If the commissioner has reason to believe
that an employer is in violation of subdivision 2, he may issue
an order directing the employer to comply with subdivision 2, to
refrain from employing any person at any time without complying
with subdivision 2, and to pay a penalty of up to $1,000 per
employee per week during which the employer was not in
compliance.
(b) An employer shall have ten working days to contest such
an order by filing a written objection with the commissioner,
stating in detail its reasons for objecting. If the
commissioner does not receive an objection within ten working
days, the commissioner's order shall constitute a final order
not subject to further review, and violation of that order shall
be enforceable by way of civil contempt proceedings in district
court. If the commissioner does receive a timely objection, the
commissioner shall refer the matter to the office of
administrative hearings for an expedited hearing before a
compensation judge. The compensation judge shall issue a
decision either affirming, reversing, or modifying the
commissioner's order within ten days of the close of the
hearing. If the compensation judge affirms the commissioner's
order, the compensation judge may order the employer to pay an
additional penalty if the employer continued to employ persons
without complying with subdivision 2 while the proceedings were
pending.
(c) All penalties assessed under this subdivision shall be
paid into the state treasury and credited to the assigned risk
safety account. Penalties assessed under this section shall
constitute a lien for government services pursuant to section
514.67, on all the employer's property and shall be subject to
the revenue recapture act in chapter 270A.
(d) For purposes of this subdivision, the term "employer"
includes any owners or officers of a corporation who direct and
control the activities of employees.
Sec. 18. Minnesota Statutes 1990, section 176.181, is
amended by adding a subdivision to read:
Subd. 8. [DATA SHARING.] (a) The departments of labor and
industry, jobs and training, 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.
(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. 19. Minnesota Statutes 1990, 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 payable to the
special compensation fund 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. 20. Minnesota Statutes 1990, section 176.183, is
amended to read:
176.183 [UNINSURED AND SELF-INSURED EMPLOYERS; BENEFITS TO
EMPLOYEES AND DEPENDENTS; LIABILITY OF EMPLOYER.]
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, and the commissioner has a
cause of action against the employer for reimbursement for all
moneys paid out or to be paid out, and, in the discretion of the
court, as punitive damages an additional amount not exceeding 50
percent of all moneys paid out or to be paid out. As used in
this subdivision subdivision 1 or 2, "employer" includes any
owners or officers of corporations a corporation who have legal
direct and control, either individually or jointly with another
or others, of the payment of wages the activities of employees.
An action to recover the moneys benefits paid shall be
instituted unless the commissioner determines that no recovery
is possible. All moneys recovered shall be deposited in the
general fund. 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.
Subd. 2. 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 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 and a penalty in the amount of 60 percent
of all compensation benefits ordered to be paid. An award
issued against an employer 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.
Subd. 3. (a) Notwithstanding subdivision 2, the
commissioner may direct payment from the special compensation
fund for compensation payable pursuant to subdivision 1,
including benefits payable under sections 176.102 and 176.135,
prior to issuance of an order of a compensation judge or the
workers' compensation court of appeals directing payment or
awarding compensation. Where payment is issued pursuant to a
petition for a temporary order, the terms of any resulting order
shall have the same status and be governed by the same
provisions as an award issued pursuant to subdivision 2.
(b) The commissioner may suspend or terminate an order
under clause (a) for good cause as determined by the
commissioner.
Subd. 4. If the commissioner authorizes the special fund
to commence payment under this section without the issuance of a
temporary order, the commissioner shall serve by certified mail
notice upon the employer and other interested parties of the
intention to commence payment. This notice shall be served at
least ten calendar days before commencing payment and shall be
mailed to the last known address of the parties. The notice
shall include a statement that failure of the employer to
respond within ten calendar days of the date of service will be
deemed acceptance by the employer of the proposed action by the
commissioner and will be deemed a waiver of defenses the
employer has to a subrogation or indemnity action by the
commissioner. At any time prior to final determination of
liability, the employer may appear as a party and present
defenses the employer has, whether or not an appearance by the
employer has previously been made in the matter. The
commissioner has a cause of action against the employer to
recover compensation paid by the special fund under this section.
Sec. 21. Minnesota Statutes 1990, 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 percent of the amount withheld from
or charged the employee. The penalty shall be imposed by the
commissioner. Fifty percent of this penalty is payable to
the special compensation fund assigned risk safety account and
50 percent is payable to the employee.
Sec. 22. Minnesota Statutes 1990, section 176.194,
subdivision 4, is amended to read:
Subd. 4. [PENALTIES.] The penalties for violations of
clauses (1) through (6) are as follows:
1st through 5th violation
of each paragraph written warning
6th through 10th violation $2,500 per violation
of each paragraph in excess of five
11th through 30th violation $5,000 per violation
of each paragraph in excess of ten
For violations of clauses (7) and (8), the penalties are:
1st through 5th violation
of each paragraph $2,500 per violation
6th through 30th violation $5,000 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 special compensation
fund 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. 23. Minnesota Statutes 1990, section 176.194,
subdivision 5, is amended to read:
Subd. 5. [RULES.] The commissioner may, by rules adopted
in accordance with chapter 14, specify additional illegal,
misleading, deceptive, or fraudulent practices or conduct which
are subject to the penalties under this section.
Sec. 24. Minnesota Statutes 1990, 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 special compensation fund 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 percent of
compensation due,
not to exceed $375,
16 - 30 50 percent of
compensation due,
not to exceed $1,140,
31 - 60 75 percent of
compensation due,
not to exceed $2,878,
61 or more 100 percent of
compensation due,
not to exceed $3,838.
The penalty under this section is in addition to any
penalty otherwise provided by statute.
Sec. 25. Minnesota Statutes 1990, 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 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. 26. [176.222] [REPORT ON COLLECTION AND ASSESSMENT OF
FINES AND PENALTIES.]
The commissioner shall annually, by January 30, submit a
report to the legislature detailing the assessment and
collection of fines and penalties under this chapter on a fiscal
year basis for the immediately preceding fiscal year and for as
many prior years as the data is available.
Sec. 27. Minnesota Statutes 1990, 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 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 special compensation fund assigned risk
safety account.
Sec. 28. [176.232] [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.
The commissioner may adopt rules regarding the training of
safety committee members and the operation of safety committees.
Sec. 29. Minnesota Statutes 1990, 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.
Sec. 30. [176.86] [FRAUD UNIT.]
The department shall establish a workers' compensation
fraud unit to investigate fraudulent and other illegal practices
of health care providers, employers, insurers, attorneys,
employees, and others related to workers' compensation. The
unit shall review files of the department and may conduct field
investigations. If the department determines there is illegal
activity, the commissioner must refer the case to the attorney
general or other appropriate prosecuting authority. The
attorney general and other prosecuting authorities must give
high priority to reviewing and prosecuting cases referred to
them by the commissioner under this section.
The attorney general shall train personnel of the
department of labor and industry in effective investigative
practices and in the requisites for successful prosecution of
illegal activity under chapter 176.
Sec. 31. Minnesota Statutes 1990, section 176A.03, is
amended by adding a subdivision to read:
Subd. 3. [COVERAGE OUTSIDE STATE.] Policies issued by the
fund pursuant to this chapter may also provide workers'
compensation coverage required under the laws of states other
than Minnesota, including coverages commonly known as "all
states coverage." The fund may apply for and obtain any
licensure required in any other state in order to issue the
coverage.
Sec. 32. [DEPARTMENT STUDY; DATA SHARING ON UNINSURED
EMPLOYERS.]
The commissioner of labor and industry shall study the
issue of whether there is data in the possession of other state
or private entities that would assist the department in
identifying employers that are not complying with the insurance
requirements of Minnesota Statutes, chapter 176. The department
shall report the results of its studies to the legislature by
January 30, 1993, together with proposed legislation that would
enable the department to obtain that information.
Sec. 33. [REPETITIVE MOTION STUDY; DEPARTMENT OF EMPLOYEE
RELATIONS.]
The department of employee relations shall assess the
number and severity of work-related repetitive motion injuries
incurred by state employees. The assessment shall include
carpal tunnel and related injuries. The department shall report
the results of the assessment to the legislature by January 30,
1993.
In addition, the department shall develop a plan for a
pilot project to reduce repetitive motion injuries for which it
shall seek funding from the 1993 legislature.
Sec. 34. [INDEPENDENT CONTRACTORS; LEASED EMPLOYEES.]
The commissioner of labor and industry shall study the
practice of employee leasing and declaration of independent
contract status as devices to evade or reduce premiums for
workers' compensation insurance.
The commissioner shall submit a report to the legislature
by January 15, 1993, with the results of the study and proposals
for legislative action.
Sec. 35. [MANDATED REDUCTIONS.]
(a) As a result of the workers' compensation law changes in
this act and the resulting savings to the costs of Minnesota's
workers' compensation system, an insurer's approved schedule of
workers' compensation rates in effect on October 1, 1992, must
be reduced by 16 percent and applied by the insurer to all
policies with an effective date between October 1, 1992, and
March 31, 1993. For purposes of this section, "insurer"
includes the assigned risk plan, and "rates" include the rates
approved by the commissioner of commerce for the assigned risk
plan. The reduction mandated by this section must also be
applied on a prorated basis to the unexpired portion of all
workers' compensation policies on October 1, 1992. An insurer
shall provide a written notice by November 1, 1992, to all
workers' compensation policyholders having an unexpired policy
with the insurer as of October 1, 1992, that reads as follows:
"As a result of the changes in the workers' compensation system
enacted by the 1992 legislature, you are entitled to a prorated
reduction of 16 percent on your current policy premium."
(b) No rate increases may be filed between April 1, 1992,
and April 1, 1993.
(c) The commissioner of labor and industry shall survey
Minnesota employers to determine if the mandated workers'
compensation insurance rate reductions required under this
section have been implemented by insurers, both as to amount and
in a manner that is uniform and nondiscriminatory between
employers having similar risks with respect to a particular
occupational classification. The commissioner shall present a
report detailing the findings and conclusions to the legislature
by March 1, 1993.
Sec. 36. [REPEALER.]
Minnesota Statutes 1990, section 176.131, is repealed. The
special compensation fund shall not reimburse an employer under
Minnesota Statutes, section 176.131, for a subsequent injury
occurring after June 30, 1992. The special compensation fund
shall continue to reimburse employers for subsequent injuries
occurring prior to July 1, 1992, and the commissioner of labor
and industry shall continue to assess for those reimbursements
under Minnesota Statutes, section 176.129.
Sec. 37. [EFFECTIVE DATE.]
Section 35 is effective the day following final enactment
retroactive to April 1, 1992. Section 1 is effective for
policies insuring liability for workers' compensation that are
effective on or after October 1, 1992. The rest of this article
is effective July 1, 1992.
ARTICLE 4
MEDICAL AND REHABILITATION
Section 1. Minnesota Statutes 1990, section 176.102,
subdivision 1, is amended to read:
Subdivision 1. [SCOPE.] (a) This section applies only to
vocational rehabilitation of injured employees and their spouses
as provided under subdivision 1a. Physical rehabilitation of
injured employees is considered treatment subject to section
176.135.
(b) Rehabilitation is intended to restore the injured
employee, through physical and vocational rehabilitation, so the
employee may return to a job related to the employee's former
employment or to a job in another work area which produces an
economic status as close as possible to that the employee would
have enjoyed without disability. Rehabilitation to a job with a
higher economic status than would have occurred without
disability is permitted if it can be demonstrated that this
rehabilitation is necessary to increase the likelihood of
reemployment. Economic status is to be measured not only by
opportunity for immediate income but also by opportunity for
future income.
Sec. 2. Minnesota Statutes 1990, section 176.102,
subdivision 2, is amended to read:
Subd. 2. [ADMINISTRATORS.] 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. An annual
adjustment is not subject to chapter 14. 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.
Sec. 3. Minnesota Statutes 1990, section 176.102,
subdivision 4, is amended to read:
Subd. 4. [REHABILITATION PLAN; DEVELOPMENT.] (a) An
employer or insurer shall provide rehabilitation consultation by
a qualified rehabilitation consultant or by another person
permitted by rule to provide consultation to an injured employee
within five days after the employee has 60 days of lost work
time due to the personal injury, except as otherwise provided in
this subdivision. Where an employee has incurred an injury to
the back, the consultation shall be made within five days after
the employee has 30 days of lost work time due to the injury.
The lost work time in either case may be intermittent lost work
time. If an employer or insurer has medical information at any
time prior to the time specified in this subdivision that the
employee will be unable to return to the job the employee held
at the time of the injury rehabilitation consultation shall be
provided immediately after receipt of this information.
For purposes of this section "lost work time" means only
those days during which the employee would actually be working
but for the injury. In the case of the construction industry,
mining industry, or other industry where the hours and days of
work are affected by seasonal conditions, "lost work time" shall
be computed by using the normal schedule worked when employees
are working full time. A rehabilitation consultation must be
provided by the employer to an injured employee upon request of
the employee, the employer, or the commissioner. When the
commissioner has received notice or information that an employee
has sustained an injury that may be compensable under this
chapter, the commissioner must notify the injured employee of
the right to request a rehabilitation consultation to assist in
return to work. The notice may be included in other information
the commissioner gives to the employee under section 176.235,
and must be highlighted in a way to draw the employee's
attention to it. If a rehabilitation consultation is requested,
the employer shall provide a qualified rehabilitation
consultant. If the injured employee objects to the employer's
selection, the employee may select a qualified rehabilitation
consultant of the employee's own choosing within 60 days
following the filing of a copy of the employee's rehabilitation
plan with the commissioner. If the consultation indicates that
rehabilitation services are appropriate under subdivision 1, the
employer shall provide the services. If the consultation
indicates that rehabilitation services are not appropriate under
subdivision 1, the employer shall notify the employee of this
determination within 14 days after the consultation.
(b) In order to assist the commissioner in determining
whether or not to request rehabilitation consultation for an
injured employee, an employer shall notify the commissioner
whenever the employee's temporary total disability will likely
exceed 13 weeks. The notification must be made within 90 days
from the date of the injury or when the likelihood of at least a
13-week disability can be determined, whichever is earlier, and
must include a current physician's report.
(c) The qualified rehabilitation consultant appointed by
the employer or insurer shall disclose in writing at the first
meeting or written communication with the employee any ownership
interest or affiliation between the firm which employs the
qualified rehabilitation consultant and the employer, insurer,
adjusting or servicing company, including the nature and extent
of the affiliation or interest.
The consultant shall also disclose to all parties any
affiliation, business referral or other arrangement between the
consultant or the firm employing the consultant and any other
party to, attorney, or health care provider involved in the case
, including any attorneys, doctors, or chiropractors.
If the employee objects to the employer's selection of a
qualified rehabilitation consultant, the employee shall notify
the employer and the commissioner in writing of the objection.
The notification shall include the name, address, and telephone
number of the qualified rehabilitation consultant chosen by the
employee to provide rehabilitation consultation.
(d) After the initial provision or selection of a qualified
rehabilitation consultant as provided under paragraph (a), the
employee may choose request a different qualified rehabilitation
consultant as follows:
(1) once during the first 60 days following the first
in-person contact between the employee and the original
consultant;
(2) once after the 60-day period referred to in clause (1);
and
(3) subsequent requests which shall be determined granted
or denied by the commissioner or compensation judge according to
the best interests of the parties.
(e) The employee and employer shall enter into a program if
one is prescribed in a rehabilitation plan within 30 days of the
rehabilitation consultation if the qualified rehabilitation
consultant determines that rehabilitation is appropriate. A
copy of the plan, including a target date for return to work,
shall be submitted to the commissioner within 15 days after the
plan has been developed.
(b) (f) If the employer does not provide rehabilitation
consultation as required by this section requested under
paragraph (a), the commissioner or compensation judge shall
notify the employer that if the employer fails to appoint
provide a qualified rehabilitation consultant or other persons
as permitted by clause (a) within 15 days to conduct a
rehabilitation consultation, the commissioner or compensation
judge shall appoint a qualified rehabilitation consultant to
provide the consultation at the expense of the employer unless
the commissioner or compensation judge determines the
consultation is not required.
(c) (g) In developing a rehabilitation plan consideration
shall be given to the employee's qualifications, including but
not limited to age, education, previous work history, interest,
transferable skills, and present and future labor market
conditions.
(d) (h) The commissioner or compensation judge may waive
rehabilitation services under this section if the commissioner
or compensation judge is satisfied that the employee will return
to work in the near future or that rehabilitation services will
not be useful in returning an employee to work.
Sec. 4. Minnesota Statutes 1990, section 176.102,
subdivision 6, is amended to read:
Subd. 6. [PLAN, ELIGIBILITY FOR REHABILITATION, APPROVAL
AND APPEAL.] (a) The commissioner or a compensation judge shall
determine eligibility for rehabilitation services and shall
review, approve, modify, or reject rehabilitation plans
developed under subdivision 4. The commissioner or a
compensation judge shall also make determinations regarding
rehabilitation issues not necessarily part of a plan including,
but not limited to, determinations regarding whether an employee
is eligible for further rehabilitation and the benefits under
subdivisions 9 and 11 to which an employee is entitled.
(b) A rehabilitation consultant must file a progress report
on the plan with the commissioner six months after the plan is
filed. The progress report must include a current estimate of
the total cost and the expected duration of the plan. The
commissioner may require additional progress reports. Based on
the progress reports and available information, the commissioner
may take actions including, but not limited to, redirecting,
amending, suspending, or terminating the plan.
Sec. 5. Minnesota Statutes 1990, section 176.102,
subdivision 9, is amended to read:
Subd. 9. [PLAN, COSTS.] (a) An employer is liable for the
following rehabilitation expenses under this section:
(a) (1) Cost of rehabilitation evaluation and preparation
of a plan;
(b) (2) Cost of all rehabilitation services and supplies
necessary for implementation of the plan;
(c) (3) Reasonable cost of tuition, books, travel, and
custodial day care; and, in addition, reasonable costs of board
and lodging when rehabilitation requires residence away from the
employee's customary residence;
(d) (4) Reasonable costs of travel and custodial day care
during the job interview process;
(e) (5) Reasonable cost for moving expenses of the employee
and family if a job is found in a geographic area beyond
reasonable commuting distance after a diligent search within the
present community. Relocation shall not be paid more than once
during any rehabilitation program, and relocation shall not be
required if the new job is located within the same standard
metropolitan statistical area as the employee's job at the time
of injury. An employee shall not be required to relocate and a
refusal to relocate shall not result in a suspension or
termination of compensation under this chapter; and
(f) (6) Any other expense agreed to be paid.
(b) Charges for services provided by a rehabilitation
consultant or vendor must be submitted on a billing form
prescribed by the commissioner. No payment for the services
shall be made until the charges are submitted on the prescribed
form.
(c) Except as provided in this paragraph, an employer is
not liable for charges for services provided by a rehabilitation
consultant or vendor unless the employer or its insurer receives
a bill for those services within 45 days of the provision of the
services. The commissioner or a compensation judge may order
payment for charges not timely billed under this paragraph if
the rehabilitation consultant or vendor can prove that the
failure to submit the bill as required by this paragraph was due
to circumstances beyond the control of the rehabilitation
consultant or vendor. A rehabilitation consultant or vendor may
not collect payment from any other person, including the
employee, for bills that an employer is relieved from liability
for paying under this paragraph.
Sec. 6. Minnesota Statutes 1990, section 176.103,
subdivision 2, is amended to read:
Subd. 2. [SCOPE.] (a) 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 the results of the
monitoring specific cases of suspected inappropriate,
unnecessary, and excessive treatment to the medical services
review board. The commissioner may, either as a result of the
monitoring or as a result of an investigation following receipt
of a complaint, if the commissioner believes that any provider
of health care services has violated any provision of this
chapter or rules adopted under this chapter, initiate a
contested case proceeding under chapter 14. In these cases, The
medical services review board shall make the final decision
following receipt of the report of an administrative law
judge 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. 7. Minnesota Statutes 1990, section 176.103, is
amended by adding a subdivision to read:
Subd. 2a. [APPEALS, EFFECT OF DECISION.] An order imposing
sanctions on a health care provider under subdivision 2 may be
appealed and has the effect provided by this subdivision.
A sanction becomes effective at the time the commissioner
notifies the provider of the order of sanction. The notice
shall advise the provider of the right to obtain review as
provided in this subdivision. If mailed, the notice of order of
sanction is deemed received three days after mailing to the last
known address of the provider.
Within 30 days of receipt of a notice of order of sanction,
a provider may request in writing a review by the commissioner
of the order. Upon receiving a request the commissioner or the
commissioner's designee shall review the order, the evidence
upon which the order was based, and any other material
information brought to the attention of the commissioner, and
determine whether sufficient cause exists to sustain the order.
Within 15 days of receiving the request the commissioner shall
report in writing the results of the review. The review
provided in this subdivision is not subject to the contested
case provisions of the administrative procedure act in chapter
14.
Within 30 days following receipt of the commissioner's
decision on review, a provider may petition the workers'
compensation court of appeals for review. The petition shall be
filed with the court, together with proof of service of a copy
on the commissioner, and accompanied by the standard filing fee
for appeals from decisions of compensation judges. No
responsive pleading shall be required of the commissioner, and
no fees shall be charged for the appearance of the commissioner
in the matter.
The petition shall be captioned in the full name of the
provider making the petition as petitioner and the commissioner
as respondent. The petition shall state with specificity the
grounds upon which the petitioner seeks rescission of the order
of sanction.
The filing of the petition shall not stay the sanction.
The court may order a stay of the balance of the sanction if the
hearing has not been conducted within 60 days after filing of
the petition upon terms the court deems proper. To the extent
applicable, review shall be conducted according to the rules of
the court for review of decisions of compensation judges.
The scope of the hearing shall be limited to the issues of
whether the medical services review board's findings were
supported by substantial evidence in view of the record before
the board and whether the sanction imposed by the commissioner
was authorized by law or rule.
The workers' compensation court of appeals may adopt rules
necessary to implement this subdivision.
Sec. 8. Minnesota Statutes 1990, 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 penalty of $200
per violation, 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. 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. 9. Minnesota Statutes 1990, 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 do so
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. No action to
recover the cost of copies may be brought until the commissioner
adopts a schedule of reasonable charges under subdivision 7.
Attorney's fees shall be determined on an hourly basis according
to the criteria in section 176.081, subdivision 5. The employer
shall pay for the reasonable value of nursing services by a
member of the employee's family in cases of permanent total
disability.
(b) (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. 10. Minnesota Statutes 1990, section 176.135,
subdivision 5, is amended to read:
Subd. 5. [OCCUPATIONAL DISEASE MEDICAL ELIGIBILITY.]
Notwithstanding section 176.66, an employee who has contracted
an occupational disease is eligible to receive compensation
under this section even if the employee is not disabled from
earning full wages at the work at which the employee was last
employed.
Payment of compensation under this section shall be made by
the employer and insurer on the date of the employee's last
exposure to the hazard of the occupational disease.
Reimbursement for medical benefits paid under this subdivision
or subdivision 1a is allowed from the employer and insurer
liable under section 176.66, subdivision 10, only in the case of
disablement.
Sec. 11. Minnesota Statutes 1990, section 176.135,
subdivision 6, is amended to read:
Subd. 6. [COMMENCEMENT OF PAYMENT.] As soon as reasonably
possible, and no later than 30 calendar days after receiving the
bill, the employer or insurer shall pay the charge or any
portion of the charge which is not denied, or deny all or a part
of the charge on the basis of excessiveness or
noncompensability, or specify the additional data needed, with
written notification to the employee and the provider explaining
the basis for denial. All or part of a charge must be denied if
any of the following conditions exists:
(1) the injury or condition is not compensable under this
chapter;
(2) the charge or service is excessive under this section
or section 176.136;
(3) the charges are not submitted on the prescribed billing
form; or
(4) additional medical records or reports are required
under subdivision 7 to substantiate the nature of the charge and
its relationship to the work injury.
If payment is denied under clause (3) or (4), the employer
or insurer shall reconsider the charges in accordance with this
subdivision within 30 calendar days after receiving additional
medical data, a prescribed billing form, or documentation of
enrollment or certification as a provider.
Sec. 12. Minnesota Statutes 1990, section 176.135,
subdivision 7, is amended to read:
Subd. 7. [MEDICAL BILLS AND RECORDS.] Health care
providers shall submit to the insurer an itemized statement of
charges on a billing form prescribed by the commissioner.
Health care providers other than hospitals shall also submit
copies of medical records or reports that substantiate the
nature of the charge and its relationship to the work injury,
provided, however, that hospitals must submit any copies of
records or reports requested under subdivision 6. Health care
providers may charge for copies of any records or reports that
are in existence and directly relate to the items for which
payment is sought under this chapter. Charges for copies
provided under this subdivision shall be reasonable. The
commissioner shall adopt a schedule of reasonable charges by
emergency rules rule.
A health care provider shall not collect, attempt to
collect, refer a bill for collection, or commence an action for
collection against the employee, employer, or any other party
until the information required by this section has been
furnished.
A United States government facility rendering health care
services to veterans is not subject to the uniform billing form
requirements of this subdivision.
Sec. 13. [176.1351] [MANAGED CARE.]
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. 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.
Subd. 2. [CERTIFICATION.] The commissioner shall certify a
managed care plan if the commissioner finds that the plan:
(1) proposes to provide quality services that meet uniform
treatment standards prescribed by the commissioner and all
medical and health care services that may be required by this
chapter in a manner that is timely, effective, and convenient
for the worker;
(2) is reasonably geographically convenient to employees it
serves;
(3) provides appropriate financial incentives to reduce
service costs and utilization without sacrificing the quality of
service;
(4) provides adequate methods of peer review, utilization
review, and dispute resolution to prevent inappropriate,
excessive, or not medically necessary treatment, and excludes
participation in the plan by those individuals who violate these
treatment standards;
(5) provides a procedure for the resolution of medical
disputes;
(6) provides aggressive case management for injured workers
and provides a program for early return to work and cooperative
efforts by the workers, the employer, and the managed care plan
to promote workplace health and safety consultative and other
services;
(7) provides a timely and accurate method of reporting to
the commissioner necessary information regarding medical and
health care service cost and utilization to enable the
commissioner to determine the effectiveness of the plan;
(8) authorizes workers to receive compensable treatment
from a health care provider who is not a member of the managed
care plan, if that provider maintains the employee's medical
records and has a documented history of treatment with the
employee and agrees to refer the employee to the managed care
plan for any other treatment that the employee may require and
if the health care provider agrees to comply with all the rules,
terms, and conditions of the managed care plan;
(9) authorizes necessary emergency medical treatment for an
injury provided by a health care provider not a part of the
managed care plan;
(10) does not discriminate against or exclude from
participation in the plan any category of health care provider
and includes an adequate number of each category of health care
providers to give workers convenient geographic accessibility to
all categories of providers and adequate flexibility to choose
health care providers from among those who provide services
under the plan;
(11) provides an employee the right to change health care
providers under the plan at least once; and
(12) complies with any other requirement the commissioner
determines is necessary to provide quality medical services and
health care to injured workers.
The commissioner may accept findings, licenses, or
certifications of other state agencies as satisfactory evidence
of compliance with a particular requirement of this subdivision.
Subd. 3. [DISPUTE RESOLUTION.] An employee must exhaust
the dispute resolution procedure of the certified managed care
plan prior to filing a petition or otherwise seeking relief from
the commissioner or a compensation judge on an issue related to
managed care. If an employee has exhausted the dispute
resolution procedure of the managed care plan on the issue of a
rating for a disability, the employee may seek a disability
rating from a health care provider outside of the managed care
organization. The employer is liable for the reasonable fees of
the outside provider as limited by the medical fee schedule
adopted under this chapter.
Subd. 4. [ACCESS TO ALL HEALTH CARE DISCIPLINES.] The
commissioner may refuse to certify or may revoke or suspend the
certification of a managed care plan that unfairly restricts
direct access within the managed care plan to any health care
provider profession. Direct access within the managed care plan
is unfairly restricted if direct access is denied and the
treatment or service sought is within the scope of practice of
the profession to which direct access is sought and is
appropriate under the standards of treatment adopted by the
managed care plan or, in instances where the commissioner has
adopted standards of treatment, the standards adopted by the
commissioner.
Subd. 5. [REVOCATION, SUSPENSION, AND REFUSAL TO CERTIFY.]
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.
Subd. 6. [RULES.] The commissioner may adopt emergency or
permanent rules necessary to implement this section.
Sec. 14. Minnesota Statutes 1990, section 176.136,
subdivision 1, is amended to read:
Subdivision 1. [SCHEDULE.] (a) The commissioner shall by
rule establish procedures for determining whether or not the
charge for a health service is excessive. In order to
accomplish this purpose, the commissioner shall consult with
insurers, associations and organizations representing the
medical and other providers of treatment services and other
appropriate groups.
(b) The procedures established by the commissioner shall
must limit, in accordance with subdivisions 1a, 1b, and 1c, the
charges allowable for medical, chiropractic, podiatric,
surgical, hospital and other health care provider treatment or
services, as defined and compensable under section 176.135,
based upon billings for each class of health care provider
during all of the calendar year preceding the year in which the
determination is made of the amount to be paid the health care
provider for the billing. The procedures established by the
commissioner for determining whether or not the charge for a
health service is excessive shall must be structured to
encourage providers to develop and deliver services for
rehabilitation of injured workers. The procedures shall must
incorporate the provisions of sections 144.701, 144.702, and
144.703 to the extent that the commissioner finds that these
provisions effectively accomplish the intent of this section or
are otherwise necessary to insure that quality hospital care is
available to injured employees.
Sec. 15. Minnesota Statutes 1990, section 176.136, is
amended by adding a subdivision 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. This notice
shall be in lieu of the requirements of chapter 14.
Sec. 16. Minnesota Statutes 1990, section 176.136, is
amended by adding a subdivision 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.
Sec. 17. Minnesota Statutes 1990, section 176.136, is
amended by adding a subdivision to read:
Subd. 1c. [CHARGES FOR INDEPENDENT MEDICAL
EXAMINATIONS.] The commissioner shall adopt rules that
reasonably limit amounts which may be charged for, or in
connection with, independent or adverse medical examinations
requested by any party, including the amount that may be charged
for depositions, witness fees, or other expenses. No party may
pay fees above the amount in the schedule.
Sec. 18. Minnesota Statutes 1990, 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. 19. Minnesota Statutes 1990, section 176.137,
subdivision 5, is amended to read:
Subd. 5. An employee is limited to $30,000 $60,000 under
this section for each personal injury.
Sec. 20. Minnesota Statutes 1990, section 176.155,
subdivision 1, is amended to read:
Subdivision 1. [EMPLOYER'S PHYSICIAN.] The injured
employee must submit to examination by the employer's physician,
if requested by the employer, and at reasonable times thereafter
upon the employer's request. The examination must be scheduled
at a location within 150 miles of the employee's residence
unless the employer can show cause to the department to order an
examination at a location further from the employee's
residence. The employee is entitled upon request to have a
personal physician present at any such examination. Each party
shall defray the cost of that party's physician. Any report or
written statement made by the employer's physician as a result
of an examination of the employee, regardless of whether the
examination preceded the injury or was made subsequent to the
injury, shall be made available, upon request and without
charge, to the injured employee or representative of the
employee. The employer shall pay reasonable travel expenses
incurred by the employee in attending the examination including
mileage, parking, and, if necessary, lodging and meals. The
employer shall also pay the employee for any lost wages
resulting from attendance at the examination. A self-insured
employer or insurer who is served with a claim petition pursuant
to section 176.271, subdivision 1, or 176.291, shall schedule
any necessary examinations of the employee, if an examination by
the employer's physician or health care provider is necessary to
evaluate benefits claimed. The examination shall be completed
and the report of the examination shall be served on the
employee and filed with the commissioner within 120 days of
service of the claim petition.
No evidence relating to the examination or report shall be
received or considered by the commissioner, a compensation
judge, or the court of appeals in determining any issues unless
the report has been served and filed as required by this
section, unless a written extension has been granted by the
commissioner or compensation judge. The commissioner or a
compensation judge shall extend the time for completing the
adverse examination and filing the report upon good cause
shown. The extension must not be for the purpose of delay and
the insurer must make a good faith effort to comply with this
subdivision. Good cause shall include but is not limited to:
(1) that the extension is necessary because of the limited
number of physicians or health care providers available with
expertise in the particular injury or disease, or that the
extension is necessary due to the complexity of the medical
issues, or
(2) that the extension is necessary to gather additional
information which was not included on the petition as required
by section 176.291.
Sec. 21. Minnesota Statutes 1990, section 176.83,
subdivision 5, is amended to read:
Subd. 5. [EXCESSIVE 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 determining 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 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 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
excessive 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 excessive 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 in which case the insurer, self-insurer, or group
self-insurer shall make the payment deemed reasonable.
A health or rehabilitation provider who is determined by
the rehabilitation review panel or medical services review
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 medical services review board shall
review excessive, inappropriate, or unnecessary health care
provider treatment under section 176.103, subdivision 2.
The rules adopted under this subdivision shall require
insurers, self-insurers, and group self-insurers to report
medical and other data necessary to implement the procedures
required by this clause.
Sec. 22. Minnesota Statutes 1990, section 176.83, is
amended by adding a subdivision to read:
Subd. 5a. [REPORTING.] Rules requiring insurers,
self-insurers, and group self-insurers to report medical and
other data necessary to implement the procedures required by
this chapter.
Sec. 23. [UTILIZATION OF HIGH TECHNOLOGY MEDICAL
PROCEDURES.]
The commissioner of labor and industry shall appoint a
committee to study the utilization of high technology medical
procedures for treatment of injuries under Minnesota Statutes,
chapter 176. The committee must include physicians, hospital
representatives, medical device manufacturers, purchasers,
consumers, and ethicists. The study must specifically examine
excessive use of technology. The commissioner shall report the
results of the study together with any proposals for legislation
to the legislature by January 30, 1993.
Sec. 24. [MEDICAL COVERAGE STUDY.]
The commissioners of commerce and labor and industry shall
study the feasibility of providing medical coverage currently
furnished through the workers' compensation system through other
health insurance mechanisms including group health and universal
health coverage plans. The study shall particularly focus on
the concept known as 24-hour coverage. The commissioners shall
report the results of their study with specific recommendations
to the legislature by February 1, 1993.
Sec. 25. [MANAGED CARE; LEGISLATIVE INTENT.]
It is the intent of the legislature that the commissioner
of labor and industry proceed with certifying managed care
organizations as expeditiously as possible. Any rules or
procedures the commissioner adopts must be designed to assist in
the formation of managed care organizations while ensuring
quality managed care to injured employees.
Sec. 26. [REPEALER.]
Minnesota Statutes 1990, sections 176.135, subdivision 3;
and 176.136, subdivision 5, are repealed.
Sec. 27. [EFFECTIVE DATE.]
Section 13 is effective the day following final enactment.
The authority to adopt emergency rules granted under section 21
is effective the day following final enactment and expires
January 1, 1994. The rest of this article is effective October
1, 1992.
ARTICLE 5
SELF-INSURANCE
Section 1. Minnesota Statutes 1990, section 79A.02, is
amended by adding a subdivision to read:
Subd. 3. [AUDIT OF SELF-INSURANCE APPLICATION.] (a) The
self-insurer's security fund shall retain a certified public
accountant who shall perform services for, and report directly
to, the commissioner of commerce. The certified public
accountant shall review each application to self-insure,
including the applicant's financial data. The certified public
accountant shall provide a report to the commissioner of
commerce indicating whether the applicant has met the
requirements of section 79A.03, subdivisions 2 and 3.
Additionally, the certified public accountant shall provide
advice and counsel to the commissioner about relevant facts
regarding the applicant's financial condition.
(b) If the report of the certified public accountant is
used by the commissioner as the basis for the commissioner's
determination regarding the applicant's self-insurance status,
the certified public accountant shall be made available to the
commissioner for any hearings or other proceedings arising from
that determination.
(c) The commissioner shall provide the advisory committee
with the summary report by the certified public accountant and
any financial data in possession of the department of commerce
that is otherwise available to the public.
The cost of the review shall be the obligation of the
self-insurer's security fund.
Sec. 2. Minnesota Statutes 1990, section 79A.02, is
amended by adding a subdivision 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.
Sec. 3. Minnesota Statutes 1990, section 79A.03,
subdivision 3, is amended to read:
Subd. 3. [NET WORTH.] Each individual self-insurer shall
have and maintain a net worth at least equal to the greater of
ten times the retention limit selected with the workers'
compensation reinsurance association or one-third the amount of
the self-insurer's current annual modified premium. The
requirements of this subdivision shall be modified if the
self-insurer can demonstrate through a reinsurance program,
other than coverage provided by the workers' compensation
reinsurance association, that it can pay expected losses without
endangering the financial stability of the company. Each
individual self-insurer's net worth, as presented on its audited
balance sheet filed with the department of commerce, shall equal
at least ten percent of the entity's total assets and shall
equal at least ten times the retention level selected with the
workers' compensation reinsurance association.
Sec. 4. Minnesota Statutes 1990, section 79A.03,
subdivision 4, is amended to read:
Subd. 4. [ASSETS, NET WORTH, AND LIQUIDITY.] (a) Each
individual self-insurer shall have and maintain sufficient
assets, net worth, and liquidity to promptly and completely meet
all of its obligations that may arise under chapter 176 or this
chapter. In determining whether a self-insurer meets this
requirement, the commissioner shall consider the self-insurer's
current ratio; its long-term and short-term debt to equity
ratios; its net worth; financial characteristics of the
particular industry in which the self-insurer is involved; any
recent changes in the management and ownership of the company
self-insurer; any excess insurance purchased by the self-insurer
from a licensed company or an authorized surplus line carrier,
other than excess insurance from the workers' compensation
reinsurance association; any other financial data submitted to
the commissioner by the company self-insurer; and the company's
self-insurer's workers' compensation experience for the last
four years. Notwithstanding any other provision of this
chapter, the commissioner may deny an application for
self-insurance authority or terminate existing self-insurance
authority if the applicant or self-insurer does not have
sufficient assets, net worth, and liquidity to promptly and
completely meet all of its self-insurance obligations.
(b) An individual self-insurer must have had positive net
income as shown on audited income statements filed with the
department of commerce during three of the last five years and
cumulatively over the five-year period. If the self-insurer has
been in existence less than five years, it must have had
cumulative net income during the period of existence and in the
most recent year.
(c) An individual self-insurer must have had cash generated
from operations as shown on the audited statements of cash flows
filed with the department of commerce during three of the last
five years and cumulatively over the five-year period. If the
self-insurer has been in existence less than five years, it
shall have had cumulative cash generated from operations during
the period of existence and in the most recent year.
(d) No entity shall be admitted as an individual
self-insurer, or be allowed to continue its self-insurance
authority, if the audit report for the most recent year includes
an explanatory paragraph stating that the auditor has concluded
that there is substantial doubt about the entity's ability to
continue as a going concern.
Sec. 5. Minnesota Statutes 1990, section 79A.03,
subdivision 7, is amended to read:
Subd. 7. [FINANCIAL STANDARDS.] A group proposing to
self-insure shall have and maintain:
(a) A combined net worth of all of the members of an amount
at least equal to the greater of ten times the retention
selected with the workers' compensation reinsurance association
or one-third of the current annual modified premium of the
members. The requirements of this paragraph shall be modified
if the self-insurer can demonstrate that through excess
insurance, other than coverage provided by the workers'
compensation reinsurance association, it can pay expected losses.
(b) Sufficient assets, net worth, and liquidity to promptly
and completely meet all obligations of its members under chapter
176 or this chapter. In determining whether a group is in sound
financial condition, consideration shall be given to the
combined net worth of the member companies; the consolidated
long-term and short-term debt to equity ratios of the member
companies; any excess insurance other than reinsurance with the
workers' compensation reinsurance association, purchased by the
group from an insurer licensed in Minnesota or from an
authorized surplus line carrier; other financial data requested
by the commissioner or submitted by the group; and the combined
workers' compensation experience of the group for the last four
years.
Sec. 6. Minnesota Statutes 1990, section 79A.03,
subdivision 9, is amended to read:
Subd. 9. [FILING REPORTS.] (a) Incurred losses, paid and
unpaid, specifying indemnity and medical losses by
classification, payroll by classification, and current estimated
outstanding liability for workers' compensation shall be
reported to the commissioner by each self-insurer on a calendar
year basis, in a manner and on forms available from the
commissioner. Payroll information must be filed by April 1 of
the following year, and loss information and total workers'
compensation liability must be filed by August 1 of the
following year.
(b) Each self-insurer shall, under oath, attest to the
accuracy of each report submitted pursuant to paragraph (a).
Upon sufficient cause, the commissioner shall require the
self-insurer 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: where the losses reported appear
significantly different from similar types of businesses; where
major changes in the reports exist from year to year, which are
not solely attributable to economic factors; or where the
commissioner has reason to believe that the losses and payroll
in the report do not accurately reflect the losses and payroll
of that employer. If any discrepancy is found, the commissioner
shall require changes in the self-insurer's or workers'
compensation service company record keeping practices.
(c) With the annual loss report due August 1, each
self-insurer shall report to the commissioner any workers'
compensation claim from the previous year where the full,
undiscounted value is estimated to exceed $50,000, in a manner
and on forms prescribed by the commissioner.
(d) Each individual self-insurer shall, within four months
after the end of its fiscal year, annually file with the
commissioner its latest 10K report required by the Securities
and Exchange Commission. If an individual self-insurer does not
prepare a 10K report, it shall file an annual certified
financial statement, together with such other financial
information as the commissioner may require to substantiate data
in the financial statement.
(e) Each group self-insurer shall, within four months after
the end of the fiscal year for that group, annually file a
statement showing the combined net worth of its members based
upon an accounting review performed by a certified public
accountant, together with such other financial information the
commissioner may require to substantiate data in the group's
summary statement. Each member of the group shall, within four
months after the end of each fiscal year for that group, file
the most recent annual financial statement, reviewed by a
certified public accountant in accordance with the Statements on
Standards for Accounting and Review Services, Volume 2, the
American Institute of Certified Public Accountants Professional
Standards, or audited in accordance with generally accepted
auditing standards, together with such other financial
information the commissioner may require. In addition, the
group shall file, within four months after the end of each
fiscal year for that group, combining financial statements of
the group members, compiled by a certified public accountant in
accordance with the Statements on Standards for Accounting and
Review Services, Volume 2, the American Institute of Certified
Public Accountants Professional Standards. The combining
financial statements shall include, but not be limited to, a
balance sheet, income statement, statement of changes in net
worth, and statement of cash flow. Each combining financial
statement shall include a column for each individual group
member along with a total column.
Where a group has 50 or more members, the group shall file,
in lieu of the combining financial statements, a combined
financial statement showing only the total column for the entire
group's balance sheet, income statement, statement of changes in
net worth, and statement of cash flow. Additionally, the group
shall disclose, for each member, the total assets, net worth,
revenue, and income for the most recent fiscal year. The
combining and combined financial statements may omit all
footnote disclosures.
(f) In addition to the financial statements required by
paragraphs (d) and (e), interim financial statements or 10Q
reports required by the Securities and Exchange Commission may
be required by the commissioner upon an indication that there
has been deterioration in the self-insurer's financial
condition, including a worsening of current ratio, lessening of
net worth, net loss of income, the downgrading of the company's
bond rating, or any other significant change that may adversely
affect the self-insurer's ability to pay expected losses. Any
self-insurer that files an 8K report with the Securities and
Exchange Commission shall also file a copy of the report with
the commissioner within 30 days of the filing with the
Securities and Exchange Commission.
Sec. 7. Minnesota Statutes 1990, 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 relating to or arising
from the employer's self-insuring. As used in this section,
"private self-insurers' estimated future liability" means the
private self-insurers' total of estimated future liability as
determined by a member of the casualty actuarial society every
two years for nongroup member private self-insurers, and 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 a member of
the casualty actuarial society 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.
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.
Sec. 8. Minnesota Statutes 1990, section 79A.06,
subdivision 5, is amended to read:
Subd. 5. [PRIVATE EMPLOYERS WHO HAVE CEASED TO BE
SELF-INSURED.] Private employers who have ceased to be private
self-insurers shall discharge their continuing obligations to
secure the payment of compensation which is accrued during the
period of self-insurance, for purposes of Laws 1988, chapter
674, sections 1 to 21, by compliance with all of the following
obligations of current certificate holders:
(1) Filing reports with the commissioner to carry out the
requirements of this chapter;
(2) Depositing and maintaining a security deposit for
accrued liability for the payment of any compensation which may
become due, pursuant to chapter 176. However, if a private
employer who has ceased to be a private self-insurer purchases
an insurance policy from an insurer authorized to transact
workers' compensation insurance in this state which provides
coverage of all claims for compensation arising out of injuries
occurring during the period the employer was self-insured,
whether or not reported during that period, the policy will
discharge the obligation of the employer to maintain a security
deposit for the payment of the claims covered under the policy.
The policy may not be issued by an insurer unless it has
previously been approved as to form and substance by the
commissioner; and
(3) Paying within 30 days all assessments of which notice
is sent by the security fund, for a period of seven years from
the last day its certificate of self-insurance was in effect.
Thereafter, the private employer who has ceased to be a private
self-insurer may either: (a) continue to pay within 30 days all
assessments of which notice is sent by the security fund until
it has no incurred liabilities for the payment of compensation
arising out of injuries during the period of self-insurance; or
(b) pay the security fund a cash payment equal to four percent
of the net present value of all remaining incurred liabilities
for the payment of compensation under sections 176.101 and
176.111 as certified by a member of the casualty actuarial
society. Assessments shall be based on the benefits paid by the
employer during the last full calendar year of self-insurance on
claims incurred during that year immediately preceding the
calendar year in which the employer's right to self-insure is
terminated or withdrawn.
In addition to proceedings to establish liabilities and
penalties otherwise provided, a failure to comply may be the
subject of a proceeding before the commissioner. An appeal from
the commissioner's determination may be taken pursuant to the
contested case procedures of chapter 14 within 30 days of the
commissioner's written determination.
Any current or past member of the self-insurers' security
fund is subject to service of process on any claim arising out
of chapter 176 or this chapter in the manner provided by section
303.13, subdivision 1, clause (3), or as otherwise provided by
law. The issuance of a certificate to self-insure to the
private self-insured employer shall be deemed to be the
agreement that any process which is served in accordance with
this section shall be of the same legal force and effect as if
served personally within this state.
Sec. 9. [79A.071] [CUSTODIAL ACCOUNTS.]
Subdivision 1. [DEPOSIT.] All securities shall be
deposited with the state treasurer or in a custodial account
with a depository institution acceptable to the state
treasurer. Surety bonds shall be filed with the commissioner.
The commissioner and the state treasurer may sell or collect, in
the case of default of the employer or fund, the amount that
yields sufficient funds to pay compensation due under the
workers' compensation act.
Subd. 2. [ASSIGNMENT.] Securities in physical form
deposited with the state treasurer must bear the following
assignment, which shall be signed by an officer, partner, or
owner: "Assigned to the state of Minnesota for the benefit of
injured employees of the self-insured employer under the
Minnesota workers' compensation act." Any securities held in a
custodial account, whether in physical form, book entry, or
other form, need not bear the assignment language. The
instrument or contract creating and governing any custodial
account must contain the following assignment language: "This
account is assigned to the state treasurer by the Company to pay
compensation and perform the obligations of employers imposed
under Minnesota Statutes, chapter 176. A depositor or other
party has no right, title, or interest in the security deposited
in the account until released by the state."
Subd. 3. [CUSTODY.] All securities in physical form on
deposit with the state treasurer and surety bonds on deposit
shall remain in the custody of the state treasurer or the
commissioner for a period of time dictated by the applicable
statute of limitations provided in the workers' compensation act.
All original instruments and contracts creating and governing
custodial accounts shall remain with the state treasurer or the
commissioner for a period of time dictated by the applicable
statute of limitations provided in the workers' compensation act.
Subd. 4. [RELEASE.] No securities in physical form on
deposit with the state treasurer or custodial accounts assigned
to the state shall be released without an order from the
commissioner.
Subd. 5. [EXCHANGING OR REPLACING.] Any securities
deposited with the state treasurer or with a custodial account
assigned to the state treasurer or surety bonds held by the
commissioner may be exchanged or replaced by the depositor with
other acceptable securities or surety bonds of like amount so
long as the market value of the securities or amount of the
surety bond equals or exceeds the amount of deposit required.
If securities are replaced by a surety bond, the self-insurer
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, subject to the limitations on maximum security
deposits established in Minnesota Rules.
Sec. 10. [REPEALER.]
Minnesota Rules, part 2780.0400, subparts 2, 3, 6, 7, and
8, are repealed.
Sec. 11. [EFFECTIVE DATE.]
Sections 1 to 10 are effective August 1, 1992. For
self-insurers that have Minnesota self-insurance authority on
August 1, 1992, section 4, paragraphs (b), (c), and (d), are
effective August 1, 1995.
ARTICLE 6
INSURANCE REGULATION
Section 1. Minnesota Statutes 1990, section 79.58, is
amended by adding a subdivision to read:
Subd. 3. [FLEX RATING.] (a) Whenever an insurer files a
change in its existing rate level that is greater than eight
percent in a 12-month period, the commissioner may hold a
hearing to determine if the rate is excessive. The hearing must
be conducted as provided under chapter 14. The commissioner
shall give notice of intent to hold a hearing within 60 days of
the filing of the change. The commissioner of labor and
industry may appear as an interested party at the hearing. At
the hearing, the insurer has the responsibility of showing the
rate is not excessive. The rate is effective unless it is
determined as a result of the hearing that the rate is
excessive. The disapproval of a rate under this subdivision
must be done in the same manner as provided under section 70A.11.
(b) This subdivision applies only to changes resulting from
an insurer's utilization of either (1) the pure premium base
rate level filed by any data service organization plus the
insurer's loading for expenses and profit, or (2) the insurer's
own filed rate levels. This subdivision does not apply to any
changes resulting from assessments for the assigned risk plan,
reinsurance association, guarantee fund, special compensation
fund, benefit level changes, or other rates or rating plans
utilized by an insurer.
Presented to the governor April 17, 1992
Signed by the governor April 28, 1992, 8:40 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes