Iowa Gov. Gov. Terry Branstad has signed a controversial workers’ compensation bill that reduces benefits for injured workers, notably benefits for shoulder injuries, and decreases coverage for injuries tied to a pre-existing condition.
A proposal to end permanent total disability benefits at age 67 was ultimately removed from measure, but Republicans added an amendment creating a vocational rehabilitation program for some workers with shoulder injuries. Employer would pay up to $15,000 toward a retraining program for qualified workers, according to a report by the Iowa Legislative Services Agency (LSA).
Republicans say the workers’ comp reform was needed to combat increased litigation following employee-friendly court and commission interpretations of the workers’ comp statutes in disputed cases over the past decade.
But Democrats argue that the legislation was simply a gift to corporations and a case of attempting to fix something that wasn’t broken.
Beginning in the 2018 budget year, payouts from the state Workers’ Compensation Fund are expected to decrease by about $1.8 million annually under the bill, the LSA reported. The LSA said it’s unknown what the fiscal impact of the retraining program will be, but it is expected to increase some costs to the state fund.
In a statement released by his office, Branstad said the Iowa workers’ comp system over the past decade had “mutated into a system benefiting trial lawyers at the expense of Iowa businesses and Iowa workers.”
He said the bill rebalances the scales “to ensure employees are compensated fairly for being injured on the job, while ensuring that abuses are curtailed. This legislation prevents attorneys from taking fees from injured workers when the employer was voluntarily giving benefits, ends the burden on the employer to demonstrate that intoxicated workers incurred injuries as a result of the intoxication, and ends an individual’s ability to receive workers’ compensation while receiving unemployment insurance.”
The National Council on Compensation Insurance has found the Iowa system overall is fair for employers, according to the Associated Press. The NCCI last year proposed overall decrease in voluntary and assigned risk rates of 4.7 percent that became effective in Iowa on Jan. 1. Rates increased by about 2.2 percent in 2016.
During a March 16 debate on the bill in the House, Rep. Gary Carlson, R-Muscatine, spoke in favor of the bill, saying that it “provides the intended predictability Iowa workplace needs when dealing with workers with injuries and it clarifies the intent of the workers’ compensation system for the commission and courts to properly interpret and administer workers’ compensation system.”
Rep. Gary Wortham, R – Buena Vista, testified that the Iowa workers’ comp system “began to go off the rails” in 2006 “because of changes in interpretation and application of the law.” Wortham, who owns a trucking company, said that workers’ comp rates for his business are so much higher than rates in neighboring states it makes it difficult to compete for business against trucking companies those states.
“I compete every day with South Dakota trucks, in an industry where we measure improvements in a tenth of a cent a mile. And the South Dakota guys have a 2.7 percent advantage over me right off the top,” Wortham said.
However, Democrats overwhelmingly spoke out against the bill, saying it is a bad deal for injured workers.
“What does this bill do? It guts the rights of Iowa workers injured on the job. It cuts payments to workers and it terminates the payments sooner,” said Rep. Monica Kurth, D-Scott, during the House debate. “Responsibility for ongoing medical services, subsidies for lost wages, unmet family needs, these may end up on the shoulders again of Iowans in the form of public assistance because the working Iowan is no longer able to work. … It’s a bad bill.”
Rep. Bruce Hunter, D-Polk, said the bill was written by “those that want to take advantage of workers” He proposed that instead of legislation written solely for the benefit of “Tyson foods and those like them, we need to have legislation that’s not written solely by them, not written solely by employees, but is written by a combination of those people that are going to be affected now and forever by the work comp law that we are going to pass in this body.”
The bill goes into effect on July 1.