Tennessee Governor Signs Workers’ Compensation Bill

Tennessee’s workers’ compensation system is going to undergo its most significant changes in decades including the creation of a new administrative court system to handle workers’ compensation claims.

Governor Bill Haslam held a ceremonial bill signing on Tuesday at the Clarksville Foundry, one of the state’s oldest ongoing business enterprises dating back to the Civil War.

Haslam, who made workers’ compensation reform a top priority this year, said the new legislation would streamline the workers’ comp system by speeding benefits to injured workers and making Tennessee more attractive to insurers and employers.

“Our legislation brings clarity and fairness to the system and builds on our ongoing efforts to make Tennessee the number one location in the Southeast for high quality jobs,” said Haslam in a statement.

Tenn. Gov. Bill Haslam AP Photo
Tenn. Gov. Bill Haslam
AP Photo

Central to the reforms is moving the state’s workers’ compensation claims process from a tort system to an administrative one.

Currently, workers injured at work must first file a request for assistance with the state’s Division of Workers’ Compensation. There a specialist reviews the claims and either denies it or orders an insurer to pay the claim. A worker or an employer can then appeal the decision, but once those efforts are exhausted it is up to the state’s civil courts to resolve the claims.

Insurers said that led to unpredictable and inconsistent rulings in similar workers’ compensation claims and is at odds with the no-fault nature of workers’ compensation insurance.

The new law will create an administrative claims handling process whereby workers’ compensation experts will solely adjudicate claims. It also crates a new ombudsman to help unrepresented injured employees and employers navigate the workers’ compensation system.

The legislation also includes several other provisions designed to improve the system’s efficiency. It establshes medical treatment guidelines and provides a clearer standard to determine to what degree an injured worker’s medical condition may have contributed to the cause of an on-the-job injury.

The legislation clarifies that the law will be applied on a neutral basis. Critics of the old law complained that it gave wide leeway for judges to rule in injured workers’ favor. For example, a judge could increase an injured worker’s benefits six times higher than the maximum impairment rating.

Insurers argued that by tilting the law in favor of injured workers the system encouraged them to not return to work or settle their claims. Under the new law, insurers say, injured workers will have a greater incentive to resolve their claim and return to work.

American Insurance Association Southeast Region Vice President Ron Jackson praised state lawmakers and Haslam for tackling workers compensation reforms. He said the provision moving the state to an administrative claims dispute resolution process will better serve injured workers and employers.

“This provision, along with other improving the flow of medical information and authorizing the adoption of medical treatment guidelines will significantly improve the workers’ compensation system,” said Jackson in a statement.