Academic journal article Monthly Labor Review

State Workers' Compensation: Significant Legislation in 1989

Academic journal article Monthly Labor Review

State Workers' Compensation: Significant Legislation in 1989

Article excerpt

State workers' compensation: significant legislation in 1989

Among the enactments taken on behalf of injured workers, maximum weekly compensation payments for temporary total disability were increased in 45 States and the Virgin Islands, and many States provided for medical deductibles in insurance policies

In keeping with tradition, 49 States, the District of Columbia, and Puerto Rico were in legislative session during 1989. Kentucky was the only State in which the legislature did not meet. As of late July, more than 1,000 proposals and 245 enactments had been received and legislation was still being processed.

All but five States and Puerto Rico increased maximum weekly payments for temporary total disability. In Colorado, the percentage of the State average weekly wage used for calculating benefits for total disability and death was raised from 80 percent to 91 percent. Two States reversed their method of determining benefits. Arkansas now uses a percentage of the State average weekly wage (66 2/3 percent) as a basis for determining weekly benefit levels, instead of making statutory increases. In Alaska, increases in benefits will be made statutorily instead of being linked to the State average weekly wage.

New legislation in California provides for weekly benefits for disability and death to be increased beginning on January 1, 1990, and again on January 1, 1991. In 1992, weekly payments are scheduled for a 16-percent increase. The cap on weekly benefit levels in Maine and Montana was lifted on July 1, leaving Oklahoma as the only remaining State where benefits are frozen; however, in a special session of the legislature in Montana, the freeze was restored until July 1991.

One State raised the minimum weekly compensation from $25 to $75 in cases of death, and another State approved lifetime benefits for permanent total disabilities. North Dakota increased the weekly allowance for dependent children.

The allowances for burial were raised in Arizona, California, Maryland, and Nevada.

Several States now provide for the inclusion of medical deductibles in workers' compensation insurance policies as a cost savings mechanism. Other jurisdictions have authorized employers who want to become self-insurers to file letters of credit along with their applications for self-insurance, in addition to posting bonds and other security.

The State Workers' Compensation Fund in Hawaii has been reorganized as the State Compensation Mutual Insurance Fund and will operate as a nonprofit independent mutual insurance corporation.

Other significant amendments related to rehabilitation and safety. Penalties and fines were assessed on employers and insurers for various violations of the law. Assessments were also authorized for funding purposes.

Following is a State-by-State summary of legislation enacted.


The Alabama Workmen's Compensation Self-Insurers Guaranty Association was established to set up and provide funding for an insolvency fund to assure payment of claims filed against any insolvent member.


The burial allowance was increased from $1,000 to $3,000.


Lump-sum compensation is now payable when the Workers' Compensation Commission determines that such an arrangement is in the best interests of the employee or the dependents.


As a result of two major enactments, substantive reform in the workers' compensation system will become effective during 1990 and 1991. Reportedly, the new legislation is the first of its kind since 1971.

Maximum weekly benefits for temporary total and permanent total disability will increase on January 1, 1990, to $266 from $224; and on January 1, 1991, to $336. Minimum weekly benefits for temporary total disability will be increased during the same periods from $112 to $168, and from $168 to $189, respectively. …

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