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House of Representatives
Session of 2017 - 2018 Regular Session

MEMORANDUM

Posted:	August 17, 2017 04:01 PM
From:	Representative Rob W. Kauffman and Rep. Garth D. Everett
To:	All House members
Subject:	Protz Workers Compensation Legislative Fix

A recent PA Supreme Court ruling invalidated a provision of PA’s 1996 Workers’ Compensation reforms that allows employers to request an Impairment Rating Evaluation (IRE) after an injured worker has been out of the workplace for 104 weeks. The IRE process helps to lower workers’ compensation costs by providing certainty for insurers and employers, as well as injured workers, and it incentivized injured workers to attempt to return to work. The Court did not find any constitutional problems with the IRE process itself, but disagreed with the method the Act provided for updates to the standards for evaluating a worker’s degree of impairment. We plan to introduce legislation to address the PA Supreme Court’s and prevent the significant increases in workers’ compensation insurance premiums that employers will experience as the result of this decision. These Workers’ Compensation reforms have been in place for more than 20 years and have worked as intended. According to the PA Compensation Ratings Bureau (PCRB), the 1996 reforms, along with other reforms enacted in the 1990’s, contributed to a 62.3% reduction in loss costs (a major component in the calculation of insurance premiums). The Supreme Court’s ruling will put workers’ compensation premiums on track to reverse course and increase dramatically. As the result of this decision, the PCRB took the very unusual step of filing for an increase of loss costs of 6.06% in the middle of the current policy year. Our legislation is narrowly focused and will simply repeal the subsection invalidated by the court, and reenact the language, clarifying the guidelines to be used for IREs. We are not proposing any substantive policy changes to the IRE process or the Act – this bill is merely intended to address the issue identified in the Court’s ruling. Please join us and cosponsor this important legislation which will save employers from significant increases in workers’ compensation premiums. If you need further information on this issue, please feel free to contact one of us or John Scarpato, Executive Director for the House Labor and Industry Committee.

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