HOUSE AMENDED
PRIOR PRINTER'S NOS. 1592, 1739, 1592, PRINTER'S No. 2019
1934
No. 1244 Session of 1999
INTRODUCED BY ARMSTRONG, KUKOVICH, MELLOW, BELAN AND WAGNER,
DECEMBER 9, 1999
AS REPORTED FROM COMMITTEE ON LABOR RELATIONS, HOUSE OF
REPRESENTATIVES, AS AMENDED, JUNE 7, 2000
AN ACT
1 Amending the act of June 2, 1915 (P.L.736, No.338), entitled, as
2 reenacted and amended, "An act defining the liability of an
3 employer to pay damages for injuries received by an employe
4 in the course of employment; establishing an elective
5 schedule of compensation; providing procedure for the
6 determination of liability and compensation thereunder; and
7 prescribing penalties," further providing for assessments;
8 providing for payments of claims for benefits to certain
9 individuals; and establishing rights and obligations of the
10 Department of Labor and Industry.
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. Section 446(b) of the act of June 2, 1915
14 (P.L.736, No.338), known as the Workers' Compensation Act,
15 reenacted and amended June 21, 1939 (P.L.520, No.281) and added
16 February 2, 1976 (P.L.2, No.2), is amended to read:
17 Section 446. * * *
18 (b) The fund shall be maintained by no more than one (1)
19 annual assessment payable in any calendar year on insurers and
20 self-insurers under this act, including the State [Workmen's]
1 Workers' Insurance Fund. [The initial assessment for the period
2 commencing July 1, 1975 through December 31, 1976, shall be
3 seven per centum of the total compensation paid by each insurer,
4 self-insurer and the State Workmen's Insurance Fund in the
5 calendar year 1974.] After the initial term, budgeted expenses
6 shall be approved by the General Assembly on a fiscal year
7 basis. Thereafter, the department shall make assessments and
8 collect moneys based on the ratio that such insurer's or self-
9 insurer's payments of compensation bear to the total
10 compensation paid in the preceding calendar year in which the
11 assessment is made. The total amount assessed shall be the
12 approved budget. If on January 31, there exists in the
13 administration fund any money in excess of [one hundred fifty]
14 one hundred thirty-three per centum of the current budget the
15 following fiscal year's assessment shall be reduced by an amount
16 equal to that excess amount.
17 * * *
18 Section 2. The act is amended by adding sections to read: <--
19 Section 451. (a) The term "account," when used in this
20 article, shall mean the Prefund Account established in section
21 451.1(a).
22 The term "defaulted self-insured employer," when used in this
23 article, shall mean an employer exempted by the Department of
24 Labor and Industry from the requirement to insure its liability
25 under section 305 of this act or section 305 of the act of June
26 21, 1939 (P.L.566, No.284), known as "The Pennsylvania
27 Occupational Disease Act," for claims on injuries or exposures
28 to the hazard of disease which occurred prior to October 30,
29 1993, and which has failed to pay that liability due to its
30 financial inability or due to it filing for bankruptcy or being
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1 declared bankrupt or insolvent.
2 The term "fiscal year," when used in this article, shall mean
3 the fiscal year of the Commonwealth of Pennsylvania.
4 The term "prefund claimant," when used in this article, shall
5 mean an employe or a dependent of an employe of a defaulted
6 self-insured employer who is entitled to benefits under this act
7 or the act of June 21, 1939 (P.L.566, No.284), known as "The
8 Pennsylvania Occupational Disease Act," as the result of an
9 injury or exposure to hazard of disease which occurred prior to
10 October 30, 1993.
11 The term "security," when used in this article, shall mean
12 surety bonds, cash, negotiable securities of the United States
13 or the Commonwealth or letters of credit posted by a defaulted
14 self-insured employer to guaranty the payment of its workers'
15 compensation liability.
16 The term "Self-Insurance Guaranty Fund," when used in this
17 article, shall mean the special fund established in section 902.
18 The term "Workmen's Compensation Administration Fund," when
19 used in this article, shall mean the special fund established in
20 section 446.
21 Section 451.1. (a) There is established in the Self-
22 Insurance Guaranty Fund a restricted account known as the
23 Prefund Account. The department shall annually transfer up to
24 one million two hundred thousand dollars ($1,200,000) of
25 accumulated interest in the Workmen's Compensation
26 Administration Fund to the account.
27 (b) Accumulated interest in the Workmen's Compensation
28 Administration Fund is specifically appropriated to the
29 department on a continuing basis in such amounts as are
30 necessary for the purpose of this section. The secretary shall
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1 have the power to dispense and disburse accumulated interest in
2 the Workmen's Compensation Administration Fund under this
3 section.
4 (c) Transfers to the account pursuant to subsection (a)
5 shall be used to pay claims for loss of wages occurring or
6 medical treatment provided after the effective date of this
7 section under sections 306(a), (b), (c) and (f.1) and 307 under
8 the act of June 21, 1939 (P.L.566, No.284), known as "The
9 Pennsylvania Occupational Disease Act" to a prefund claimant
10 upon exhaustion of the security posted by the liable defaulted
11 self-insured employer, Provided, that:
12 (1) the benefits are payable under an award from a petition,
13 a notice of compensation payable or an agreement for
14 compensation that was filed with the department before January
15 1, 1996;
16 (2) payments from the account are not used to pay interest,
17 penalties or attorney fees related to the payment of benefits;
18 and
19 (3) payments from the account are used to pay claims for
20 benefits relating to medical treatment under section 306(f.1)
21 which are not covered by other types of insurance or Federal,
22 State or private benefit programs.
23 (d) If the department projects that the aggregate payments
24 to prefund claimants pursuant to this section during any one
25 fiscal year may exceed the transfer to the account for that
26 year, the secretary may order the payment of benefits under
27 sections 306(a), (b) and (c) and 307 at a percentage of the full
28 amounts payable under this act. The percentage shall be
29 uniformly applied to all benefits under those sections paid
30 during that fiscal year. The secretary may adjust that
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1 percentage from time to time as is necessary based on updated
2 projections on payment of benefits.
3 Section 3. This act shall take effect in 60 days.
4 SECTION 2. SECTION 901 OF THE ACT, ADDED JULY 2, 1993 <--
5 (P.L.190, NO.44), IS AMENDED TO READ:
6 SECTION 901. THE FOLLOWING WORDS AND PHRASES WHEN USED IN
7 THIS ARTICLE SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS
8 SECTION UNLESS THE CONTEXT CLEARLY INDICATES OTHERWISE:
9 "ACCOUNT" MEANS THE PREFUND ACCOUNT ESTABLISHED IN SECTION
10 909(A).
11 "COMPENSATION" MEANS BENEFITS PAID PURSUANT TO SECTIONS 306
12 AND 307.
13 "DEFAULTED SELF-INSURER" MEANS AN EMPLOYER EXEMPTED BY THE
14 DEPARTMENT OF LABOR AND INDUSTRY FROM THE REQUIREMENT TO INSURE
15 ITS LIABILITY UNDER THIS ACT OR UNDER SECTION 305 OF THE ACT OF
16 JUNE 21, 1939 (P.L.566, NO.284), KNOWN AS "THE PENNSYLVANIA
17 OCCUPATIONAL DISEASE ACT," FOR CLAIMS ON INJURIES OR EXPOSURES
18 TO THE HAZARD OF DISEASE WHICH OCCURRED PRIOR TO OCTOBER 30,
19 1993, AND WHICH HAS FAILED TO PAY THAT LIABILITY DUE TO ITS
20 FINANCIAL INABILITY OR DUE TO ITS FILING FOR BANKRUPTCY OR BEING
21 DECLARED BANKRUPT OR INSOLVENT.
22 "EMPLOYER" MEANS A SELF-INSURED EMPLOYER OR THE EMPLOYER AS
23 DEFINED IN THIS ACT.
24 "FISCAL YEAR" MEANS THE FISCAL YEAR OF THE COMMONWEALTH.
25 "GUARANTY FUND" OR "FUND" MEANS THE SELF-INSURANCE GUARANTY
26 FUND ESTABLISHED IN SECTION 902 FOR INJURIES AND EXPOSURES
27 OCCURRING ON OR AFTER THE ESTABLISHMENT OF THE SELF-INSURANCE
28 GUARANTY FUND.
29 "PREFUND CLAIMANT" MEANS AN EMPLOYE OR A DEPENDENT OF AN
30 EMPLOYE OF A DEFAULTED SELF-INSURER WHO IS ENTITLED TO BENEFITS
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1 UNDER THIS ACT OR THE ACT OF JUNE 21, 1939 (P.L.566, NO.284),
2 KNOWN AS "THE PENNSYLVANIA OCCUPATIONAL DISEASE ACT," AS THE
3 RESULT OF INJURY OR EXPOSURE TO THE HAZARD OF DISEASE WHICH
4 OCCURRED PRIOR TO OCTOBER 30, 1993.
5 "SECURITY" MEANS SURETY BONDS, CASH, NEGOTIABLE SECURITIES OF
6 THE UNITED STATES GOVERNMENT OR THE COMMONWEALTH OR OTHER
7 NEGOTIABLE SECURITIES, SUCH AS LETTER OF CREDIT, ACCEPTABLE TO
8 THE DEPARTMENT WHICH ARE POSTED BY THE FUND TO GUARANTY THE
9 PAYMENT OF WORKERS' COMPENSATION BENEFITS.
10 "SELF-INSURER" MEANS AN EMPLOYER EXEMPTED UNDER SECTION 305
11 OR A GROUP SELF-INSURANCE FUND PERMITTED TO OPERATE UNDER
12 ARTICLE VIII.
13 "WORKMEN'S COMPENSATION ADMINISTRATION FUND" MEANS THE
14 SPECIAL FUND ESTABLISHED IN SECTION 446.
15 SECTION 3. THE ACT IS AMENDED BY ADDING A SECTION TO READ:
16 SECTION 909. (A) THERE IS ESTABLISHED IN THE SELF-INSURANCE
17 GUARANTY FUND A RESTRICTED ACCOUNT KNOWN AS THE PREFUND ACCOUNT.
18 THE DEPARTMENT SHALL ANNUALLY TRANSFER UP TO ONE MILLION SIX
19 HUNDRED THOUSAND DOLLARS ($1,600,000) OF ACCUMULATED INTEREST IN
20 THE WORKMEN'S COMPENSATION ADMINISTRATION FUND TO THE ACCOUNT.
21 (B) ACCUMULATED INTEREST IN THE WORKMEN'S COMPENSATION
22 ADMINISTRATION FUND IS SPECIFICALLY APPROPRIATED TO THE
23 DEPARTMENT ON A CONTINUING BASIS IN SUCH AMOUNTS AS ARE
24 NECESSARY FOR THE PURPOSE OF THIS SECTION. THE SECRETARY SHALL
25 HAVE THE POWER TO DISPENSE AND DISBURSE ACCUMULATED INTEREST IN
26 THE WORKMEN'S COMPENSATION ADMINISTRATION FUND UNDER THIS
27 SECTION.
28 (C) TRANSFERS TO THE ACCOUNT PURSUANT TO SUBSECTION (A)
29 SHALL BE USED TO PAY CLAIMS FOR LOSS OF WAGES OCCURRING OR
30 MEDICAL TREATMENT PROVIDED AFTER THE EFFECTIVE DATE OF THIS
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1 SECTION UNDER SECTIONS 306(A), (B), (C) AND (F.1) AND 307 OF
2 THIS ACT OR UNDER SECTIONS 306(A), (B) AND (C) AND 307 OF THE
3 ACT OF JUNE 21, 1939 (P.L.566, NO.284), KNOWN AS "THE
4 PENNSYLVANIA OCCUPATIONAL DISEASE ACT" TO A PREFUND CLAIMANT
5 UPON EXHAUSTION OF THE SECURITY POSTED BY THE LIABLE DEFAULTED
6 SELF-INSURER, PROVIDED, THAT:
7 (1) THE BENEFITS ARE PAYABLE UNDER A NOTICE OF COMPENSATION
8 PAYABLE, AN AGREEMENT FOR COMPENSATION OR A PETITION FOR
9 COMPENSATION AND THE PETITION, NOTICE OR AGREEMENT WAS FILED
10 WITH THE DEPARTMENT BEFORE JANUARY 1, 1997;
11 (2) PAYMENTS FROM THE ACCOUNT ARE NOT USED TO PAY INTEREST,
12 PENALTIES OR ATTORNEY FEES RELATED TO THE PAYMENT OF BENEFITS;
13 (3) PAYMENTS FROM THE ACCOUNT ARE USED TO PAY CLAIMS FOR
14 BENEFITS RELATING TO MEDICAL TREATMENT UNDER SECTION 306(F.1) OF
15 THIS ACT THAT ARE NOT COVERED OR NOT PAID FOR, IN WHOLE OR IN
16 PART, BY OTHER TYPES OF INSURANCE OR FEDERAL, STATE OR PRIVATE
17 BENEFIT PROGRAMS;
18 (4) THIS SECTION SHALL NOT BE CONSTRUED TO REQUIRE PAYMENT
19 OF CLAIMS FOR BENEFITS WHEN TRANSFERS TO THE ACCOUNT PURSUANT TO
20 SUBSECTION (A) ARE INSUFFICIENT TO SATISFY CLAIMS FOR BENEFITS
21 BY PREFUND CLAIMANTS EXCEPT TO THE EXTENT REQUIRED BY SUBSECTION
22 (E)(1); AND
23 (5) THE RECEIPT OF BENEFITS UNDER THIS SECTION IS SUBJECT TO
24 THE LAW IN EFFECT AS OF THE EFFECTIVE DATE OF THIS SECTION AND
25 NOT THE DATE OF AN AWARD FROM A PETITION, A NOTICE OF
26 COMPENSATION PAYABLE OR AN AGREEMENT FOR COMPENSATION.
27 (D) WHEN PAYMENTS ARE MADE FROM THE ACCOUNT ON BEHALF OF A
28 DEFAULTED SELF-INSURER, THE DEPARTMENT ASSUMES THE RIGHTS AND
29 OBLIGATIONS OF THE DEFAULTED SELF-INSURER UNDER THIS ACT AND
30 "THE PENNSYLVANIA OCCUPATIONAL DISEASE ACT" WITH REGARD TO THE
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1 PAYMENT OF CLAIMS. THE DEPARTMENT SHALL HAVE THE RIGHT TO:
2 (1) INITIATE AND PROSECUTE LEGAL ACTION AGAINST THE
3 DEFAULTED SELF-INSURER TO REQUIRE THE PAYMENT OF BENEFITS UNDER
4 THIS ACT OR "THE PENNSYLVANIA OCCUPATIONAL DISEASE ACT."
5 (2) OBTAIN, IN ANY MANNER OR BY USE OF ANY PROCESS OR
6 PROCEDURE, INCLUDING THE COMMENCEMENT AND PROSECUTION OF LEGAL
7 ACTION, REIMBURSEMENT FROM A DEFAULTED SELF-INSURER AND ITS
8 SUCCESSOR, ASSIGNS AND ESTATE ALL PAYMENTS FROM THE ACCOUNT TO
9 ITS PREFUND CLAIMANTS, INCLUDING REIMBURSEMENT OF ALL BENEFITS
10 PAID AS WELL AS REASONABLE ADMINISTRATIVE AND LEGAL COSTS
11 ASSOCIATED WITH THE PAYMENT.
12 (E) THE FOLLOWING SHALL APPLY:
13 (1) IF THE DEPARTMENT PROJECTS THAT THE AGGREGATE PAYMENTS
14 TO PREFUND CLAIMANTS PURSUANT TO THIS SECTION DURING ANY ONE
15 FISCAL YEAR MAY EXCEED THE TRANSFER TO THE ACCOUNT FOR THAT
16 YEAR, THE SECRETARY SHALL ORDER THE PAYMENT OF BENEFITS UNDER
17 SECTIONS 306(A), (B) AND (C) AND 307 AT A PERCENTAGE OF THE FULL
18 AMOUNTS PAYABLE UNDER THIS ACT AND "THE PENNSYLVANIA
19 OCCUPATIONAL DISEASE ACT." THE PERCENTAGE SHALL BE UNIFORMLY
20 APPLIED TO ALL BENEFITS UNDER THOSE SECTIONS PAID DURING THAT
21 FISCAL YEAR. THE SECRETARY SHALL ADJUST THAT PERCENTAGE FROM
22 TIME TO TIME AS IS NECESSARY BASED ON UPDATED PROJECTIONS ON
23 PAYMENT OF BENEFITS.
24 (2) TO TAKE ACTION UNDER PARAGRAPH (1), THE DEPARTMENT MUST
25 PROVIDE A MINIMUM OF SIXTY (60) DAYS' NOTICE TO THE GENERAL
26 ASSEMBLY OF THE IMPENDING ACTION. THE NOTICE MUST BE IN THE FORM
27 OF A WRITTEN REPORT OF THE PENDING FUNDING SHORTFALL TO THE
28 CHAIRPERSONS AND THE MINORITY CHAIRPERSONS OF THE APPROPRIATIONS
29 COMMITTEE AND THE LABOR AND INDUSTRY COMMITTEE OF THE SENATE AND
30 THE CHAIRPERSONS AND THE MINORITY CHAIRPERSONS OF THE
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1 APPROPRIATIONS COMMITTEE AND THE LABOR RELATIONS COMMITTEE OF
2 THE HOUSE OF REPRESENTATIVES. THE GENERAL ASSEMBLY MAY
3 APPROPRIATE SUFFICIENT FUNDS TO THE ACCOUNT TO CONTINUE FULL
4 PAYMENT OF BENEFITS TO PREFUND CLAIMANTS FOR THAT FISCAL YEAR.
5 (F) A PREFUND CLAIMANT SHALL, WITHIN THREE YEARS OF THE
6 EFFECTIVE DATE OF THIS SECTION, OR WITHIN THREE YEARS OF LAST
7 RECEIVING BENEFITS FROM A DEFAULTED SELF-INSURER OR ITS
8 SECURITY, WHICHEVER OCCURS LATER, FORWARD TO THE DEPARTMENT AN
9 APPLICATION FOR BENEFITS THAT INCLUDES ALL OF THE FOLLOWING:
10 (1) NAME OF THE PREFUND CLAIMANT.
11 (2) THE PREFUND CLAIMANT'S SOCIAL SECURITY NUMBER.
12 (3) THE DEPARTMENT CLAIM NUMBER OF THE CLAIM FOR WHICH
13 BENEFITS ARE REQUESTED, IF KNOWN.
14 (4) THE PREFUND CLAIMANT'S DATE OF BIRTH.
15 (5) THE DATE OF INJURY GIVING RISE TO THE CLAIM.
16 (6) THE NAME OF THE EMPLOYER AT THE TIME OF INJURY.
17 (7) IF KNOWN, THE DATE OF RECEIPT OF THE LAST PAYMENT FROM
18 THE DEFAULTED SELF-INSURER OR ITS SECURITY.
19 (8) THE AMOUNT OF CURRENT WAGES FROM CURRENT EMPLOYMENT OR
20 SELF-EMPLOYMENT.
21 (9) A SIGNATURE CERTIFYING THAT THE REQUEST FOR BENEFITS IS
22 TRUE AND CORRECT AND THAT THE PREFUND CLAIMANT IS AWARE OF THE
23 PENALTIES PROVIDED BY LAW FOR MAKING FALSE STATEMENTS FOR THE
24 PURPOSE OF OBTAINING BENEFITS.
25 (10) ANY OTHER INFORMATION REQUIRED BY THE DEPARTMENT THAT
26 IS RELEVANT IN DETERMINING THE ENTITLEMENT TO OR AMOUNT OF
27 BENEFITS.
28 (G) NOTHING IN THIS SECTION SHALL BE CONSTRUED TO REQUIRE
29 THE DEPARTMENT TO MAKE WAGE LOSS PAYMENTS TO AN INDIVIDUAL WHO
30 IS CURRENTLY RECEIVING WAGES EQUAL TO OR IN EXCESS OF THE
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1 BENEFIT THEY WOULD RECEIVE UNDER THIS SECTION. NOTHING IN THIS
2 SECTION SHALL BE CONSTRUED TO REQUIRE THE DEPARTMENT TO MAKE A
3 WAGE LOSS PAYMENT THAT WOULD RESULT IN AN INDIVIDUAL RECEIVING
4 MORE IN WAGES AND COMPENSATION COMBINED THAN HIS PRE-INJURY
5 WAGE.
6 (H) APPLICATIONS AND OTHER INFORMATION SUBMITTED TO THE
7 DEPARTMENT UNDER THIS SECTION AND SECTION 305 SHALL NOT BE
8 PUBLIC RECORDS FOR PURPOSES OF THE ACT OF JUNE 21, 1957
9 (P.L.390, NO.212), REFERRED TO AS THE RIGHT-TO-KNOW LAW, AND
10 SHALL NOT BE SUBJECT TO PUBLIC DISCLOSURE.
11 SECTION 4. THIS ACT SHALL TAKE EFFECT IN 60 DAYS.
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