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This newsletter is to inform you of Senate Bill 131, and the changes that are coming to the Alaska Workers’ Compensation Act on January 1, 2023.
Permanent Partial Impairment
Most notably, for the first time in 22 years, the legislature is amending
AS 23.30.190 to increase permanent partial impairment (PPI) benefits. Under the
new law, you will need to multiply an injured worker’s impairment rating
percentage by $273,000, rather than by $177,000 under the current law. This
increase is effective on January 1, 2023, meaning that it will apply to
injuries sustained on or after January 1, 2023. For dates of injury before
January 1, 2023, you will continue to calculate PPI awards by multiplying the
percentage of impairment by $177,000. For injuries on or after January 1, 2023,
the PPI award will be the percentage of impairment multiplied by $273,000. The dollar
amount is the only aspect of AS 23.30.190 that is changing, the rest of the law
will remain intact.
Changes to death benefits under AS 23.30.215 will also go into effect on January 1, 2023. Under the new law, benefits for reasonable and necessary funeral costs increase to $12,000. The amount payable to surviving widows/widowers, or surviving children increases from $5,000 to $8,000. SB 131 substantially increases the maximum payable allowable to a deceased worker’s dependent father, mother, grandchildren, brothers, and sisters. After January 1, 2023, beneficiaries under AS 23.30.215(a)(4) may receive up to $150,000.00 in death benefits. This represents a $130,000 increase from the current maximum of $20,000, which was set in 1968. SB 131 will create a new subsection to AS 23.30.215, which will permit death benefits to a child beneficiary until they are 23. This is a four-year increase in benefits under the current law, and it does not preclude children of deceased workers from receiving an additional four years of benefits during post-high school education under AS 23.30.395(8) The various changes to death benefits under AS 23.30.215 only apply to deaths that occur on or after January 1, 2023.
For most insurers, the remaining changes in SB 131 will not impact you. It will amend AS 23.30.121, which only applies to firefighters. In recognition of increased cancer risks for women, the legislature is adding a presumption of compensability for breast cancer following exposure to smoke, fumes, or toxic substances. SB 131 also amends the definition of “firefighter” to clarify which firefighters who work for the state, municipal, or volunteer departments may come within the provisions of AS 23.30.121. Unlike claims for PPI or death benefits, firefighters with injuries prior to January 1, 2023, can apply the legislative changes to AS 23.30.121 going into effect that day. The amendments to AS 23.30.121 will apply to claims made after January 1, 2023.
If you have any questions regarding the impact of SB 131 and its effect on exposures and benefits owed, please reach out to any of the attorneys at our office, and we will be happy to help.
Alaska Statute 23.30.395(24) includes in its definition of an injury, “an occupational disease or infection that arises naturally out of the employment or that naturally or unavoidably results from an accidental injury.” It is well established that a virus such as COVID-19, or Coronavirus, is an illness that if contracted in the workplace, would entitle the affected worker to workers’ compensation benefits that may arise from the illness.
The Alaska Supreme Court, in *Delaney v. Alaska Airlines, *held that in order to succeed in a claim for an “occupational disease” or illness, an employee must show that: 1) the disease was caused by the conditions of their employment; and 2) as a result of the conditions of the employment, the risk of contracting the disease is greater than that which generally prevails in employment and living conditions. In a claim for Coronavirus, the Board would evaluate this two-prong test at the first step of the compensability analysis. Both elements must be satisfied to create the “preliminary link” between employment and the claimed workplace disease. The Alaska Supreme Court described the rationale for requiring a “preliminary link” before finding a worker is entitled to workers’ compensation benefits as, “… the idea is to rule out cases in which claimant can show neither that the injury occurred in the course of employment nor that it arose out of it, as where he contracted the disease but has no evidence to show where he got it. In claims that are ‘based upon highly technical medical considerations,’ medical evidence will likely be necessary for the employee to meet their burden of showing a ‘preliminary link.’”
In reviewing claims for Coronavirus, the Board would likely find that the disease is a “highly technical medical consideration” and require some medical evidence that the worker has contracted the virus. Once medical evidence establishes that a person has the virus, they will also need to show that they contracted it through the conditions of their employment. The Alaska Supreme Court has held that this requirement is intended to bar claims where an employee “has no evidence” that they contracted an illness out of the course of their employment. Employees seeking benefits for Coronavirus would likely need to prevail on one of the two theories of compensability for occupational disease. If the employee can show evidence of direct contact with a person positive for Coronavirus in the workplace, the presumption of compensability will have attached. Or, alternatively, if the employee can show that the condition of their employment exposed them to a greater risk of contracting the disease than the general public, there is also a good chance that the Board would find a preliminary link between the employment and the disability or need for treatment, and the employer and its carrier may be liable.
If the employee can establish the “preliminary link,” the employer must rebut the presumption, or pay benefits on the claim. In *Huit v. Ashwater Burns,* the Alaska Supreme Court held that rebutting the presumption requires the employer to either eliminate the possibility that the illness was related to the employment, or show that some other source outside of the employment caused the disease. It will be difficult to rebut the presumption in cases where the claimant can show direct contact with an infected person in the workplace. In such instances, benefits will likely need to be paid for any disability or need for treatment related to the Coronavirus. Employers and their insurers should have more factual grounds to dispute a claimant’s assertion that their workplace has placed them at a greater risk for contracting the virus than the general population. Factors to consider are how many people might the claimant come in close contact with on an average day, were there safety precautions such as hand sanitizing stations or masks, or other measures in the workplace to reduce the likelihood of spreading the disease was acquired through work exposure.
We recommend that Alaska employers and their insurers and adjusters be prepared for an influx of claims related to the Coronavirus. Actions are being taken at the local and State level to minimize the spread of the virus, and as a result of keeping people away from workplaces that have high risks for spreading the disease, it could result in a significant decrease in the potential burden on employers and their workers’ compensation carriers during this pandemic. Where possible, employers are encouraged to take steps in reducing the possibility of spreading the disease in the workplace. By doing so, it may improve chances of convincing the Board that the person’s employment did not place the claimant at greater risk of getting the disease than the general population.
Claims should be closely evaluated when they come in for whether they satisfy the first step of the presumption analysis and create the preliminary link between their employment and their illness. It will be during that first step of the presumption analysis that employers will have the best chance to successfully deny a claim, because once the presumption has been attached, it may be difficult to successfully rebut under the standard articulated by the Court in *Huit*. Please feel free to contact us if there is more information we can provide on this issue.
Below are informational links from the Division about how COVID-19 is effecting Board and Appeals Commission procedures and from the State of Alaska regarding its mandates which may affect medical care in workers’ compensation claims. Please note that these bulletins and mandates can change.
We wish you all good health!
Meshke Paddock & Budzinski, P.C.
September 5, 2013Commission Keeps Claimant's Counsel and Recording Devices out of Employer's Medical Evaluations
by Merrilee Harrell
A recent decision of the Alaska Workers’ Compensation Appeals Commission concluded that claimant’s counsel may not attend and record an employer’s independent medical evaluation (EME) unless the examining physician consents. InASRC Energy Services, Inc. v. Kollman, AWCAC Decision No. 186 (August 21, 2013), the Commission reversed an interlocutory decision of the Alaska Workers’ Compensation Board that injured worker Jeffrey Kollman may record an EME and have a witness present despite the objection of the employer’s physicians. Kollman v. ASRC Energy Services, Inc., AWCB Decision No. 13-0076 (June 27, 2013). The Board had relied onLangfeldt-Haaland v. Saupe Enterprises, 768 P.2d 1144 (Alaska 1989), which held that a civil litigant had a right to record a court-ordered Rule 35 medical evaluation and have his attorney present during the evaluation. On appeal, the Commission noted that Civil Rule 35 is significantly different from AS 23.30.095(e) of the Alaska Workers’ Compensation Act. AS 23.30.095(e) states that “The employee shall... submit to an examination by a physician or surgeon of the employer’s choice...” which, the Commission noted, leaves the choice of EME physician exclusively with the employer. A Rule 35 medical evaluation, in contrast, may be ordered by a judge “only on motion for good cause shown and upon notice... to all parties and shall specify the time, place, manner, conditions, and scope of the examination and the person or persons by whom it is to be made.”
The Commission also noted that Langfeldt-Haaland was a 3-2 decision that explicitly limited its holding to Civil Rule 35 medical evaluations. The majority had argued the importance of allowing counsel to “observe shortcomings and improprieties during the examination which could be the subject of inquiries on cross-examination at trial; and ... [to] object to questions posed to the plaintiff during the examination that concern privileged information.” The dissenting judges pointed out that “adopting such a rule could have a chilling effect on otherwise reputable physicians performing medical examinations.” The Commission found the dissent’s position more persuasive, and also took into account a survey of SIME physicians that showed a significant percentage of the physicians surveyed would decline to perform evaluations if they were required to allow the evaluation to be witnessed and recorded. Requiring EME evaluations to be witnessed and recorded would thus have a chilling effect on the employer’s choice of physician if the employer’s choice was limited by such a requirement.
The commission emphasized that the plain language of AS 23.30.095(e) gives the employer the exclusive choice of EME physician, noting that the statute “does not say that the choice of an EME physician is exclusively the employer’s, provided that the employer chooses a physician who would allow witnessing and recording of the EME.” The commission concluded that such a restriction would interfere with the employer’s choice of physician as contemplated by AS 23.30.095(e). Kollman has appealed the Commission’s ruling to the Alaska Supreme Court.
Russell, Wagg, Gabbert & Budzinski510 L Street, Suite 300Anchorage, AK 99501-1952907-258-1747
========RWGB seeks to provide the latest information on workers' compensation law in Alaska. The information provided above is based upon the decision of the Alaska Workers' Compensation Appeals Commission and is subject to change on appeal. RWGB will issue an updated newsletter should the Alaska Supreme Court overrule the Commission's decision.
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