State News : Tennessee

January 2024

Tennessee Courts Clarify Notice Defense

In June of 2023, the Workers’ Compensation Appeals Board (the “Board”) decided Ernstes v. Printpack. The holding in this case resulted in a fundamental shift in the understanding of the notice statute and defense penned in T.C.A. § 50-6-201. Confusion arose surrounding the language in the statute regarding (1) failure to give notice; and (2) defective notice. Ernstes was appealed, remanded, and appealed again, before the Board clarified the issue. The Board’s decision was upheld by the Supreme Court of Tennessee, Special Workers’ Compensation Appeals Panel, on January 2, 2024.

The facts surrounding Ernstes are quite simple: an employee worked for a company for thirty-three years, where her job exposed her to loud noises; the employee retired and noticed issues with her hearing; the employee saw a physician who determined that she suffered from substantial hearing loss; the following year, the employee, while sitting with her husband’s workers’ compensation attorney for a hearing loss issue, connected the dots; the employee notified the employer and filed a petition. This notice was untimely.

The lower court battled back and forth over the correct answer to whether the notice given was acceptable, albeit late.  In the first appeal, the Board concluded that the notice was not timely, but remanded the case for determination of whether the employee had a reasonable excuse, and whether the employer had suffered any prejudice due to the lack of notice. This lower court held that the employee offered no reasonable excuse, but the employer had not shown prejudice, and the original award of benefits was reinstated. The case was again appealed.

After the second appeal, the Board caught on to the confusion. The lower court was applying subdivisions (a)(1) and (a)(3) of § 50-6-201 synonymously in this case. The Board clarified that these subdivisions are separated in the Code for a reason. Subdivision (a)(1) applies to failure to give timely notice. Conversely, subdivision (a)(3) applies to defective notice. These are wholly different scenarios. At this point, the Board stepped in to “[draw] a distinction between untimely notice and defective notice and the burden accompanying each notice deficiency.”

The Board held: Firstly, in cases involving the lack of timely written notice, the employee bears the burden of proving that (1) timely written notice was provided; (2) the employer had actual knowledge of the accident or injury; or (3) the employee has a reasonable excuse for the failure to provide timely written notice. Secondly, when an employer affirmatively asserts a defect or inaccuracy in the written notice, the burden shifts to the employer to prove prejudice. Therein lies the problem the court faced in the Ernstes case – defective notice was not asserted, no reasonable excuse was provided, and prejudice to employer was not applicable for this lack-of-timely-notice case.

The lower court could not ignore subdivision (a)(1) – requiring a reasonable excuse for failure to provide timely notice – and instead apply subdivision (a)(3), forcing the employer to show prejudice. This comingling of statutory burdens allowed the lower court to arrive at an incorrect result. This clarification from the Board recognizes an overlooked distinction that attorneys, adjusters, employers, and employees, must take into further consideration – and more acutely consider – for cases pending from this point onward.

For any questions, please contact:

Fredrick R. Baker, Member
Brendan Walsh, Associate
Wimberly Lawson Wright Daves & Jones, PLLC
1420 Neal Street, Suite 201
P.O. Box 655
Cookeville, TN 38503-0655
Phone: 931-372-9123
Fax:  931-372-9181
fbaker@wimberlylawson.com
bwalsh@wimberlylawson.com
www.wimberlylawson.com

Tennessee Enacts Workers’ Compensation Statutory Changes Addressing Penalties, Attorney’s Fees, Death Benefits, and PTSD for Firefighters

June 2023

On April 13, 2023, Tennessee Governor Bill Lee Signed Public Chapter 145, which brought about changes impacting several different areas of the Tennessee Workers’ Compensation Law.

I.                     Penalties for Failure to Pay Medical Expenses Pursuant to Court Order

Under current law, Tenn. Code. Ann. § 50-6-118(d)(1) provides that if an employer or workers’ compensation insurance carrier “wrongfully” fails to reimburse an employee for medical expenses paid by the employee within 60 days of a settlement or court order, or if an employer or workers’ compensation insurance carrier fails to provide medical treatment pursuant to a settlement or court order, then a penalty can be assessed in an amount up to 25% of the medical expenses. Before this penalty is applicable, the employer or carrier must have acted “in bad faith.” Public Chapter 145 will lower the standard necessary for the imposition of this penalty. First, it changes the standard from “wrongfully” to “unreasonably.” Second, it removes the requirement of “in bad faith.” These changes should lower the standard for employers and carriers to be penalized for these infractions. However, Public Chapter 145 did add additional language relieving employers and carriers from liability for this penalty if the medical expense/treatment is paid/authorized within 60 days after receiving information and documentation reasonably necessary to determine compensability and to issue payment.

II.                   Court Approval of Attorney’s Fees

Under current law, the reasonableness of employee’s attorney’s fees is subject to approval of the workers’ compensation judge. However, the current statute also removes the judge’s discretion to reject an attorneys’ fee if the fee does not exceed 20% of the award to the employee. This was confirmed by the Workers’ Compensation Appeals Board and Special Workers’ Compensation Appeals Panel in Henderson v. Pee Dee Country Enterprises. Public Chapter 145 is clearly a response to the Henderson ruling, since it removes the requirement that the workers’ compensation judge must approve an employee’s attorney fee as long as it does not exceed 20% of the award. This effectively restores the judge’s discretion to approve or reject an attorney’s fee, even if the fee is less than 20% of the employee’s award.

III.                 Attorney’s Fees for Failure to Provide Workers’ Compensation Benefits

Under current law, a workers’ compensation judge has the authority to award reasonable attorney’s fees and reasonable costs when the employer “wrongfully” denies a claim, or “wrongfully” fails to timely provide medical benefits, temporary or partial disability benefits, or death benefits, if the judge makes a finding that the benefits were owed at an expedited hearing or compensation hearing. Public Chapter 145 retains this provision but changes the applicable standard from “wrongfully” to “unreasonably.” Also, the applicability of this authority is extended to dates of injury through June 30, 2025.

IV.                Admissibility of C-32 Medical Reports 

Current Law requires that C-32 medical reports must bear the doctor’s original signature to be admissible. A reproduced report is not admissible unless accompanied by an originally signed affidavit from the doctor verifying its contents. Public Chapter 145 will relax that standard by allowing the report to bear either an original signature or electronic signature of the doctor. It will also allow a reproduced copy to the same extent as the original report unless a genuine question is raised as to its authenticity.

V.                  Written Mediated Settlement Agreement 

Under current law, if the parties reach a full and final settlement through mediation, then the mediator must reduce the settlement to writing. Public Chapter 145 will allow either the mediator, or one party’s legal representative to draft a written settlement agreement.

VI.                Death Benefits Payable from the Uninsured Employers Fund 

Current law provides that the Uninsured Employers Fund may be used to pay temporary disability benefits and medical benefits to any eligible employee who suffered a compensable injury while working for an employer who failed to properly secure workers’ compensation insurance coverage. Public Chapter 145 will expand the scope of that fund to also allow the payment of death benefits, when applicable, and the maximum cap is raised from $40,000.00 to $60,000.00.

VII.               Certified Physician Program 

Public Chapter 145 authorized the creation of a voluntary physician education program that provides an additional reimbursement under the medical fee schedule for Bureau-certified physicians. The two main goals of the program are increasing access for injured workers to trained physicians and reducing the number of days that injured workers are out of work.

VIII.             Effective Dates 

The changes discussed above in section III, pertaining to Attorney’s Fees for Failure to Provide Workers’ Compensation Benefits, went into effect when Governor Lee signed the Public Chapter 145 on April 13, 2023.  All other changes will go into effect on July 1, 2023.

On April 17, 2023, Tennessee Governor Bill Lee Signed Public Chapter 158, which brought about changes impacting death benefits.

I.                     Remarriage of Surviving Spouse 

Under current law, upon the remarriage of a surviving spouse, if there is no child of the deceased employee, then periodic death benefits terminate. However, Public Chapter 158 provides that in this scenario, the periodic benefits will still terminate but the surviving spouse is entitled to a lump sum payment equal to 100 weeks based on 25% of the deceased employee’s average weekly wages.

 II.                Increased Percentage of Death Benefits 

Under current law, there are certain scenarios where the qualifying dependent is entitled to death benefits based on 50% of the deceased employee’s average weekly wages – such as where there is a surviving spouse with no dependent children, or a single dependent orphan.  Public Chapter 158 increases benefits in each of those scenarios to 66 2/3% of the deceased employee’s average weekly wage.

III.                 Educational Requirements for Continued Periodic Death Benefits to Orphans 

Generally, periodic death benefits to dependent orphans will terminate when the orphan reaches the age of 18. However, under current law, benefits can continue until age 22 if the child is attending a recognized educational institution. Public Chapter 158 clarifies that this includes completing secondary education or a program leading to an equivalent credential, or enrolled in a recognized institution that provides postsecondary career or technical education.

IV.                Certification of Continued Eligibility 

Public Chapter 158 creates a new right for employers/carriers who are paying periodic death benefits, in that they can now periodically require a dependent to provide information about whether the dependent continues to qualify for benefits. Benefits may be suspended if the dependent fails to provide the requested information within 15 days after receipt of the request.

V.                  Effective Date 

Public Chapter 158 takes effect July 1, 2023.

On May 17, 2023, Tennessee Governor Bill Lee Signed Public Chapter 465, which creates a statutory causation presumption for firefighters with PTSD.

I.                     Name of the Act 

This law is known as the James “Dustin” Samples Act.

II.                   Definition of “Firefighter”

For purposes of this act, “firefighter” means a regular or full-time, paid employee of the fire department of a municipality, county, municipal form of government, or other political subdivision of the state. It includes employees whose previous duties required the employee to respond to and be actively engaged in fire suppression, rescue services, or other emergency response tasks.

III.                 Presumption 

If a firefighter is diagnosed with post-traumatic stress disorder (PTSD) by a mental health professional because of one or more specified types of incidents, then the injury is presumed to have been incurred in the line of duty and is compensable under the workers’ compensation law, unless it is shown by a preponderance of the evidence that the PTSD was caused by non-service-connected factors. The types of incidents that may give rise to this presumption are: (a) directly witnessing the death of a minor, or treating the injury of a minor who subsequently died; (b) directly witnessing an individual whose death involved a serious bodily injury of a nature that shocks the conscience; (c) responding to an event where there was a victim with a serious bodily injury that shocks the conscience; or (d) responding to an event where a responder, co-worker of a responder, or family member of a responder sustained a serious bodily injury or died.

IV.                Date of Diagnosis 

This presumption applies to a firefighter who is diagnosed with PTSD within one year of the firefighter’s final date of employment with the fire department.

V.                  Exception for Disciplinary Action 

A mental condition resulting solely from disciplinary action, work evaluation, job transfer, layoff, demotion, termination, or similar action taken in good faith by the employer is not considered an injury sustained in the line of duty.

VI.                Grant Program 

Public Chapter 465 requires the Department of Labor and Workforce Development to establish and administer a grant program to mitigate the costs to an employer of providing workers’ compensation for firefighters diagnosed with PTSD. The Department may award an employer a grant if the employer provides mental health awareness training for its personnel.

VII.               Effective Date 

This act takes effect January 1, 2024.


For any questions, please contact:
Fredrick R. Baker, Member
Wimberly Lawson Wright Daves & Jones, PLLC
1420 Neal Street, Suite 201
P.O. Box 655
Cookeville, TN 38503-0655
Phone: 931-372-9123
Fax: 931-372-9181
fbaker@wimberlylawson.com
www.wimberlylawson.com

September 2022

Tennessee Appoints New Administrator and Workers’ Compensation Judge, Plus Other Recent Developments on the Firefighter Cancer Presumption and Mileage Reimbursement

New Administrator
Troy Haley, former Legislative Liaison of the Bureau, is now the new administrator for the Tennessee Bureau of Workers’ Compensation.  Troy succeeds Abbie Hudgens, who recently retired.

New Workers’ Compensation Judge in Memphis
Administrator Troy Haley has appointed Shaterra Reed Marion as a Judge on the Court of Workers’ Compensation Claims, the adjudicative function within the Tennessee Bureau of Workers’ Compensation (BWC). She will be located in the Memphis office of the BWC. Judge Marion has practiced law in Tennessee since 2012, primarily in workers’ compensation and insurance defense. She has been Field Counsel in Memphis for Liberty Mutual Insurance Company/Law Offices of Julie Bhattacharya Peak since 2014. She will replace the recently retired Judge Deana Seymour on the Court of Workers’ Compensation Claims in Memphis.

Firefighter Cancer Presumption
Effective July 1, 2022, Tennessee added leukemia and testicular cancer to the list of cancers (Non-Hodgkin’s Lymphoma cancer, colon cancer, skin cancer, and multiple myeloma cancer) for which a presumption is created that certain conditions or impairments of full-time firefighters arose out of employment, unless the contrary is shown by a preponderance of the evidence.

Mileage Reimbursement
Injured workers are entitled to request reimbursement for their travel expenses. Mileage reimbursement is a workers’ compensation benefit for injured workers who must travel outside a radius of 15 miles one way from their residence or workplace to an authorized medical provider or facility. The rate has been updated twice in 2022. For travel dates between January 2, 2022 to June 30, 2022, the reimbursement rate is $0.585 per mile.  For travel dates from July 1, 2022 to the present, the mileage reimbursement rate is $0.625.

For any questions, please contact:

Fredrick R. Baker, Member
Wimberly Lawson Wright Daves & Jones, PLLC
1420 Neal Street, Suite 201
P.O. Box 655
Cookeville, TN 38503-0655
Phone: 931-372-9123
Fax:  931-372-9181
fbaker@wimberlylawson.com
www.wimberlylawson.com    

March 2022

Tennessee Returns to In-Person Settlements

Since the establishment of the Tennessee Court of Workers’ Compensation Claims in 2014, the Court followed a strict rule that settlement approval hearings should be conducted in-person.  Telephone hearings were only permitted under extraordinary circumstances. Workers’ Compensation Judges have a duty to ensure that settlements provide injured workers with substantially the benefits to which they are entitled under Tennessee law, and to ensure that settlements are in the injured workers’ best interests. The Court has long believed that in-person settlement approval hearings were the best way to fulfill this duty, since it allowed Judges to see the workers, listen to them, and observe their non-verbal communication. 

Of course, that was until the COVID-19 pandemic. The pandemic forced the Court to quickly change direction and to start conducting settlement approval hearings by telephone. Though not as effective as in-person hearings, they were a necessity under the circumstances.

Fortunately, effective April 4, 2022, the Court will return to in-person settlement approvals. This will be the primary method for settlement approvals, just like before the pandemic.  Exceptions will be made only upon request and for good cause shown.

The Court has rolled out the procedure for scheduling in-person settlement approval hearings at each of the Court’s offices throughout the state of Tennessee.  For more detail, see the Court’s recent announcement via Blog:  https://wccourt.com/2022/03/15/returning-to-in-person-settlements-2/

For any questions, please contact:
Fredrick R. Baker, Member
Wimberly Lawson Wright Daves & Jones, PLLC
1420 Neal Street, Suite 201
P.O. Box 655
Cookeville, TN 38503-0655
Phone: 931-372-9123
Fax:  931-372-9181
fbaker@wimberlylawson.com
www.wimberlylawson.com

January 2022

New Mileage Reimbursement Rate for Tennessee Workers’ Compensation Claims

When an injured worker is required to travel to an authorized medical provider or facility located more than fifteen (15) miles from the injured worker's residence or workplace, then the employee may request reimbursement for their travel expenses.  Since 2011, the mileage reimbursement rate has been $0.47 per mile.  However, effective on January 2, 2022, that rate increased from $0.47 per mile to $0.585 per mile.

For any questions, please contact:

Fredrick R. Baker, Member
Wimberly Lawson Wright Daves & Jones, PLLC
1420 Neal Street, Suite 201
P.O. Box 655
Cookeville, TN 38503-0655
Phone: 931-372-9123
Fax:  931-372-9181
fbaker@wimberlylawson.com  
www.wimberlylawson.com

Effective October 19, 2021, the Tennessee Bureau of Workers’ Compensation adopted new regulations addressing the use of telehealth in the context of workers’ compensation claims. The purpose of the rules is to provide Tennessee workers’ compensation claimants with an option to utilize telehealth while treating for their injuries.

Under the regulations, telehealth may only be provided with the voluntary consent and agreement of the injured worker and the willingness of the healthcare provider. However, telehealth is not permitted for conditions which require an in-person physical examination. The regulations provide several examples of such conditions, including chest pain, significant burns, deformity of an extremity or suspicion of a fracture, and any bleeding that has not already stopped by direct pressure. However, this list is not exhaustive.

The treatment provided via telehealth is subject to utilization review and must follow all Tennessee standards of medical practice. The use of telehealth does not change any of the requirements for causation, date of maximum medical improvement, or permanent impairment ratings.

Employers are still subject to the same requirement to provide a medical panel to injured workers, and the panel must still include at least three medical providers who are qualified, willing, and able to timely treat the worker’s injury in person, but the panel doctors may also provide their services via telehealth with the employee’s consent. Before receiving medical benefits in the form of telehealth, the injured worker must be given an opportunity to receive in-person treatment. An injured worker may refuse a telehealth encounter at the time of the panel choice without affecting future care to which the injured worker is entitled.

The newly revised C-42 Medical Panel form also includes a space for an optional fourth choice of physician, which is a telehealth-only provider. However, this does not alleviate the employer’s obligation to still list three medical providers who can see the employee in person.

At any point during the initial visit or follow-up medical visits, the injured worker may refuse telehealth and request in-person care. If the authorized treating physician who is chosen from the medical panel declines to see the injured worker in person, the worker must select a new authorized treating physician from the names remaining on the original panel. The subsequent choice will become the new authorized treating physician.

The Tennessee Medical Fee Schedule applies to providers of telehealth services, and coding and billing regulations must follow the Medicare guidelines in effect for the date of service with no geographic qualifier.

These new regulations will have several practical effects on the way that employers, carriers, and third-party administrators handle their Tennessee claims, including:

-          Medical panels must now be provided on the newly revised medical panel form C-42, which may be found at https://www.tn.gov/content/dam/tn/workforce/documents/Forms/c42.pdf.

-       Regardless of these new telehealth rules, the medical panel still must include three or more doctors, surgeons, chiropractors, or specialty practice groups who are located in the employee’s community, and who are able to treat the employee in person.

-        When completing the medical panel form C-42 with the three medical providers who can see the injured worker in person, the medical panel form also requires that the employer indicate whether those providers also have a telehealth option, and if so, document that on the panel.

-       In addition to the three “in-person” medical providers, employers now have the option of including a fourth option, which is a telehealth-only option.  However, note that there are several types of medical conditions that cannot be treated by telehealth, and that the injured worker always retains the right to refuse the telehealth option.

For any questions, please contact:

Fredrick R. Baker, Member

Wimberly Lawson Wright Daves & Jones, PLLC
1420 Neal Street, Suite 201
P.O. Box 655
Cookeville, TN 38503-0655
Phone: 931-372-9123
Fax:  931-372-9181
fbaker@wimberlylawson.com
www.wimberlylawson.com

October 2021

Tennessee Enacts New Telehealth Regulations and New Medical Panel Form

Effective October 19, 2021, the Tennessee Bureau of Workers’ Compensation adopted new regulations addressing the use of telehealth in the context of workers’ compensation claims. The purpose of the rules is to provide Tennessee workers’ compensation claimants with an option to utilize telehealth while treating for their injuries.

Under the regulations, telehealth may only be provided with the voluntary consent and agreement of the injured worker and the willingness of the healthcare provider. However, telehealth is not permitted for conditions which require an in-person physical examination. The regulations provide several examples of such conditions, including chest pain, significant burns, deformity of an extremity or suspicion of a fracture, and any bleeding that has not already stopped by direct pressure. However, this list is not exhaustive.

The treatment provided via telehealth is subject to utilization review and must follow all Tennessee standards of medical practice. The use of telehealth does not change any of the requirements for causation, date of maximum medical improvement, or permanent impairment ratings.

Employers are still subject to the same requirement to provide a medical panel to injured workers, and the panel must still include at least three medical providers who are qualified, willing, and able to timely treat the worker’s injury in person, but the panel doctors may also provide their services via telehealth with the employee’s consent. Before receiving medical benefits in the form of telehealth, the injured worker must be given an opportunity to receive in-person treatment. An injured worker may refuse a telehealth encounter at the time of the panel choice without affecting future care to which the injured worker is entitled. 

The newly revised C-42 Medical Panel form also includes a space for an optional fourth choice of physician, which is a telehealth-only provider. However, this does not alleviate the employer’s obligation to still list three medical providers who can see the employee in person.

At any point during the initial visit or follow-up medical visits, the injured worker may refuse telehealth and request in-person care. If the authorized treating physician who is chosen from the medical panel declines to see the injured worker in person, the worker must select a new authorized treating physician from the names remaining on the original panel. The subsequent choice will become the new authorized treating physician.

The Tennessee Medical Fee Schedule applies to providers of telehealth services, and coding and billing regulations must follow the Medicare guidelines in effect for the date of service with no geographic qualifier.

These new regulations will have several practical effects on the way that employers, carriers, and third-party administrators handle their Tennessee claims, including:

- Medical panels must now be provided on the newly revised medical panel form C-42, which may be found at https://www.tn.gov/content/dam/tn/workforce/documents/Forms/c42.pdf. 

- Regardless of these new telehealth rules, the medical panel still must include three or more doctors, surgeons, chiropractors, or specialty practice groups who are located in the employee’s community, and who are able to treat the employee in person. 

- When completing the medical panel form C-42 with the three medical providers who can see the injured worker in person, the medical panel form also requires that the employer indicate whether those providers also have a telehealth option, and if so, document that on the panel.

- In addition to the three “in-person” medical providers, employers now have the option of including a fourth option, which is a telehealth-only option.  However, note that there are several types of medical conditions that cannot be treated by telehealth, and that the injured worker always retains the right to refuse the telehealth option.

April 2021

Tennessee Enacts Limited COVID-19 Presumption for Emergency Rescue Workers

Effective April 13, 2021, Tennessee enacted a limited presumption for emergency rescue workers, which provides that an emergency rescue worker who suffers a condition or impairment that is caused by an infectious disease is presumed to have a disability suffered in the line of duty, unless the contrary is shown by a preponderance of the evidence. However, there are several conditions for this presumption to apply:

1.       The “infectious disease” must be either the human immunodeficiency virus, the Hepatitis C virus, or one that has been recognized as a pandemic by the World Health Organization (WHO) or U.S. Centers for Disease Control and Prevention (CDC), and for which the Tennessee governor has declared a state of emergency.

2.       For purposes of this presumption, the term “emergency rescue worker” is defined as a person employed full-time by the state or any political subdivision of the state, as a firefighter, paramedic, emergency medical technician or emergency medical technician advanced. This does not include any person employed by a public hospital or by a subsidiary of a public hospital.

3.       The emergency rescue worker must verify by written declaration that the worker has not engaged in certain types of high-risk activities, such as blood transfusions, unsafe sexual practices, intravenous drug use, or non-work exposure through bodily fluids to a person known to have an infectious disease.

4.       The emergency rescue worker must, prior to diagnosis, have tested negative on medically accepted tests for the infectious disease for which the presumption is sought.

5.       For emergency rescue workers hired on or after July 1, 2015, the worker may be required to undergo a preemployment physical examination which includes a negative test for any evidence of infectious disease.

6.       The emergency rescue worker may be required to take a medically recognized vaccine or other form of immunization, unless the worker’s physician determines in writing that it would pose a significant risk to the worker’s health.

7.       The emergency rescue worker must file with the employer an incident or accident report of each instance of known or suspected occupational exposure for infectious disease within 7 days of the incident or accident occurring.

8.       The presumption shall apply to any emergency rescue worker following termination of service for a period of 1 year from the last date of service.

For any questions, please contact:

Fredrick R. Baker, Member
Wimberly Lawson Wright Daves & Jones, PLLC
1420 Neal Street, Suite 201
P.O. Box 655
Cookeville, TN 38503-0655
Phone: 931-372-9123
Fax: 931-372-9181
fbaker@wimberlylawson.com
www.wimberlylawson.com

November 2020

New Denial Form for Tennessee Workers’ Compensation Claims

Under prior regulations, Tennessee maintained two different forms for the denial of claims:

-  The C-23 Notice of Denial form was used when a claim was denied from the outset of the claim, with no benefits having been paid; and 

- The C-27 Notice of Controversy form was used when a claim was denied during the pendency of the claim, after some benefits had been paid.  

However, the C-27 Notice of Controversy form has now been eliminated. For all denials going forward, the adjusting entity should file the revised C-23 Notice of Denial form. This revised form will encompass denials for any claim, regardless of whether benefits have been paid. Likewise, this revised form will encompass partial denials, where only a particular aspect of the claim is being denied.

For any questions, or for a copy of the revised C-23 form, please contact:

Fredrick R. Baker, Member
Wimberly Lawson Wright Daves & Jones, PLLC
1420 Neal Street, Suite 201
P.O. Box 655
Cookeville, TN 38503-0655
Phone: 931-372-9123
Fax:  931-372-9181
fbaker@wimberlylawson.com
www.wimberlylawson.com

JULY 2020

2020 TENNESSEE WORKERS’ COMPENSATION LEGISLATIVE UPDATE

The Tennessee General Assembly passed two workers’ compensation bills in 2020.  Both implement important statutory changes.  For the most part, these changes tend to favor the injured worker.

I.    Tennessee Public Chapter 731 (Senate Bill 2190)

The more significant of the two workers’ compensation bills for 2020 was Senate Bill 2190.  This bill was signed by Governor Bill Lee on June 22, 2020.

A.    Period of Compensation for Permanent Partial Disability

Permanent partial disability (PPD) under the current workers’ compensation law is typically addressed at two separate points in the claim.  The original award of PPD is calculated simply by multiplying the impairment rating by 450 weeks, and then multiplying the result by the employee’s compensation rate. The result is a sum of money to which the employee is entitled regardless of his or her work status. However, the original award of PPD also creates a period of compensation, which is the amount of time represented by the original award.  For instance, if the employee has an impairment rating of two percent (2%) to the body as a whole, then the period of compensation is nine (9) weeks – because two percent (2%) of 450 weeks is nine (9) weeks.

The period of compensation will begin on the date of maximum medical improvement and will expire at a specified date in the future depending on the number of weeks involved.  On that date, the employee’s work status is examined, and if the employee is not back at work at the same or greater wages for any employer, then the employee may be entitled to additional PPD based on the application of certain enhancement factors for work status, age, education, and unemployment rate.  This additional PPD is referred to as the “resulting award” of PPD.

That two-part system looks fine on paper, but in practice, the system breaks down a bit when the employee has a small impairment rating.  For instance, if the employee has an impairment rating of one percent (1%), then the period of compensation is only four and a half (4½) weeks.  In many cases, that period will have come and gone before the impairment rating is even known, let alone allowing enough time to settle the original award and then subsequently examine the employee’s entitlement to a resulting award of PPD.

In Senate Bill 2190, the General Assembly has addressed this issue by adding an additional amount of time after which the employee’s entitlement to a resulting award of PPD will be determined.  That is, under the new law, the employee’s entitlement to a resulting award of PPD will be determined as of the date the period of compensation expires,or 180 days after the employee reaches maximum medical improvement, whichever is later.  The effect of this change will be to allow greater opportunity for employees with smaller impairment ratings to seek additional PPD if they do not return to work within 180 days of reaching maximum medical improvement.

Likewise, under prior law, the employee had one (1) year after the period of compensation expired to file a Petition for Benefit for Determination seeking additional PPD benefits.  That time period has also been modified to allow the filing within one (1) year after the period of compensation expires,or within one (1) year after the 180 day period after the employee reaches maximum medical improvement, whichever is later.

B.    Uninsured Employers Fund

The Uninsured Employers Fund (UEF) was created to help provide some compensation benefits to employees who suffered work injuries while working for employers who did not have workers’ compensation insurance.  To be eligible to receive compensation from the UEF under the statute and prior law, an employee had to satisfy five criteria.  First, the employee had to be employed by an employer who failed to properly secure workers’ compensation insurance coverage.  Second, the employee suffered an injury that would be considered compensable under the workers’ compensation law, at the time the employer had no worker’s compensation insurance coverage.  Third, the employee was a Tennessee resident on the date of injury. Fourth, the employee provided notice within sixty (60) days after the date of injury to the Tennessee Bureau of Workers’ Compensation of the injury and of the employer’s failure to secure insurance coverage.  Finally, the employee must have secured a judgment for workers’ compensation benefits against the employer for the injury.
 
Senate Bill 2190 left this system mostly intact, but slightly modified the fourth element of employee eligibility to make it easier for an employee to seek benefits from the UEF.  Specifically, the sixty (60) day notice requirement was extended to 180 days.
Senate Bill 2190 also removed a statutory requirement that the Court of Workers’ Compensation Claims must convene a full and final hearing no more than sixty (60) days after the notice of hearing has been filed.  This requirement was deemed to be unrealistic, and it was therefore deleted from the statute.

C.    Effective Date

The statutory changes discussed above under Senate Bill 2190 are effective for injuries on or after June 22, 2020.

II.    Tennessee Public Chapter 682 (Senate Bill 2189)

Senate Bill 2189 is a relatively narrow bill targeted at a very specific issue: jurisdiction and enforcement over out-of-state construction companies.

Under prior law, extra-territorial jurisdiction over out-of-state construction services providers was analyzed using the same statutory standard that would apply to any other employer.  However, under Senate Bill 2189, a new scheme now applies for out-of-state construction companies.

Under the new law, any construction services provider performing work in the state of Tennessee must maintain workers’ compensation insurance coverage throughout the duration of that work and must designate “Tennessee” in section 3A of the construction services provider’s workers’ compensation insurance policy or endorsement.

To help enforce this requirement, Senate Bill 2189 also added a new statutory mechanism to collect penalties issued against violators of the workers’ compensation insurance coverage requirements, who try to avoid the penalties by closing the business down and opening a similar business under a new name. That will no longer work, because the Bureau can now seek to enforce penalties against a successor in interest. 

Senate Bill 2189 was signed by Governor Lee on June 15, 2020, and it is effective as to penalties assessed on or after that date.

Fredrick R. Baker, Member
Wimberly Lawson Wright Daves & Jones, PLLC
1420 Neal Street, Suite 201
P.O. Box 655
Cookeville, TN 38503-0655
Phone: 931-372-9123
Fax:  931-372-9181
fbaker@wimberlylawson.com
www.wimberlylawson.com