Proposed Changes to the Alabama Workers’ Compensation Act

Proposed Changes to the Alabama Workers’ Compensation Act

Recently the Alabama Worker’s Compensation Task Force finalized its proposed changes to the Alabama Workers’ Compensation Act.  This Task Force was commissioned by the Alabama State Bar in response to increasing criticism the Act has generated over the past several years due, in large part, to the $220 per week permanent partial disability cap lamented by the plaintiff’s bar.  The following are highlights on some of the significant proposed changes to the Act.


Probably the biggest source of sticker shock under the Task Force proposal is that there would no longer be a $220 per week cap applied to permanent partial disability awards.  Under the proposal, the PPD cap would be a fluid and annually-changing fifty-percent (50%) of the Alabama State average weekly wage.  For example, Alabama’s average weekly wage as of July 1, 2018 was determined to be $865.16, and fifty-percent (50%) of that figure totals $432.58.  Accordingly, whereas an individual with a $650.00 average weekly wage and a 50% permanent partial impairment rating to his or her lower extremity would potentially be entitled to $22,000.00 (200 weeks x .50 x $220 cap) under the existing version of the Act, this person under the Task Force proposal would potentially be entitled to $43,248.00 (200 weeks x .50 x $432.58 cap), nearly doubling that employee’s potential recovery.


In exchange for this cap increase, the Task Force proposal contemplates ending employers’ liability for lifetime future medical benefits by capping the employer’s medical liability at 300 weeks, with exceptions.  Under this proposal, an employee would have the right to file a petition — within 300 weeks from the date of injury — to extend his or her authorized medical treatment beyond 300 weeks if he or she can establish by clear and convincing evidence that additional medical treatment is necessary and related.  However, if, within this 300-week (5.77 years) timeframe (or any timeframe for that matter), there is a three (3) year gap in between when an employee has received authorized medical treatment and a subsequent attempt to seek additional treatment, there would be a rebuttable presumption that the additional treatment is unrelated to the original work injury.  Furthermore, if an employee does not seek authorized medical treatment within a five (5) year window from his or her last authorized visit, this presumption that additional medical treatment is not related to the original injury would become conclusive.  An exception built into the “lose it” provisions of the 300-week time cap would be triggered if hardware removal is required as a result of authorized medical treatment.


Another trade-off contemplated by the Task Force that potentially benefits employers and insurance providers is a proposed cap on permanent total disability benefits.  Under this proposal, permanent total disability benefits would be terminated by the latter of the employee reaching the age of 70, the employee reaching Social Security retirement age plus two years, or 500 weeks.  Considering the Commissioners 2017 Standard Ordinary Mortality Table now acknowledging an increased life-expectancy among Alabama’s population, this could translate into significant savings for employers in the event of an adverse permanent total disability award at trial.  For example, the full value of a permanent total disability judgment for a 40-year-old female employee with an average weekly wage of $1,000.00 would total approximately $1,482,074.10 (using the 2017 table’s 42.75-year or 2,223-week life expectancy) under the current version of the Act.  However, this same employee’s full-value PTD award would total approximately $1,040,052.00 (using 30 years or 1,560 weeks until the employee turns 70) under the proposed version of the Act, potentially saving an employer nearly a half-million dollars in indemnity exposure over the life of the claim.


Other notable changes proposed by the Task Force include a specific provision enabling the employer to determine which pharmacies an employee may use, overruling previous case law permitting the employee-election of pharmacies.  Likewise, authorized physicians treating worker’s compensation claimants would no longer be able to dispense pharmaceuticals to those claimants out of their own offices.  Part of this proposal also includes increasing the 15% max attorney’s fee award to 20%.  Furthermore, the Task Force included a provision recognizing that a proposed settlement is, in fact, in the best interest of the claimant when the claimant is represented by counsel. This will hopefully have an impact on trial judges who were previously reluctant to approve settlements – especially when closing future medical benefits — and reduce the number of trips to court in order to obtain settlement approval.

By | 2018-11-29T13:13:20+00:00 November 29th, 2018|Uncategorized|0 Comments

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