2017 Legislative Changes to Iowa Workers’ Compensation Law

In 2017 the Iowa Legislature made extensive changes to the Iowa Work Comp system. The changes make it more difficult for injured workers to obtain benefits and lower the amount of benefits that injured workers can receive.

In this section I am going to review the major changes contained in the 2017 amendments. The changes apply to injuries that occur after July 1, 2017. The old law applies to all injuries that occur prior to July 1, 2017. I am writing this article in early May of 2017. Therefore, there have not been any Iowa Workers’ Compensation decisions or Iowa Court cases interpreting these 2017 changes. It is certainly possible that the changes will be interpreted differently than how I foresee. However, I wanted to give everyone an early view of the differences between the old law and the new law.

1. Industrial Disability and Loss of Earning Capacity. Under traditional Iowa workers’ compensation law unscheduled injuries such as back injuries, neck injuries, head injuries, hip injuries, psychological injuries and chronic pain syndrome were valued based on their negative effect on a worker’s potential loss of earning capacity. Assessing the loss of earning capacity required looking at:

  1. Age of the worker.
  2. Education of the worker.
  3. Job qualifications and job experience.
  4. Motivation.
  5. Loss of actual earnings.
  6. Functional impairment from the injury.
  7. Work restrictions.
  8. Inability to engage in employment for which the worker is suited.
  9. Whether the employer continues to provide the worker a job.

The 2017 amendments to the Iowa Work Comp law changed the analysis relating to two of these elements. The first change relates to the age of the injured worker. Traditionally, an older worker would receive a higher award than a younger worker for the same injury. The thinking behind the rule is that most employers generally preferred younger workers, and an older worker with an injury was put at even more of a disadvantage in getting a job. The 2017 amendment changed this law, and now the analysis of the employee’s loss of earning capacity will take into account the number of years in the future it was reasonably anticipated that the employee would work at the time of the injury.

The second element that was changed by the 2017 Amendments was the factor of whether or not the injured worker’s actual earnings went up or down. Traditionally, under Iowa law an injured worker could still receive industrial disability benefits even if their actual earnings went up. The legislature changed this rule so that if an employee returns to work or is offered work for which the employee received or would receive the same or higher earnings, then the employee is only entitled to be compensated based upon the employee’s functional impairment rating from the injury. This change will generally reduce the amount of benefits that workers with unscheduled injuries will receive.

The 2017 amendment does provide that if a worker receives an award or settlement that is based on just the functional impairment rating, and the employee is later terminated by the employer, the injured worker can bring a reopening procedure to have his injury reassessed and compensated based on the loss of earning capacity analysis.

2. Shoulder Injuries. Workers who have suffered a shoulder injury in Iowa have traditionally had the shoulder injury treated as an unscheduled or industrial disability injury. As discussed above, the measure of damages for unscheduled or industrial disability injuries is based on how much the injury has impaired the worker’s potential earning capacity. The 2017 Iowa Legislature amended Iowa Code Section 85.34 to convert shoulder injuries from unscheduled to scheduled injuries. Therefore, the measure of damages will be based on how much of a functional impairment the worker has suffered to their shoulder. Once the functional impairment has been determined a worker is entitled to receive that percent of impairment applied to a maximum of 400 weeks of permanent partial disability benefits. For example, if the worker suffers a 10% impairment to his shoulder, he will now be entitled to receive 40 weeks of PPD benefits.

The effect of this change will be to substantially reduce the amount of compensation a worker can receive for a shoulder injury.

3. Preexisting Disability. Over the last several years the issue of preexisting disability has been a source of frequent disputes and litigation. Statutory amendments from several years ago attempted to deny compensation for a preexisting disability that was from outside a worker’s employment, or was incurred with a different employer, or had already been compensated by the current employer. The 2017 amendments attempt to further limit benefits to injured workers who have a preexisting disability.

4. Notice of Injury and Statute of Limitations. Under the traditional Iowa work comp law an employee was required to give notice of his injury within 90 days. The employee was also required to file a Petition within two years of the date of injury if no weekly benefits were paid; or file a Petition within three years of the last payment of weekly benefits in cases where weekly benefits had been paid. If a worker does not comply with these time limits he can lose his right to recover any work comp benefits.

In some situations it is very clear when a worker has been injured such as if he is run over by a fork lift. However, in many situations, such as cumulative trauma, the actual date of injury is not clear. Iowa law has traditionally provided that the notice limits and statute of limitations do not begin to run until the worker knows that:

  1. He or she suffers from a condition or injury.
  2. This condition or injury was caused by the claimant’s employment.
  3. The condition or injury is serious.

The 2017 amendments change Iowa Code Sections 85.23 and 85.26 to eliminate the requirement that the employee recognize that the injury was serious.

This change to the statute makes it more important than ever for injured workers to provide notice of any injury to their employer as soon as possible, and to contact a lawyer to file a Petition in a timely manner.

5. Commutations. Traditionally, injured workers have frequently been able to convert an award for future weekly payments into the payment of a single lump sum equaling the present value of the future weeks to be paid. Generally, as long as the injured worker could show they were financially responsible it did not matter if the employer and insurance company objected to the conversion to a lump sum payment.

The 2017 work comp amendments by the Iowa legislature now provide that a worker can only receive a commutation if the employer and insurance company agree.

6. Interest on Unpaid Benefits. Traditionally, Iowa Workers’ Compensation law has provided that workers are entitled to 10% annual interest on unpaid benefits.

The 2017 amendments change this rule so that the interest rate will now be based on the annual rate for one year treasury constant maturity notes plus 2%. By way of example, I am writing this section in early May of 2017 and the current one-year treasury constant maturity index is 1.08%. Therefore, the current work comp interest rate under the new rule would be 3.08%.

7. Start Date for Permanent Partial Disability Payments. Traditionally, Iowa work comp law has provided that as soon as healing period benefits to a worker end, then the employer has to begin paying PPD benefits based on the employer’s estimate of the minimum amount of permanent partial disability that will ultimately be awarded.

The 2017 Iowa Legislature amended Iowa Code Section 85.34 to provide that permanent partial disability benefits do not have to be paid until an injured worker has reached maximum medical improvement and the extent of the worker’s impairment can be determined.

8. Light Duty Work . Traditionally, when an employee has been injured and cannot do his regular work, the employer has the option of either paying the worker healing period benefits while the worker is off the job, or providing the employee suitable light duty work. A frequent area of dispute over the last several years in the trucking industry, and other jobs involving a lot of travel, is how far the employer can require a worker to travel for light duty work.

As part of the 2017 changes the legislature has amended Iowa Code Section 85.33 to provide that if a worker’s job required them to travel more than 50% of the time, then a light duty offer of work at the employer’s principal place of business or an established place of operation where the employee has previously worked is presumed to be geographically suitable.

9. Medical Examinations of Injured Workers. Traditionally employers have had the right to require injured workers to submit for an examination by a physician at some reasonable time and place and as often as reasonably requested. Disputes can arise over these types of exams for many reasons, and if an employee refused to submit to such an exam the employee’s right to receive weekly benefits was suspended. However, once the worker attended the exam or the dispute was resolved, the worker was entitled to receive the back benefits that had been suspended.

The 2017 legislature modified this provision of the law so that now an employee forfeits their right to receive weekly benefits if they refuse to attend a medical exam set up by the defense.

The 2017 amendments also create more situations where the employer does not have to reimburse the injured worker for obtaining an independent medical exam with a doctor of his own choosing.

10. Scheduled Injuries. Scheduled injuries involve injuries to the arms, hands, fingers, legs, feet, toes, eyes and hearing. Traditionally the most important factor in evaluating the extent of injury to a scheduled body part has been an impairment rating pursuant to the AMA Guides to the Evaluation of Permanent Impairment. However, Iowa law has also allowed awards above the impairment ratings based on testimony of non-experts such as the injured worker and his family.

The 2017 amendments state that the extent of disabilities for all future scheduled injuries shall be based solely on impairment ratings according to the AMA Guides.

11. Permanent Total Disability. Traditionally, in some very limited situations a worker could receive both permanent partial disability benefits and permanent total disability benefits at the same time. The 2017 amendments changed this rule and provide that an injured worker can only receive one of these types of benefits.

A second change provides that an injured worker cannot receive permanent total disability and unemployment compensation at the same time.

Finally, the amendments provide that an injured worker forfeits their entitlement to permanent total disability for any week in which the worker receives a payment equal to or greater than 50% of the statewide average weekly wage from either:

  1. Gross earnings from any employer; or
  2. Payment for current services from any source.

12. Jurisdiction for Injuries Outside the State of Iowa. Iowa Workers’ Compensation law provides that workers who are injured outside of the State of Iowa are still entitled to Iowa workers’ compensation benefits as long as they fall within one of several situations. The 2017 amendments repeals jurisdiction for the situation where an employer has a place of business in this state, and the worker lives in Iowa, but does not work out of the employer’s Iowa place of business.

13. Credits for Excess Payments by the Employer. Traditionally, Iowa law has made it very difficult for employers to get a credit for any excess payments they accidentally made. The 2017 legislation changes those rules. If an employer makes an overpayment, it is much simpler for the employer to get a credit for that overpayment to apply either to the current injury to the employee or a future injury to the employee.

14. Intoxication. The current Iowa Work Comp law is that an employee is not entitled to workers’ compensation benefits if he was intoxicated at the time of his injury and his intoxication was a substantial factor in causing the injury. Intoxication has traditionally been an affirmative defense of the employer. This means the employer had the burden of proof to show that the intoxication was a substantial factor in causing the injury.

The 2017 legislature amended Iowa Code Section 85.16 to create a presumption that if an employee was intoxicated at the time of injury that the intoxication was a substantial factor in causing the injury. The amendment also places the burden of proof on the injured worker to overcome the presumption that intoxication was a substantial factor in causing the injury.

Conclusion

Unfortunately, the 2017 legislative changes are definitely a negative development for injured workers. The changes make it even more critical that Iowans who are hurt on the job obtain high quality legal assistance with their cases. If you have any questions about the changes in Iowa law, or Iowa workers’ compensation in general, call or email us now and our lawyers would be happy to answer your questions without charge or obligation.