Legislation

A3945 was signed into law on July 1, 2020 by New Jersey Governor Phil Murphy.  The law provides for both an accidental disability pension for an eligible member who becomes totally disabled from COVID-19 as well as a death benefit for eligible beneficiaries if the covered member should die from COVID-19.  

This new pension law applies to certain members of three pension systems:  PERS (Public Employees’ Retirement System), PFRS (Police and Firefighters’ Retirement System), and SPRS (State Police Retirement System).  Those covered by the new pension law are solely law enforcement officers, state troopers, firefighters and emergency medical responders who are enrolled in one of the three pensions systems.

COVID-19 claims are normally considered occupational exposure claims for workers’ compensation purposes, but for pension purposes A3945 transmutes such claims into traumatic events for those pension applicants covered under this law.  This is crucial because an accidental disability pension is only available for traumatic work-related events.  Under current law members of PFRS and SPRS who are eligible for accidental disability retirement benefits receive a pension of 66% of their final compensation.  In addition, an amount that is equal to three and a half times their final compensation is paid to the member’s beneficiary on death.   In the case of accidental death, eligible spouses or partners of PFRS and SPRS members receive an annual pension equal to 70% of the member’s final compensation and an amount that is equal to three and a half times the compensation paid in the last year of service.  Eligible widows or widowers of PERS members are paid an annual pension of 50% of the compensation paid in the last year of service.

Below are the only conditions that must be met for the COVID-19 accidental disability pension and death benefits:

Accidental Disability Pension:

1. The law enforcement officer, firefighter, or emergency medical responder must sustain a total and permanent disability from an on-the-job COVID-19 illness.  Such an illness will be considered “traumatic” for purposes of his or her pension application.
2. The applicant must begin showing symptoms within 14 days of interacting with the public or supervising other personnel who interacted with the public as part of their job.
3. There must be proof of a positive COVID-19 test.
4. The exposure must occur beginning March 9, 2020 and prior to the termination date of either the public health emergency or state of emergency, whichever occurs later.

Death Benefit:

1. The eligible widow or widower must prove that the deceased law enforcement officer, firefighter, or emergency medical responder contracted COVID-19 during the period of the public health emergency beginning March 9, 2020.
2. The decedent must have died as a result of the disease.
3. The decedent must have begun to show symptoms within 14 days of interacting with the public or supervising other personnel who interacted with the public as part of their job.

An unusual provision of this COVID-19 pension law is that the covered pension applicant does not have to offer any proof at all that “more likely than not” he or she contracted the disease in the line of duty.  That is the requirement for all other accidental disability pension applications.  This law is much stronger than so-called rebuttable presumption laws being passed around the United States. This is an absolute presumption law.   Evidence presented by the public entity that the member developed the disease at home or outside work is not relevant.  There are only two relevant issues: first, did the pension applicant develop COVID-19 symptoms within 14 days of interacting with the public or supervising other personnel who interacted with the public as part of their job? If the answer is yes, that satisfies the on-the-job criterion.  Second, does the Division of Pensions and Benefits agree with the applicant’s medical report stating that the member is totally disabled from COVID-19?

The law provides that new onset diseases or chronic psychological disease that may appear later in possible connection to prior COVID-19 exposure and subsequent recovery will not be considered a permanent and total disability caused by the virus.  However, the law does apply to complications from COVID-19 or aggravation or acceleration of a preexisting condition.  The distinction is between “new onset diseases” (meaning a disease that the individual never had been diagnosed with before) as opposed to medical conditions that were already diagnosed prior to the COVID-19 exposure but were aggravated by the virus.

The new law applies to any law enforcement officer, firefighter, and emergency medical responder who was performing regular or assigned duties but not yet enrolled in either PFRS, PERS or SPRS who would otherwise be eligible for benefits from this Bill. 

The law will not apply to any member who has already retired and subsequently returned to employment pursuant to the Executive Order without reemployment to assist during the public health emergency.

The post Governor Signs COVID-19 Accidental Disability Pension Law appeared first on NJ Workers' Comp Blog.

Proposed Senate Bill 2380 sponsored by New Jersey Senate President Stephen Sweeney seeks to create a new legal presumption of compensability for “essential employees,” including public safety workers and virtually all health care workers who file COVID-19 workers’ compensation claims.  This proposed presumption would require the Judge of Compensation to presume that any COVID-19 claim for public safety and health care workers must be found to be work related unless the employer could rebut the claim by “clear and convincing evidence.” There exists no presumption in the New Jersey Workers’ Compensation Act that requires an employer in any circumstance to rebut a claim by clear and convincing evidence.  There is a very good reason for that: the standard would be impossible to meet for employers, and it would in effect make employers strictly liable for all COVID-19 cases, whether the claims are causally related or not.

There are both legal and practical reasons that enhanced legal
presumptions do not make sense in the context of this pandemic.  Consider the legal issue first. For an
occupational disease to be compensable it must be proven to arise out of the
employment and be produced by causes which are characteristic of or peculiar to
work under N.J.S.A. 34:15-31.  But the
COVID-19 virus is ubiquitous. It spreads wherever people congregate:  including churches, grocery stores, post
offices, and crowded beaches.  Millions
of people have the virus and don’t know it. 
COVID-19 claims are not like traditional occupational disease claims
such as black lung among coal miners or Legionnaire’s Disease among workers in
an infected building who breathe in the bacteria. These kinds of occupational disease
claims clearly meet the test of being peculiar to a particular work
environment.

COVID-19 illnesses arise when the virus spreads in any close
human contact, whether it is through work or outside work.  We all understand how easily the virus can be
spread in any life circumstance.  A New
Jersey family had a gathering in late February that led to the tragic death of
four family members from the coronavirus. Other family members also got
sick.  Sixty choir members in the State of
Washington met to practice on March 6, 2020. 
They sanitized and kept their distance from one another.  Within days 45 of 60 choir members became ill
because the virus was spread through the air when they sang. 

Hospitals, health care providers and public sector employers,
their carriers and excess carriers, are now inundated with COVID-19 claims.  This is putting enormous financial strain on
public sector and hospital budgets at a time when Americans have expressed profound
concern about rising health care costs, high taxes, and unfunded pension
plans.  These claims are now beginning to
work their way into the workers’ compensation systems of each state.  The good news is that there are already adequate
laws In New Jersey to deal with COVID-19 claims without creating an ultra-high
legal presumption for a virus that is in every state and every country. 

Judges understand that health care workers and public safety workers often work in close proximity to people who may be infected.  They may also have non-work exposures as well.  In assessing whether any COVID-19 virus arises from work, workers’ compensation judges draw on their expertise in sorting out complex causation issues, factoring in work and non-work exposures.  For example, they evaluate claims for alleged cancer from second-hand smoke, Lyme disease, lead exposure, and other environmental claims. In doing so, workers’ compensation judges use a more probable than not legal standard. In fact, there already is a presumption in the 2019 Thomas Canzanella Twenty First Century First Responders Act that shifts the burden to employers to disprove certain claims involving public safety workers by the more probable than not standard.  The proposed coronavirus presumption not only shifts the burden of proof to employers but it imposes an extremely high legal presumption on employers that directly conflicts with the 2019 legal presumption created under the Thomas Canzanella law.  

Public policy is important, and the wrong policy is to vastly increase the financial burden on health care, government and their carriers by making virtually all COVID-19 claims compensable through an unrealistic new legal presumption.  Carriers did not collect pandemic premiums from their insureds. Requiring government, health care employers and their carriers to pay all COVID-19 claims regardless of causation will add create enormous financial pressure on governments, taxpayers, health care providers and the insurance industry. These are the unintended consequences that can be foreseen by proposed S. 2380.  Instead of creating an unrealistic legal presumption that makes a bad situation worse, elected leaders should focus on creating the equivalent of the current federal Paycheck Protection Program to help injured workers and to alleviate the insurance burden on health care, government and carriers.

The post Enhanced Legal Presumptions Do Not Make Sense For Pandemic-Related Claims appeared first on NJ Workers' Comp Blog.

The recently passed legislation L. 2019, C. 387 increasing the value of hand and foot injuries in New Jersey has generated considerable debate about which cases the law affects. Does it affect only cases filed after the date the law was passed?  Or does it affect all cases presently pending in the Division of Workers’ Compensation but not yet subject to a court order?

One point all practitioners agree on is that the law does
not affect prior court orders.  There is
no indication that the law was meant to be primarily retroactive, requiring old
orders to be reconsidered.  But there
remains the question of whether the law is supposed to be secondarily retroactive,
meaning affecting all present claims, even those filed before the effective
date of the law, but not yet subject to a court order.

The law states that “This act shall take effect
immediately.” There is no language specifically stating that the law should
have “prospective relief only,” nor any clear language stating that the law
should be in any way retroactive.  So the
focus is on the meaning of the words “shall
take effect immediately.”

Practitioners have two reported workers’ compensation cases to consider on this issue.  Unfortunately, these two cases seem to be in conflict. Both involve the dependency statute.  The first is Harris v. Branin Transport, 312 N.J. Super. 38 (App. Div.), certif. denied, 156 N.J. 408 (1998). In that case, Anne Harris became a statutory dependent back in 1979 when her spouse died in a work-related accident.  Under the old law, any income after 450 weeks had to be offset against dependency benefits.  Harris was earning $128 per week after 450 weeks, so that amount was deducted from her dependency award. 

In 1995 the law was changed removing the earnings credit.  Harris applied to end the removal of the earnings credit.  The question was whether or not the new law removing the earnings credit would apply to only new dependents after 1995 or to all current and existing dependents. The Appellate Division held that the new law was intended to apply to Harris and others like her who were already receiving dependency benefits, calling this “secondarily retroactive.”  The Supreme Court declined to accept the case, so that the Appellate Division stood.  If Harris is followed, the hand and foot bill would affect all existing claims in the Division not yet decided.

Nine years later another change in the dependency law occurred.  In Cruz v. Central Jersey Landscaping, Inc., 195 N.J. 33 (2008), the Supreme Court considered an amendment that removed the graduated dependency scale.  Prior to 2004, one dependent received 50% of wages, two received 55%, three received 60%, four received 65% and five or more received 70% of wages.  The new law established that one dependent alone would receive 70% of wages, eliminating the graduated scale.

Four separate cases were tried and eventually were
consolidated before the Supreme Court. 
All four claimants were existing dependents who had filed claims before
the law was passed in 2004, and they argued that they should get the benefit of
the new law.  The Division split on
whether the new law was prospective only; the Appellate Division ruled the new
law was secondarily retroactive as in Harris above, but the Supreme
Court reversed.  The very same language
appeared in that Act, namely that the law was supposed to have immediate
effect.   The Supreme Court held that the new law should
only apply to those who filed after the effective date of the Act.  The Supreme Court said:

Indeed there is nothing in the amendments or in the sponsors’ statements that suggests that the Legislature intended to give the new benefit level retroactive effect of any kind.  We certainly see no basis in the legislative history, and in an interpretive framework that includes our prior holding that vesting occurs on the date of death, to conclude that the Legislature intended to effect a reopener of settled awards.  Nor is there anything in the directive that the act ‘shall take effect immediately’ to suggest retroactivity.  On the contrary, these words bespeak an intent contrary to, and not supportive of, retroactive application.

The Supreme Court interpreted the words “shall take effect immediately” to imply only to those cases filed in the future, i.e., filed after the effective date of the amendment to the Act.   The Court was concerned about how far back one goes, stating that retroactive application would mean reaching even beyond pending and non-finalized claims, implying that it could be applied to closed orders in the past.  But no one is arguing that the hand and foot bill should affect orders entered in the past. The argument on the hand and foot bill is between secondary retroactivity (existing claims) versus prospective effect.  If Cruz is followed, the hand and foot bill will only apply to claim petitions filed after the effective date in late January 2020. 

It is very difficult to reconcile the decision in Harris with the decision in Cruz.  In Harris the Supreme Court did not take the case and therefore let the Appellate Division stand; In Cruz the Supreme Court took the case and reversed.  The decisions were only nine years apart but the reasoning diverged markedly.  

This practitioner has spoken with many attorneys and clients
about this issue.  Defense attorney Joe
Soriano took the time to review the legislative history and the sponsor’s
statement and notes that there is no clear intention that the bill should be
retroactive in any way.   He points out
the word “retroactive” does not appear anywhere in the legislative history,
sponsor’s statement or the legislation itself.

This practitioner has also spoken with several petitioners’
counsel.  They make the point that the
words “shall take effect immediately” do not mean the same thing as “shall have
prospective effect.”  The argument from
the petitioner side is that if that was the intention, why wouldn’t the
Legislature have simply said:  “This law
shall only apply to claim petitions filed after the effective date.”  The meaning of the language “shall take effect
immediately “ is open to interpretation.

In the meantime, what should employers and carriers do?  Suppose they settle a case without paying the
new higher rates on hand and foot injuries, only to receive a decision a year
from now from the Appellate Division ruling that they should have paid the
increased weeks?  In that instance, the
award would have to be reopened and corrected. 
For this reason, it may be wise to reserve for this potential outcome
until there is a decision.

What about petitioners’ counsel?  Suppose the Judge of Compensation rules that the petitioner is entitled to the benefit of the new law, only for the Appellate Division to rule a year from now that the law is not retroactive.  Does the petitioner owe the money back to the carrier?  Should an amount be set aside for that eventuality? 

The sooner we hear from the courts on this issue the better for all workers’ compensation practitioners. We thank the many counsel who have provided their input on this important issue.

The post Questions Remain On Which Cases Are Affected By The New Hand And Foot Bill appeared first on NJ Workers' Comp Blog.

New Jersey Governor Phil Murphy this week signed into law the long-considered hand and foot Bill, increasing the amount of workers’ compensation benefits paid for injuries producing loss of function for such injuries. The Bill accomplishes the legislature’s goal of providing greater compensation for hand and foot injuries by increasing the number of weeks that an employer will pay.  L. 2019, C. 387 also provides modest increases in awards for loss of function of the fingers.

To understand how the new law works, it is important to appreciate that loss of function in New Jersey is compensated with payments of weeks that vary depending on the part of body that is injured.  The more weeks one receives, the more money one receives.  Injuries producing loss of function to the trunk, head, neck, back, shoulder, and hip (falling under the partial total category on the rate chart) are compensated the highest in New Jersey with each percentage correlating to a payment of 6 weeks.  So an award of 50% for loss of function of the back means payments will be made over 300 weeks because each percent awarded is multiplied by 6 to arrive at total weeks.  

Historically, hand and foot injuries have been compensated
with a relatively small number of weeks compared to those involving the back,
neck, trunk, and shoulder as described above. 
Currently an injury producing loss of function of 1% of the hand is
compensated with 2.45 weeks.  Under the
new law, such an injury is now compensated at 2.6 weeks until the award level reaches 25%.  Similarly, under current law an injury
producing loss of function of 1% of the foot is compensated with 2.3
weeks.  Under the new law, each percent of
loss of function of the foot is now compensated at 2.5 weeks until the award level reaches 25%.  

Here is the big change.  For more serious hand and foot injuries, the new law creates a stepped up number of weeks.  This is new to New Jersey law.  L. 2019, C. 387 creates a disability threshold at which there is now a second increase in the number of weeks over current law.  The threshold is 25% loss of function.  Once an award is found to produce loss of function of 25% of the hand, each percentage of the hand is compensated at 3 weeks instead of 2.6 weeks (current law is 2.45 weeks).  Similarly, at 25% of the foot, each percentage of the foot is compensated at 2.85 weeks instead of 2.5 weeks (current law is 2.3 weeks).  So the big change is that hand and foot injuries, unlike all other scheduled losses (legs, arms, etc) will have two schedules for weeks for compensation.  There will be one weekly schedule for loss of function under 25%, and then a new weekly schedule for loss of function of 25% or higher.

This sounds confusing but it is easier to understand by considering an award of 25% of the hand and 25% of the foot.  Such an individual will receive 75 weeks of benefits (3 weeks times 25) instead of 65 weeks because there is an upward adjustment in the number of weeks at the 25% level. (Note that current law is 61.25 weeks for 25% of the hand).  An injured worker with an award of 25% of the foot will receive 71.25 weeks of benefits instead of 62.5 weeks if there had been no upward adjustment in the number of weeks. (Note that current law is 57.5 weeks for 25% of the foot).  This will make a larger percentage difference in dollars as the loss of function rises. 

This concept should ring a bell for experienced practitioners who know about the “bump” at 30% permanent partial disability.  In 1979, the New Jersey Legislature accomplished the same goal of compensating more serious injuries with higher dollar rates when an injury produces loss of function greater than 30% or above 180 weeks.  The hand and foot bill does it differently.  It does not increase the dollar rate for each week, but rather it increases the number of weeks of compensation one will receive once an injury reaches the 25% loss of function threshold.   An injured worker will receive more weeks of compensation over current law for hand and foot injuries no matter what the percentage, but when the injury produces loss of function of 25% or higher, that injured worker will receive an upward adjustment to his or her weeks starting from week one.

Let’s consider an award of 50% of the hand and 50% of the
foot under the new law at 2020 rates versus the current law.  One can see that in actual dollars, the new
law generates substantially more money to an injured worker on account of the
jump in weeks for any award at or above 25%.

Current law – 50% of the hand equals 122.5 weeks or $33,364
New law – 50% of the hand equals 150 weeks or $43,128 (an increase of 29%)

Current law – 50% of the foot equals 115 weeks or $30,969
New law – 50% of the foot equals 142.5 weeks or $40,318.50 (an increase of 30%)

Now let’s compare an award of 15% for carpal tunnel syndrome
and an award of 15% for tarsal tunnel syndrome:

Current law – 15% of the hand equals $9,261
New law – 15% of the hand equals $9,828 (an increase of 6%)

Current law – 15% of the foot equals $8,694
New law – 15% of the foot equals $9,450 (an increase of 8%)

Readers can see that the percentage increase in dollars on small awards is far less than the percentage increase on higher awards.  The new law also makes some minor changes in compensation for the following finger injuries in terms of adjusting weeks higher:

• 80 weeks of compensation for the low of a thumb (currently 75);
• 60 weeks of compensation for the loss of a first (index) finger (currently 50);
• 50 weeks of compensation for the loss of a second finger (currently 40);
• 40 weeks of compensation for the loss of a third finger (currently 30);
• 30 weeks of compensation for the loss of a fourth (little) finger (currently 20)

There are two other changes to N.J.S.A. 34:15-12 worth mentioning as part of this Bill.  Section 12E has been amended to raise from $3,500 to $5,000 the amount paid by the employer in case of death of the person from any cause other than the accident or occupational disease during the period of payments of permanent injury.  The remaining payments shall be paid to such of the deceased person’s dependents or, if there are no dependents, the remaining amount due, but not exceeding $5,000, shall be paid for burial or funeral expenses.

In addition, Section 12(c) has been amended to read: “An award of permanent total disability shall not bar an additional amount from being added to an amputation award.  The amount of the additional award shall not be subject to subrogation pursuant to R.S. 34:15-40, as it shall not be considered a payment for compensation except for rating purposes.”  This clarifies that the so-called amputation bonus is not lienable and is payable even in the case of a total and permanent disability award.

For copies of the new law, feel free to contact the undersigned. This new law is now in effect on all cases.

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