State News : Tennessee

June 2024

Tennessee Workers’ Compensation Legislative Changes

The 2024 year brings the following legislative updates to Tennessee Workers’ Compensation Law: Public Chapter 532; Public Chapter 666; Public Chapter 0813; Public Chapter 492; Public Chapter 498; and Public Chapter 499. These legislative changes range from clarifications to filing First Reports of Injury, to extensions of the Bureau of Workers’ Compensation’s authority to enforce laws.

The first of several updates in recent Tennessee Workers’ Compensation Law finds its place in the Public Chapter 532. This Bill was signed by Governor Lee on March 7, 2024, and becomes effective on July 1, 2024. This Bill amends current Tennessee laws to make a consistent, uniform period of 14 days for electronic filing for the First Report of Injury to the Bureau of Workers’ Compensation (BWC), as well as removing the Notice of Controversy form requirement – a filing is now made electronically via Electronic Data Interchange (EDI). This Bill further provides clarification that uninsured employers penalties apply to construction and non-construction entities. Finally, this Bill extends the sunset of PC 189 (2021) until July 1, 2029 – allowing the Bureau of Workers’ Compensation to continue to enforce workers’ compensation insurance coverage laws.

Another legislative change is Public Chapter 666. This Bill enacts the Tennessee Self-Insurers’ Guaranty Association Act, creating the Tennessee Self-Insurers’ Guaranty Association – a nonprofit, unincorporated legal entity. The purpose of this Act is to provide for a streamlined and more efficient process for the payment of self-insured workers’ compensation claims. It will also serve as an avenue for the assessment of costs of the protection among those self-insured. This Bill was signed by Governor Lee on April 9, 2024, and became effective upon signing.

The legislative updates continue with Public Chapter 0813. This Bill requires the Comptroller of the Treasury (COT) to conduct a study of all insurers – including insurance pools – that provide policies of workers’ compensation coverage to local government entities. This will include a review of solvency and a comparative rate study. The Bill additionally requires the COT to report the findings to the Speaker of the Senate and the House of Representatives by January 1. 2025. This was signed by Governor Lee on April 29, 2024, and became effective immediately.

The final legislative updates for 2024 lie in Public Chapter 492, Public Chapter 498, and Public Chapter 499. These, respectively, (1) extend the Bureau of Workers’ Compensation to June 30, 2029; (2) extend the Medical Advisory Committee to June 30, 2029; and (3) extend the Medical Payment Committee to June 30, 2029.

Each of the preceding bills have been signed by Governor Bill Lee, and are either effective July 1^st, or were effective upon their signing.

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

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