Governor Signs Workers' Compensation Reform Bill to Take Effect July 1, 2007

On June 25, 2007, South Carolina Governor Mark Sanford signed into law a measure reforming workers’ compensation law in South Carolina.  Senate Bill 332 (R163), which takes effect on July 1, 2007, applies to accidents and injuries occurring on or after that date (unless otherwise provided).  The bill was reportedly passed in response to workers’ compensation premiums increasing at an alarming rate and concerns expressed by employers over recent court decisions.

While all the changes are important and will need to be addressed by employers and their carriers in the upcoming months, below is a brief discussion of some of the more notable changes affecting employers.

• Dissolution of the Second Injury Fund.  Provides for the orderly dissolution of the Second Injury Fund by 2013, with no claims being accepted for reimbursement beyond December 31, 2011 and for any such claims, all required information must be submitted by June 30, 2011.  Moreover, the fund will not consider reimbursement claims for injuries that occur after July 1, 2008.  In addition, some of the presumptive conditions that result in coverage under the Fund will be eliminated.
• Repetitive Trauma Defined to Require Medical Evidence of Direct Causation.  “Repetitive trauma injury” will be statutorily defined and will require medical evidence from a licensed and qualified physician of a direct causal connection between the repetitive activities and the injury.  Currently, Commissioners can rely on lay testimony, typically the employee, to establish causation.
• Medical Treatment to Lessen Period of Disability Requires Medical Evidence.  Commission orders requiring additional medical treatment to lessen the period of the employee’s disability will have to be based on medical evidence.  Currently, it is within the Commissioner’s discretion to order such treatment and medical evidence is not required.
• Employer Contact With Health Care Providers Allowed.  By seeking workers’ compensation benefits for an injury disease or condition the employee consents to release of medical records relating to such.  Moreover, the treating health care provider may discuss or communicate such treatment with the employee’s employer, insurance carrier, or their respective attorney without employee consent.  However, such communications will be excluded from hearings unless the employee is:
• Notified by the health care provider of the communication in advance and is given an opportunity to attend and participate;
• Notified by the employer of the nature of the discussion in advance; and
• Provided with any written questions given to the health care professional and any response provided thereafter.

Currently, an employee can prevent such communications by withholding consent.

• Notice and Statute of Limitations in Repetitive Trauma Cases to Run From Discovery Date.  Notice of repetitive trauma injuries must be provided within 90 days of the date the employee discovered or could have discovered exercising reasonable diligence, that the condition was compensable unless reasonable excuse is given and the employer has not been prejudiced by the delay.  Claims for repetitive trauma injuries must be commenced within two years of the discovery date or seven years after the last date of injurious exposure, regardless of when the work-related cause was discovered.  Currently, the time to provide notice or file a claim runs from the date the employee discovers the condition is work related and is disabled as a result. 
• Back Impairments Greater than 50% No Longer Deemed to Result in Permanent and Total Disability.  Permanent impairment to the back of 50% or greater will create a rebuttable presumption of permanent and total disability.  Currently, such a disability rating means the employee is statutorily deemed to be permanently and totally disabled.
• Shoulder and Hips Added as Scheduled Members.  Shoulders (300 weeks) and hips (280 weeks) will be added to the list of scheduled members for which a specific number of weeks is assigned for total disability.  Currently, injuries to shoulders and hips are compensated under the general disability statute, carrying a maximum benefit of 500 weeks.
• New and Increased Penalties/Fines.  False representations, depending on the amount of undeserved economic benefit or advantage gained, can result in misdemeanor or felony convictions with prison sentences of up to 10 years and related fines of up to $100,000 in addition to restitution.  Failure to provide commission-ordered medical treatment without good cause can result in fines of $500/day and attorneys’ fees for the employee.  The new law also will increase the penalties imposed against employers that fail to obtain insurance.
• Additional Categories of Employers/Employees Excluded from Coverage

• Railroads, railroad employees, railway express companies and employees
• Licensed real estate agents paid on a commission basis who sign independent contractor agreements
• Certain agricultural salespersons
• Driver/owners who provide their vehicles and driving services to a motor carrier under an independent contractor agreement.

Additional Information

The full bill may be viewed at www.scstatehouse.net, by searching Bill No. R163.  Should you have any questions regarding the above changes or would like more information regarding all the changes in the Workers’ Compensation reform bill, contact Mary Lou Hill (Greenville), Bill Duda (Columbia) or Bernard Tisdale (Charlotte).

Note: This article was published in the June 2007 issue of the South Carolina eAuthority.