The Twelve Rules of Workers’ Compensation
The purpose of this article is to provide an overview of certain primary aspects of the New Hampshire workers’ compensation law and process. It is intended to be a summary for employers, adjusters and those that toil day in and day out in the fields of workers’ compensation claims.
A Brief History
New Hampshire was one of the first states to adopt a comprehensive compensation scheme for those workers that had suffered an industrial accident. A child of the industrial era, compensation schemes were intended to provide prompt and certain benefits to workers when they were injured or could not work due to an industrial accident. Employees gave up the right to sue their employer in tort, such as for pain and suffering. In exchange, employers paid defined wage, medical, vocational and permanent impairment awards for work related injuries. This is the so-called quid pro quo of most, if not all, workers’ compensation statutes.
Since this legislation was put in place, employers—either directly through their insurers or homogeneous groups that self insure—have been obligated to administer claims and provide those benefits required under law. This system is managed and adjudicated by the New Hampshire Department of Labor (DOL), and there are a handful of critical rules that apply. These rules—and the Department’s enforcement of them—affect a variety of entities and people involved in the system, including employers and insurers. In no special order, the rules are outlined in the following pages.
Rule 1: File a Wage Schedule
If workers’ compensation/disability payments are made or modified, a Memo of Payment must be filed with the DOL reflecting the issuance or modification of disability benefits. If it is the first time disability payments are being issued a wage schedule, a Memo of Payment must be filed with the DOL per Lab Rule 506.02, Payments of Benefits and Filing of Reports. Wage schedule requirements are outlined in New Hampshire Administrative Lab Rule 515.13.
The wage schedule is used to calculate average weekly wage (AWW). Typically, the AWW is calculated using a 26-week wage schedule. The 26 weeks preceding the date of injury are used. Up to a 52-week wage schedule can be used. A 52-week wage schedule must be provided and used if requested by the employee or the DOL per Lab Rule 506.02 (e)(4). Where wages for 26 weeks prior to the date of injury are not available, the average weekly wage will be established through an alternate method, including potentially the use of rate of hire or wages from similarly situated employees. For more details, see RSA 281-A:15, Average Weekly Wage and New Hampshire Administrative Lab Rule 506.02 (e)(1-7).
Rule 2: Accept/Deny Medical Bills within 30 Days
In an accepted workers’ compensation claim, all medical bills that are reasonable, necessary and causally related to the work related injury should be paid. Carriers and self-insured often pre-approve payment of medical bills associated with medical treatment clearly related to the work injury. However, under the New Hampshire workers’ compensation law, carriers and self-insureds are not required to pre-approve payment for medical treatment, unless ordered to do so by the DOL, after a hearing addressing a request to pre-approve medical treatment.
A medical bill denial must:
Be issued within 30 days of receipt of the medical bill
Be in narrative (letter form) to the claimant and copied to both the medical care provider and DOL
Advise the claimant of the reason for denial, such as treatment not causally related to injury
Advise the claimant of their right to request a hearing at the DOL, if the claimant disagrees with the denial. (See Lab Rule 506.02 (i) and (j) for more details.)
If a medical bill denial is not properly issued and the matter goes to a hearing, the bills may be ordered paid without the merits of the denial being heard. In addition, if a medical bill denial is not properly issued, the DOL has the authority to assess fines per Lab Rule 506.02 (k).
Although a fee schedule does not exist in New Hampshire, the carrier or self-insured has the option to accept the reasonableness, necessity and relatedness of medical treatment but object to the amount of the bill. For detailed information on this process, see RSA 281-A:24, Reasonable Value of Services and Lab Rule 506.02 (l).
Rule 3: Provide Temporary Alternative Duty
If an employer has five or more employees, the workers’ compensation law requires that temporary alternative duty (TAD) is provided. RSA 281-A:23-b, Alternative Work Opportunities is actually quite brief on the subject while the associated Lab Rule 504.04, Development of Temporary Alternative Work is more instructive. Both 23-b and 504.04 require the provision of TAD. The latter states that the work is to be transitional in nature and consistent with the claimant’s restrictions.
The claimant’s physician should approve a written description of the alternative position, and the claimant should be advised of and offered the alternative position in writing. The claimant has a responsibility to make a reasonable effort to comply with the offer of TAD. For practical purposes, if TAD is approved, offered and the claimant does not comply, a request for hearing (under New Hampshire RSA 281-A:48, Review of Eligibility for Compensation) can be submitted to review the entitlement to ongoing weekly benefits. If TAD is not offered, a claimant on total benefits with a restricted work release will likely remain on total weekly benefits despite the work release.
Rule 4: Report Injury within Two Years
RSA 281-A:19, Notice of Injury states that a claim for workers’ compensation benefits will be barred unless notice of the injury is provided to the employer within two years from the date of the injury. RSA 281-A:21-a, Time Limitations for Filing Claim states that “compensation for disability, rehabilitation, medical benefits, shall be barred unless a claim is filed within 3 years."
The statute requires notice by two years and a claim for benefits be made within three years or the claim is time barred. The time periods begin on the date of injury or the date the employee knows—or by reasonable diligence should know—of the nature of the injury and its possible relationship to the employment. In cases of death, the date of injury is when any dependent should have reasonably known the nature of injury and its relationship to employment.
Rule 5: Accept/Deny Claim within 21 Days
The New Hampshire workers’ compensation law requires that a workers’ compensation claim be accepted or denied by an insurance carrier or self-insured within 21 days of notification of the claim. The requirement to accept or deny a claim within 21 days and the potential penalty for failure to do so are outlined in RSA 281-A:42, I, Failure to Make Payments of Compensation.
If the claim is accepted and disability payments are made, a Memo of Payment must be filed with the DOL. If the claim is denied, a Memo of Denial must be filed with the DOL. If a Memo of Denial is properly issued, a claimant then has 18 months from the date the claimant received the denial to request a hearing at the DOL or the claim is time barred pursuant to RSA 281-A:42, Time Limitation for Petition for Hearing.
Rule 6: File a Correct Memo of Payment
Under RSA 281-A:40, a Memo of Payment (MOP) must be filed to reflect any payment of workers’ compensation disability benefits or change in payment of workers’ compensation disability benefits made to a claimant. Failure to submit a MOP can result in fines being assessed by the DOL. All MOPs filed with the DOL can be—and are regularly—rejected and returned if incorrect or incomplete. For detailed instruction on completing MOPs, see Lab Rule 506.02, Payment of Benefits and Filing of Reports.
Rule 7: Heed Second Injury Fund Criteria
What is commonly referred to in New Hampshire as the “second injury fund" is actually the “Special Fund for Second Injuries" and is established by RSA 281-A:55, Special Fund for Second Injuries. Requirements to be eligible for payments from the second injury fund are outlined in RSA 281-A:54, Payment for Second Injuries from Special Fund and RSA 281-A:55-a, Reimbursement of Payment of Additional Compensation. New Hampshire RSA 281-A:54 and :55-a address potential reimbursement from the special fund for workers’ compensation benefits paid as a result of work related subsequent injuries, concurrent earnings and job modification expenses.
RSA 281-A:54 states that an individual with a preexisting, permanent mental or physical impairment (work related or not) who suffers a subsequent work related injury and the combined effect of the preexisting and subsequent condition create a greater disability may be eligible for reimbursement from the second injury fund.
Rule 8: Demonstrate Change in Condition
In order to request a DOL hearing to review a claimant’s eligibility for weekly compensation, the requesting party must demonstrate a “change in condition." The statutory authority for this is in RSA 281-A:48, Review of Eligibility for Compensation. The rule governing the requirements for a review of eligibility for compensation is Lab Rule 510.01, Basis of Petition.
Rule 9: Get Permanent Impairment Assessment
RSA 281-A:32, Scheduled Permanent Impairment Awards provides the requirements for assessment and payment of permanency. An assessment of permanent impairment for purposes of workers’ compensation should occur at maximum medical improvement. The physician assessing permanency should use the most recent edition of the American Medical Association’s Guidelines to Assessment of Permanent Impairment.
Once a permanent impairment assessment—after maximum medical improvement—is disclosed, the carrier or self-insured can accept or not accept the permanent impairment as it has been assessed. If accepted, a Memo of Permanent Impairment Award should be filed with the DOL, requesting approval of the award. If the DOL approves the permanency, payment should be issued.
If the carrier or self-insured objects to the assessed permanent impairment, the claimant and the DOL should be notified of the objection, in writing, within 15 days from the date the permanent impairment was disclosed to the carrier of self-insured. The carrier or self-insured then has 30 days to schedule an independent medical exam to assess permanent impairment.
Rule 10: Evaluate Recovery/Lien Rights
RSA 281-A:8 removes the workers’ compensation claimant’s right to sue their employer directly in civil court for damages associated with a work related injury. The bar extends to spouses of claimants as well per RSA 281-A:8, II. There are exceptions related to intentional torts as noted in RSA 281-A:8, I(a). Wrongful termination claims are expressly excluded from the bar per RSA 281-A:8, III.
Third party liability is not barred by the workers’ compensation statute. The issue of third party liability is addressed in RSA 281-A:13, Liability of Third Persons. If a successful third party action results from a work related injury and workers’ compensation benefits have been paid, a workers’ compensation lien is created against the third party proceeds. In addition, to the extent a claimant receives a net settlement from the third party action, the carrier or self-insured is not required to pay work related injury medical bills. This is called the “holiday."
Rule 11: Comply with DOL Orders
There are several provisions of the New Hampshire workers’ compensation statute and Lab Rules that provide the DOL authority to assess fines. An employer or insurer’s failure to pay claims timely or file proper documentation often lead to fining situations up to $2,500 as cited in Lab Rule 512, Civil Penalties for Non-Compliance.
Rule 12: Return Labor Department Calls
If a DOL representative calls a representative of an employer, third party administrator, self insured or insurance carrier concerning an issue or claim, the call should be returned as promptly as possible.
For more details regarding any of the Lab Rules cited in this article, please visit the DOL’s Web site at www.labor.state.nh.us and click on the left-hand menu’s “Workers’ Compensation" link. There you will find a handy RSA 281-A hotlink that connects to a full listing of New Hampshire Statutes related to workers’ compensation.
J. Kirk Trombley is a trial attorney whose New Hampshire-based litigation practice includes workers’ compensation, insurance, liability and employment law matters.