74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
Enrolled
Senate Bill 559
Sponsored by COMMITTEE ON COMMERCE
CHAPTER ................
AN ACT
Relating to workers' compensation guaranty contracts; creating
new provisions; and amending ORS 654.097, 656.005, 656.039,
656.128, 656.210, 656.268, 656.407, 656.419, 656.423, 656.427,
656.440, 656.443, 656.447, 656.622, 656.628, 656.726, 656.730,
656.740, 656.850, 731.158, 731.475, 731.480, 731.590, 731.608,
731.628, 737.602 and 746.145.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 656.419 is amended to read:
656.419. (1) A { - guaranty contract - } { + workers'
compensation insurance policy + } issued by an insurer { + under
this section + } shall provide that the insurer agrees to assume,
without monetary limit, the liability of the employer, arising
during the period the
{ - guaranty contract - } { + policy + } is in effect, for
prompt payment of all compensation for compensable injuries that
may become due under this chapter to subject workers and their
beneficiaries.
(2) { + (a) + } { - A guaranty contract issued by a guaranty
contract - } { + The + } insurer { + issuing the workers'
compensation insurance policy + } shall { - be filed - }
{ + file proof of coverage + } with the Director of the
Department of Consumer and Business Services { - by the
insurer - } within 30 days after workers' compensation coverage
of the employer is effective. The filing shall be in
{ - such - } { + the + } form and manner { + and shall
include any information that + } { - as - } the director may
prescribe { + by rule + }. { - A guaranty contract shall
contain: - }
{ - (a) The name and address of the employer; - }
{ - (b) A description of the occupation in which the employer
is engaged or proposes to engage; - }
{ - (c) The effective date of the workers' compensation
coverage; - }
{ - (d) Notice that an employer has elected to provide
coverage pursuant to ORS 656.039; and - }
{ - (e) Such other information as the director may from time
to time require. - }
{ + (b) An insurer shall file the proof of coverage required
under this section for each new or renewed policy issued by the
insurer. + }
(3) Workers' compensation coverage is effective when the
application of the subject employer for coverage together with
Enrolled Senate Bill 559 (SB 559-A) Page 1
any required fees or premium are received and accepted by an
authorized representative of an insurer { + or on the date
specified in writing by the employer and the insurer + }.
{ - (4) If the name or address of an insured employer is
changed, the insurer shall, within 30 days after the date the
change is received by the insurer, file a change-of-name or
change-of-address notice with the director setting forth the
correct name and address of the employer. - }
{ - (5) - } { + (4) + } Coverage of an employer under a
{ - guaranty contract - } { + workers' compensation insurance
policy + } continues until { - canceled or terminated as
provided by ORS 656.423 or 656.427. - } { + :
(a) The expiration of the term of the policy;
(b) The coverage is canceled prior to the expiration date of
the policy as provided by ORS 656.423 or 656.427;
(c) Another insurer files proof of coverage on behalf of the
employer; or
(d) The employer becomes self-insured under ORS 656.430. + }
SECTION 2. ORS 656.423 is amended to read:
656.423. (1) An insured employer may cancel coverage with the
insurer by giving the insurer at least 30 days' written notice,
unless a shorter period is permitted by subsection (3) of this
section.
(2) Cancellation of coverage is effective at 12 midnight 30
days after the date the cancellation notice is received by an
authorized representative of the insurer, unless a later date is
specified.
(3) An employer may cancel coverage effective less than 30 days
after written notice is received by an { - agent - } { +
authorized representative + } of the insurer by providing other
coverage { + , + } { - or - } by becoming a self-insured
employer { + or by agreement of the employer and the
insurer + }. A cancellation under this subsection is effective
immediately upon the effective date of the other coverage { + ,
on + } { - or - } the effective date of certification as a
self-insured employer { + or on a date agreed upon in writing by
the employer and insurer + }.
{ + (4) The insurer shall file a notice of cancellation with
the Director of the Department of Consumer and Business Services
within 10 calendar days after the effective date of the
cancellation or the date on which the insurer receives the notice
required under subsection (1) of this section, whichever is
later. The notice required under this subsection shall be in the
form and manner and shall contain any information that the
director may prescribe by rule. + }
SECTION 3. ORS 656.427 is amended to read:
656.427. (1) An insurer that issues { - a guaranty contract
or a surety bond - } { + a workers' compensation insurance
policy or surety bond + } to an employer under this chapter may
{ - terminate liability on its contract or bond, as the case may
be, - } { + cancel the policy or surety bond prior to the
expiration date of the policy or surety bond + } by giving the
employer and the Director of the Department of Consumer and
Business Services notice of { - termination - }
{ + cancellation + } in accordance with rules adopted by the
director. { - A notice of termination shall state the effective
date of termination. - } { + Notice required under this section
must be provided to the director within 10 calendar days after
the effective date of the cancellation provided in the notice
given to the employer. + }
Enrolled Senate Bill 559 (SB 559-A) Page 2
(2) An insurer may { - terminate liability - } { + cancel a
workers' compensation insurance policy or surety bond + } under
this section as follows:
(a) If the { - termination of a guaranty contract - } { +
cancellation + } is for reasons other than those set forth in
paragraph (b) of this subsection, it is effective at 12 midnight
not less than 30 days after the date the notice is mailed to the
employer.
(b) If the { - termination of a guaranty contract - }
{ + cancellation + } is based on the insurer's decision not to
offer insurance to employers within a specific premium category,
it is effective not sooner than 90 days after the date the notice
is mailed to the employer.
(c) The termination of a surety bond is effective at 12
midnight not less than 30 days after the date the notice is
received by the director.
{ + (3) An insurer may nonrenew a workers' compensation
insurance policy by providing notice in the manner provided for
in subsection (2) of this section. + }
{ - (3) - } { + (4) + } Notice to the employer under this
section shall be given by mail, addressed to the employer at the
last-known address of the employer. If the employer is a
partnership, notice may be given to any of the partners. If the
employer is a limited liability company, notice may be given to
any manager, or in a member managed limited liability company, to
any of the members. If the employer is a corporation, notice may
be given to any agent or officer of the corporation under whom
legal process may be served.
{ - (4) - } { + (5) + } { - Termination - }
{ + Cancellation of a workers' compensation insurance policy or
surety bond + } shall in no way limit liability that was incurred
under the { - guaranty contract or surety bond - } { + policy
or surety bond + } prior to the effective date of the
{ - termination - } { + cancellation + }.
{ - (5) - } { + (6) + } If, before the effective date of a
{ - termination - } { + cancellation + } under this section,
the employer gives notice to the insurer that it has not obtained
coverage from another insurer and intends to become insured under
the assigned risk plan established under ORS 656.730, the insurer
shall { - insure - } { + ensure + } that continuing coverage
is provided to the employer under the plan without further
application by the employer, transferring the risk to the plan as
of the effective date of { - termination - }
{ + cancellation + }. If the insurer is a servicing carrier
under the plan, it shall continue to provide coverage for the
employer as a servicing carrier, at least until another servicing
carrier is provided for the employer in the normal course of
administering the plan. If the insurer is not a servicing
carrier, it shall apply to the plan for coverage on the
employer's behalf. Nothing in this section is intended to limit
the authority of administrators of the plan to require the
employer to provide deposits or to make payments consistent with
plan requirements. However, the rules of the plan shall allow
any deposit requirements imposed by the plan to be deferred for
as long as one year.
{ + (7) The cancellation of a workers' compensation insurance
policy under this section is effective on the earliest of:
(a) The expiration of the term of the policy;
(b) The effective date of a cancellation under subsection (2)
of this section; or
Enrolled Senate Bill 559 (SB 559-A) Page 3
(c) The effective date of a policy for which another insurer
makes a proof of coverage filing on behalf of the employer. + }
SECTION 4. ORS 656.726 is amended to read:
656.726. (1) The Workers' Compensation Board in its name and
the Director of the Department of Consumer and Business Services
in the director's name as director may sue and be sued, and each
shall have a seal.
(2) The board hereby is charged with reviewing appealed orders
of Administrative Law Judges in controversies concerning a claim
arising under this chapter, exercising own motion jurisdiction
under this chapter and providing such policy advice as the
director may request, and providing such other review functions
as may be prescribed by law. To that end any of its members or
assistants authorized thereto by the members shall have power to:
(a) Hold sessions at any place within the state.
(b) Administer oaths.
(c) Issue and serve by the board's representatives, or by any
sheriff, subpoenas for the attendance of witnesses and the
production of papers, contracts, books, accounts, documents and
testimony before any hearing under ORS 654.001 to 654.295,
654.750 to 654.780 and this chapter.
(d) Generally provide for the taking of testimony and for the
recording of proceedings.
(3) The board chairperson is hereby charged with the
administration of and responsibility for the Hearings Division.
(4) The director hereby is charged with duties of
administration, regulation and enforcement of ORS 654.001 to
654.295, 654.750 to 654.780 and this chapter. To that end the
director may:
(a) Make and declare all rules and issue orders which are
reasonably required in the performance of the director's duties.
Unless otherwise specified by law, all reports, claims or other
documents shall be deemed timely provided to the director or
board if mailed by regular mail or delivered within the time
required by law. Notwithstanding any other provision of this
chapter, the director may adopt rules to allow for the electronic
transmission and filing of reports, claims or other documents
required to be filed under this chapter { + and to require the
electronic transmission and filing of proof of coverage required
under ORS 656.419, 656.423 and 656.427 + }. Notwithstanding ORS
183.310 to 183.410, if a matter comes before the director that is
not addressed by rule and the director finds that adoption of a
rule to accommodate the matter would be inefficient, unreasonable
or unnecessarily burdensome to the public, the director may
resolve the matter by issuing an order, subject to review under
ORS 656.704. Such order shall not have precedential effect as to
any other situation.
(b) Hold sessions at any place within the state.
(c) Administer oaths.
(d) Issue and serve by representatives of the director, or by
any sheriff, subpoenas for the attendance of witnesses and the
production of papers, contracts, books, accounts, documents and
testimony in any inquiry, investigation, proceeding or rulemaking
hearing conducted by the director or the director's
representatives. The director may require the attendance and
testimony of employers, their officers and representatives in any
inquiry under this chapter, and the production by employers of
books, records, papers and documents without the payment or
tender of witness fees on account of such attendance.
Enrolled Senate Bill 559 (SB 559-A) Page 4
(e) Generally provide for the taking of testimony and for the
recording of such proceedings.
(f) Provide standards for the evaluation of disabilities. The
following provisions apply to the standards:
(A) The criterion for evaluation of permanent impairment under
ORS 656.214 is the loss of use or function of a body part or
system due to the compensable industrial injury or occupational
disease. Permanent impairment is expressed as a percentage of the
whole person. The impairment value may not exceed 100 percent of
the whole person.
(B) Impairment is established by a preponderance of medical
evidence based upon objective findings.
(C) The criterion for evaluation of work disability under ORS
656.214 is permanent impairment as modified by the factors of
age, education and adaptability to perform a given job.
(D) When, upon reconsideration of a notice of closure pursuant
to ORS 656.268, it is found that the worker's disability is not
addressed by the standards adopted pursuant to this paragraph,
notwithstanding ORS 656.268, the director shall stay further
proceedings on the reconsideration of the claim and shall adopt
temporary rules amending the standards to accommodate the
worker's impairment.
(E) Notwithstanding any other provision of this section, only
impairment benefits shall be awarded under ORS 656.214 if the
worker has been released to regular work by the attending
physician or nurse practitioner authorized to provide compensable
medical services under ORS 656.245 or has returned to regular
work at the job held at the time of injury.
(g) Prescribe procedural rules for and conduct hearings,
investigations and other proceedings pursuant to ORS 654.001 to
654.295, 654.750 to 654.780 and this chapter regarding all
matters other than those specifically allocated to the board or
the Hearings Division.
(h) Participate fully in any proceeding before the Hearings
Division, board or Court of Appeals in which the director
determines that the proceeding involves a matter that affects or
could affect the discharge of the director's duties of
administration, regulation and enforcement of ORS 654.001 to
654.295 and 654.750 to 654.780 and this chapter.
(5) The board may make and declare all rules which are
reasonably required in the performance of its duties, including
but not limited to rules of practice and procedure in connection
with hearing and review proceedings and exercising its authority
under ORS 656.278. The board shall adopt standards governing the
format and timing of the evidence. The standards shall be
uniformly followed by all Administrative Law Judges and
practitioners. The rules may provide for informal prehearing
conferences in order to expedite claim adjudication, amicably
dispose of controversies, if possible, narrow issues and simplify
the method of proof at hearings. The rules shall specify who may
appear with parties at prehearing conferences and hearings.
(6) The director and the board chairperson may incur such
expenses as they respectively determine are reasonably necessary
to perform their authorized functions.
(7) The director, the board chairperson and the State Accident
Insurance Fund Corporation shall have the right, not subject to
review, to contract for the exchange of, or payment for, such
services between them as will reduce the overall cost of
administering this chapter.
Enrolled Senate Bill 559 (SB 559-A) Page 5
(8) The director shall have lien and enforcement powers
regarding assessments to be paid by subject employers in the same
manner and to the same extent as is provided for lien and
enforcement of collection of premiums and assessments by the
corporation under ORS 656.552 to 656.566.
(9) The director shall have the same powers regarding
inspection of books, records and payrolls of employers as are
granted the corporation under ORS 656.758. The director may
disclose information obtained from such inspections to the
Director of the Department of Revenue to the extent the Director
of the Department of Revenue requires such information to
determine that a person complies with the revenue and tax laws of
this state and to the Director of the Employment Department to
the extent the Director of the Employment Department requires
such information to determine that a person complies with ORS
chapter 657.
(10) The director shall collect hours-worked data information
in addition to total payroll for workers engaged in various jobs
in the construction industry classifications described in the job
classification portion of the Workers' Compensation and Employers
Liability Manual and the Oregon Special Rules Section published
by the National Council on Compensation Insurance. The
information shall be collected in the form and format necessary
for the National Council on Compensation Insurance to analyze
premium equity.
SECTION 5. ORS 656.726, as amended by section 4, chapter 657,
Oregon Laws 2003, section 18, chapter 811, Oregon Laws 2003,
section 17, chapter 26, Oregon Laws 2005, and section 2a, chapter
653, Oregon Laws 2005, is amended to read:
656.726. (1) The Workers' Compensation Board in its name and
the Director of the Department of Consumer and Business Services
in the director's name as director may sue and be sued, and each
shall have a seal.
(2) The board hereby is charged with reviewing appealed orders
of Administrative Law Judges in controversies concerning a claim
arising under this chapter, exercising own motion jurisdiction
under this chapter and providing such policy advice as the
director may request, and providing such other review functions
as may be prescribed by law. To that end any of its members or
assistants authorized thereto by the members shall have power to:
(a) Hold sessions at any place within the state.
(b) Administer oaths.
(c) Issue and serve by the board's representatives, or by any
sheriff, subpoenas for the attendance of witnesses and the
production of papers, contracts, books, accounts, documents and
testimony before any hearing under ORS 654.001 to 654.295,
654.750 to 654.780 and this chapter.
(d) Generally provide for the taking of testimony and for the
recording of proceedings.
(3) The board chairperson is hereby charged with the
administration of and responsibility for the Hearings Division.
(4) The director hereby is charged with duties of
administration, regulation and enforcement of ORS 654.001 to
654.295, 654.750 to 654.780 and this chapter. To that end the
director may:
(a) Make and declare all rules and issue orders which are
reasonably required in the performance of the director's duties.
Unless otherwise specified by law, all reports, claims or other
documents shall be deemed timely provided to the director or
board if mailed by regular mail or delivered within the time
Enrolled Senate Bill 559 (SB 559-A) Page 6
required by law. Notwithstanding any other provision of this
chapter, the director may adopt rules to allow for the electronic
transmission and filing of reports, claims or other documents
required to be filed under this chapter { + and to require the
electronic transmission and filing of proof of coverage required
under ORS 656.419, 656.423 and 656.427 + }. Notwithstanding ORS
183.310 to 183.410, if a matter comes before the director that is
not addressed by rule and the director finds that adoption of a
rule to accommodate the matter would be inefficient, unreasonable
or unnecessarily burdensome to the public, the director may
resolve the matter by issuing an order, subject to review under
ORS 656.704. Such order shall not have precedential effect as to
any other situation.
(b) Hold sessions at any place within the state.
(c) Administer oaths.
(d) Issue and serve by representatives of the director, or by
any sheriff, subpoenas for the attendance of witnesses and the
production of papers, contracts, books, accounts, documents and
testimony in any inquiry, investigation, proceeding or rulemaking
hearing conducted by the director or the director's
representatives. The director may require the attendance and
testimony of employers, their officers and representatives in any
inquiry under this chapter, and the production by employers of
books, records, papers and documents without the payment or
tender of witness fees on account of such attendance.
(e) Generally provide for the taking of testimony and for the
recording of such proceedings.
(f) Provide standards for the evaluation of disabilities. The
following provisions apply to the standards:
(A) The criteria for evaluation of disabilities under ORS
656.214 (5) shall be permanent impairment due to the industrial
injury as modified by the factors of age, education and
adaptability to perform a given job.
(B) Impairment is established by a preponderance of medical
evidence based upon objective findings.
(C) When, upon reconsideration of a notice of closure pursuant
to ORS 656.268, it is found that the worker's disability is not
addressed by the standards adopted pursuant to this paragraph,
notwithstanding ORS 656.268, the director shall stay further
proceedings on the reconsideration of the claim and shall adopt
temporary rules amending the standards to accommodate the
worker's impairment.
(D) Notwithstanding any other provision of this section,
impairment is the only factor to be considered in evaluation of
the worker's disability under ORS 656.214 (5) if:
(i) The worker returns to regular work at the job held at the
time of injury;
(ii) The attending physician releases the worker to regular
work at the job held at the time of injury and the job is
available but the worker fails or refuses to return to that job;
or
(iii) The attending physician releases the worker to regular
work at the job held at the time of injury but the worker's
employment is terminated for cause unrelated to the injury.
(g) Prescribe procedural rules for and conduct hearings,
investigations and other proceedings pursuant to ORS 654.001 to
654.295, 654.750 to 654.780 and this chapter regarding all
matters other than those specifically allocated to the board or
the Hearings Division.
Enrolled Senate Bill 559 (SB 559-A) Page 7
(h) Participate fully in any proceeding before the Hearings
Division, board or Court of Appeals in which the director
determines that the proceeding involves a matter that affects or
could affect the discharge of the director's duties of
administration, regulation and enforcement of ORS 654.001 to
654.295 and 654.750 to 654.780 and this chapter.
(5) The board may make and declare all rules which are
reasonably required in the performance of its duties, including
but not limited to rules of practice and procedure in connection
with hearing and review proceedings and exercising its authority
under ORS 656.278. The board shall adopt standards governing the
format and timing of the evidence. The standards shall be
uniformly followed by all Administrative Law Judges and
practitioners. The rules may provide for informal prehearing
conferences in order to expedite claim adjudication, amicably
dispose of controversies, if possible, narrow issues and simplify
the method of proof at hearings. The rules shall specify who may
appear with parties at prehearing conferences and hearings.
(6) The director and the board chairperson may incur such
expenses as they respectively determine are reasonably necessary
to perform their authorized functions.
(7) The director, the board chairperson and the State Accident
Insurance Fund Corporation shall have the right, not subject to
review, to contract for the exchange of, or payment for, such
services between them as will reduce the overall cost of
administering this chapter.
(8) The director shall have lien and enforcement powers
regarding assessments to be paid by subject employers in the same
manner and to the same extent as is provided for lien and
enforcement of collection of premiums and assessments by the
corporation under ORS 656.552 to 656.566.
(9) The director shall have the same powers regarding
inspection of books, records and payrolls of employers as are
granted the corporation under ORS 656.758. The director may
disclose information obtained from such inspections to the
Director of the Department of Revenue to the extent the Director
of the Department of Revenue requires such information to
determine that a person complies with the revenue and tax laws of
this state and to the Director of the Employment Department to
the extent the Director of the Employment Department requires
such information to determine that a person complies with ORS
chapter 657.
(10) The director shall collect hours-worked data information
in addition to total payroll for workers engaged in various jobs
in the construction industry classifications described in the job
classification portion of the Workers' Compensation and Employers
Liability Manual and the Oregon Special Rules Section published
by the National Council on Compensation Insurance. The
information shall be collected in the form and format necessary
for the National Council on Compensation Insurance to analyze
premium equity.
SECTION 6. ORS 656.005 is amended to read:
656.005. (1) 'Average weekly wage' means the Oregon average
weekly wage in covered employment, as determined by the
Employment Department, for the last quarter of the calendar year
preceding the fiscal year in which the injury occurred.
(2) 'Beneficiary' means an injured worker, and the husband,
wife, child or dependent of a worker, who is entitled to receive
payments under this chapter. 'Beneficiary' does not include:
Enrolled Senate Bill 559 (SB 559-A) Page 8
(a) A spouse of an injured worker living in a state of
abandonment for more than one year at the time of the injury or
subsequently. A spouse who has lived separate and apart from the
worker for a period of two years and who has not during that time
received or attempted by process of law to collect funds for
support or maintenance is considered living in a state of
abandonment.
(b) A person who intentionally causes the compensable injury to
or death of an injured worker.
(3) 'Board' means the Workers' Compensation Board.
(4) 'Carrier-insured employer' means an employer who provides
workers' compensation coverage with { - a guaranty contract
insurer - } { + the State Accident Insurance Fund Corporation
or an insurer authorized under ORS chapter 731 to transact
workers' compensation insurance in this state + }.
(5) 'Child' includes a posthumous child, a child legally
adopted prior to the injury, a child toward whom the worker
stands in loco parentis, an illegitimate child and a stepchild,
if such stepchild was, at the time of the injury, a member of the
worker's family and substantially dependent upon the worker for
support. An invalid dependent child is a child, for purposes of
benefits, regardless of age, so long as the child was an invalid
at the time of the accident and thereafter remains an invalid
substantially dependent on the worker for support. For purposes
of this chapter, an invalid dependent child is considered to be a
child under 18 years of age.
(6) 'Claim' means a written request for compensation from a
subject worker or someone on the worker's behalf, or any
compensable injury of which a subject employer has notice or
knowledge.
(7)(a) A 'compensable injury' is an accidental injury, or
accidental injury to prosthetic appliances, arising out of and in
the course of employment requiring medical services or resulting
in disability or death; an injury is accidental if the result is
an accident, whether or not due to accidental means, if it is
established by medical evidence supported by objective findings,
subject to the following limitations:
(A) No injury or disease is compensable as a consequence of a
compensable injury unless the compensable injury is the major
contributing cause of the consequential condition.
(B) If an otherwise compensable injury combines at any time
with a preexisting condition to cause or prolong disability or a
need for treatment, the combined condition is compensable only
if, so long as and to the extent that the otherwise compensable
injury is the major contributing cause of the disability of the
combined condition or the major contributing cause of the need
for treatment of the combined condition.
(b) 'Compensable injury' does not include:
(A) Injury to any active participant in assaults or combats
which are not connected to the job assignment and which amount to
a deviation from customary duties;
(B) Injury incurred while engaging in or performing, or as the
result of engaging in or performing, any recreational or social
activities primarily for the worker's personal pleasure; or
(C) Injury the major contributing cause of which is
demonstrated to be by a preponderance of the evidence the injured
worker's consumption of alcoholic beverages or the unlawful
consumption of any controlled substance, unless the employer
permitted, encouraged or had actual knowledge of such
consumption.
Enrolled Senate Bill 559 (SB 559-A) Page 9
(c) A 'disabling compensable injury' is an injury which
entitles the worker to compensation for disability or death. An
injury is not disabling if no temporary benefits are due and
payable, unless there is a reasonable expectation that permanent
disability will result from the injury.
(d) A 'nondisabling compensable injury' is any injury which
requires medical services only.
(8) 'Compensation' includes all benefits, including medical
services, provided for a compensable injury to a subject worker
or the worker's beneficiaries by an insurer or self-insured
employer pursuant to this chapter.
(9) 'Department' means the Department of Consumer and Business
Services.
(10) 'Dependent' means any of the following-named relatives of
a worker whose death results from any injury: Father, mother,
grandfather, grandmother, stepfather, stepmother, grandson,
granddaughter, brother, sister, half sister, half brother, niece
or nephew, who at the time of the accident, are dependent in
whole or in part for their support upon the earnings of the
worker. Unless otherwise provided by treaty, aliens not residing
within the United States at the time of the accident other than
father, mother, husband, wife or children are not included within
the term ' dependent. '
(11) 'Director' means the Director of the Department of
Consumer and Business Services.
(12)(a) 'Doctor' or 'physician' means a person duly licensed to
practice one or more of the healing arts in any country or in any
state, territory or possession of the United States within the
limits of the license of the licentiate.
(b) Except as otherwise provided for workers subject to a
managed care contract, 'attending physician' means a doctor or
physician who is primarily responsible for the treatment of a
worker's compensable injury and who is:
(A) A medical doctor or doctor of osteopathy licensed under ORS
677.100 to 677.228 by the Board of Medical Examiners for the
State of Oregon or an oral and maxillofacial surgeon licensed by
the Oregon Board of Dentistry or a similarly licensed doctor in
any country or in any state, territory or possession of the
United States; or
(B) For a period of 30 days from the date of first visit on the
initial claim or for 12 visits, whichever first occurs, a doctor
or physician licensed by the State Board of Chiropractic
Examiners for the State of Oregon or a similarly licensed doctor
or physician in any country or in any state, territory or
possession of the United States.
(c) 'Consulting physician' means a doctor or physician who
examines a worker or the worker's medical record to advise the
attending physician or nurse practitioner authorized to provide
compensable medical services under ORS 656.245 regarding
treatment of a worker's compensable injury.
(13)(a) 'Employer' means any person, including receiver,
administrator, executor or trustee, and the state, state
agencies, counties, municipal corporations, school districts and
other public corporations or political subdivisions, who
contracts to pay a remuneration for and secures the right to
direct and control the services of any person.
(b) Notwithstanding paragraph (a) of this subsection, for
purposes of this chapter, the client of a temporary service
provider is not the employer of temporary workers provided by the
temporary service provider.
Enrolled Senate Bill 559 (SB 559-A) Page 10
(c) As used in paragraph (b) of this subsection, 'temporary
service provider' has the meaning for that term provided in ORS
656.850.
(14) { - ' Guaranty contract insurer' and - } 'Insurer'
{ - mean - } { + means + } the State Accident Insurance Fund
Corporation or an insurer authorized under ORS chapter 731 to
transact workers' compensation insurance in this state or an
assigned claims agent selected by the director under ORS 656.054.
(15) 'Consumer and Business Services Fund' means the fund
created by ORS 705.145.
(16) 'Invalid' means one who is physically or mentally
incapacitated from earning a livelihood.
(17) 'Medically stationary' means that no further material
improvement would reasonably be expected from medical treatment,
or the passage of time.
(18) 'Noncomplying employer' means a subject employer who has
failed to comply with ORS 656.017.
(19) 'Objective findings' in support of medical evidence are
verifiable indications of injury or disease that may include, but
are not limited to, range of motion, atrophy, muscle strength and
palpable muscle spasm. 'Objective findings' does not include
physical findings or subjective responses to physical
examinations that are not reproducible, measurable or observable.
(20) 'Palliative care' means medical service rendered to reduce
or moderate temporarily the intensity of an otherwise stable
medical condition, but does not include those medical services
rendered to diagnose, heal or permanently alleviate or eliminate
a medical condition.
(21) 'Party' means a claimant for compensation, the employer of
the injured worker at the time of injury and the insurer, if any,
of such employer.
(22) 'Payroll' means a record of wages payable to workers for
their services and includes commissions, value of exchange labor
and the reasonable value of board, rent, housing, lodging or
similar advantage received from the employer. However, 'payroll '
does not include overtime pay, vacation pay, bonus pay, tips,
amounts payable under profit-sharing agreements or bonus payments
to reward workers for safe working practices. Bonus pay is
limited to payments which are not anticipated under the contract
of employment and which are paid at the sole discretion of the
employer. The exclusion from payroll of bonus payments to reward
workers for safe working practices is only for the purpose of
calculations based on payroll to determine premium for workers'
compensation insurance, and does not affect any other calculation
or determination based on payroll for the purposes of this
chapter.
(23) 'Person' includes partnership, joint venture, association,
limited liability company and corporation.
(24)(a) 'Preexisting condition' means, for all industrial
injury claims, any injury, disease, congenital abnormality,
personality disorder or similar condition that contributes to
disability or need for treatment, provided that:
(A) Except for claims in which a preexisting condition is
arthritis or an arthritic condition, the worker has been
diagnosed with such condition, or has obtained medical services
for the symptoms of the condition regardless of diagnosis; and
(B)(i) In claims for an initial injury or omitted condition,
the diagnosis or treatment precedes the initial injury;
(ii) In claims for a new medical condition, the diagnosis or
treatment precedes the onset of the new medical condition; or
Enrolled Senate Bill 559 (SB 559-A) Page 11
(iii) In claims for a worsening pursuant to ORS 656.273 or
656.278, the diagnosis or treatment precedes the onset of the
worsened condition.
(b) 'Preexisting condition' means, for all occupational disease
claims, any injury, disease, congenital abnormality, personality
disorder or similar condition that contributes to disability or
need for treatment and that precedes the onset of the claimed
occupational disease, or precedes a claim for worsening in such
claims pursuant to ORS 656.273 or 656.278.
(c) For the purposes of industrial injury claims, a condition
does not contribute to disability or need for treatment if the
condition merely renders the worker more susceptible to the
injury.
(25) 'Self-insured employer' means an employer or group of
employers certified under ORS 656.430 as meeting the
qualifications set out by ORS 656.407.
(26) 'State Accident Insurance Fund Corporation' and '
corporation' mean the State Accident Insurance Fund Corporation
created under ORS 656.752.
(27) 'Subject employer' means an employer who is subject to
this chapter as provided by ORS 656.023.
(28) 'Subject worker' means a worker who is subject to this
chapter as provided by ORS 656.027.
(29) 'Wages' means the money rate at which the service rendered
is recompensed under the contract of hiring in force at the time
of the accident, including reasonable value of board, rent,
housing, lodging or similar advantage received from the employer,
and includes the amount of tips required to be reported by the
employer pursuant to section 6053 of the Internal Revenue Code of
1954, as amended, and the regulations promulgated pursuant
thereto, or the amount of actual tips reported, whichever amount
is greater. The State Accident Insurance Fund Corporation may
establish assumed minimum and maximum wages, in conformity with
recognized insurance principles, at which any worker shall be
carried upon the payroll of the employer for the purpose of
determining the premium of the employer.
(30) 'Worker' means any person, including a minor whether
lawfully or unlawfully employed, who engages to furnish services
for a remuneration, subject to the direction and control of an
employer and includes salaried, elected and appointed officials
of the state, state agencies, counties, cities, school districts
and other public corporations, but does not include any person
whose services are performed as an inmate or ward of a state
institution or as part of the eligibility requirements for a
general or public assistance grant. For the purpose of
determining entitlement to temporary disability benefits or
permanent total disability benefits under this chapter, 'worker'
does not include a person who has withdrawn from the workforce
during the period for which such benefits are sought.
(31) 'Independent contractor' has the meaning for that term
provided in ORS 670.600.
SECTION 7. ORS 656.005, as amended by section 2, chapter 811,
Oregon Laws 2003, is amended to read:
656.005. (1) 'Average weekly wage' means the Oregon average
weekly wage in covered employment, as determined by the
Employment Department, for the last quarter of the calendar year
preceding the fiscal year in which the injury occurred.
(2) 'Beneficiary' means an injured worker, and the husband,
wife, child or dependent of a worker, who is entitled to receive
payments under this chapter. 'Beneficiary' does not include:
Enrolled Senate Bill 559 (SB 559-A) Page 12
(a) A spouse of an injured worker living in a state of
abandonment for more than one year at the time of the injury or
subsequently. A spouse who has lived separate and apart from the
worker for a period of two years and who has not during that time
received or attempted by process of law to collect funds for
support or maintenance is considered living in a state of
abandonment.
(b) A person who intentionally causes the compensable injury to
or death of an injured worker.
(3) 'Board' means the Workers' Compensation Board.
(4) 'Carrier-insured employer' means an employer who provides
workers' compensation coverage with { - a guaranty contract
insurer - } { + the State Accident Insurance Fund Corporation
or an insurer authorized under ORS chapter 731 to transact
workers' compensation insurance in this state + }.
(5) 'Child' includes a posthumous child, a child legally
adopted prior to the injury, a child toward whom the worker
stands in loco parentis, an illegitimate child and a stepchild,
if such stepchild was, at the time of the injury, a member of the
worker's family and substantially dependent upon the worker for
support. An invalid dependent child is a child, for purposes of
benefits, regardless of age, so long as the child was an invalid
at the time of the accident and thereafter remains an invalid
substantially dependent on the worker for support. For purposes
of this chapter, an invalid dependent child is considered to be a
child under 18 years of age.
(6) 'Claim' means a written request for compensation from a
subject worker or someone on the worker's behalf, or any
compensable injury of which a subject employer has notice or
knowledge.
(7)(a) A 'compensable injury' is an accidental injury, or
accidental injury to prosthetic appliances, arising out of and in
the course of employment requiring medical services or resulting
in disability or death; an injury is accidental if the result is
an accident, whether or not due to accidental means, if it is
established by medical evidence supported by objective findings,
subject to the following limitations:
(A) No injury or disease is compensable as a consequence of a
compensable injury unless the compensable injury is the major
contributing cause of the consequential condition.
(B) If an otherwise compensable injury combines at any time
with a preexisting condition to cause or prolong disability or a
need for treatment, the combined condition is compensable only
if, so long as and to the extent that the otherwise compensable
injury is the major contributing cause of the disability of the
combined condition or the major contributing cause of the need
for treatment of the combined condition.
(b) 'Compensable injury' does not include:
(A) Injury to any active participant in assaults or combats
which are not connected to the job assignment and which amount to
a deviation from customary duties;
(B) Injury incurred while engaging in or performing, or as the
result of engaging in or performing, any recreational or social
activities primarily for the worker's personal pleasure; or
(C) Injury the major contributing cause of which is
demonstrated to be by a preponderance of the evidence the injured
worker's consumption of alcoholic beverages or the unlawful
consumption of any controlled substance, unless the employer
permitted, encouraged or had actual knowledge of such
consumption.
Enrolled Senate Bill 559 (SB 559-A) Page 13
(c) A 'disabling compensable injury' is an injury which
entitles the worker to compensation for disability or death. An
injury is not disabling if no temporary benefits are due and
payable, unless there is a reasonable expectation that permanent
disability will result from the injury.
(d) A 'nondisabling compensable injury' is any injury which
requires medical services only.
(8) 'Compensation' includes all benefits, including medical
services, provided for a compensable injury to a subject worker
or the worker's beneficiaries by an insurer or self-insured
employer pursuant to this chapter.
(9) 'Department' means the Department of Consumer and Business
Services.
(10) 'Dependent' means any of the following-named relatives of
a worker whose death results from any injury: Father, mother,
grandfather, grandmother, stepfather, stepmother, grandson,
granddaughter, brother, sister, half sister, half brother, niece
or nephew, who at the time of the accident, are dependent in
whole or in part for their support upon the earnings of the
worker. Unless otherwise provided by treaty, aliens not residing
within the United States at the time of the accident other than
father, mother, husband, wife or children are not included within
the term ' dependent. '
(11) 'Director' means the Director of the Department of
Consumer and Business Services.
(12)(a) 'Doctor' or 'physician' means a person duly licensed to
practice one or more of the healing arts in any country or in any
state, territory or possession of the United States within the
limits of the license of the licentiate.
(b) Except as otherwise provided for workers subject to a
managed care contract, 'attending physician' means a doctor or
physician who is primarily responsible for the treatment of a
worker's compensable injury and who is:
(A) A medical doctor or doctor of osteopathy licensed under ORS
677.100 to 677.228 by the Board of Medical Examiners for the
State of Oregon or an oral and maxillofacial surgeon licensed by
the Oregon Board of Dentistry or a similarly licensed doctor in
any country or in any state, territory or possession of the
United States; or
(B) For a period of 30 days from the date of first visit on the
initial claim or for 12 visits, whichever first occurs, a doctor
or physician licensed by the State Board of Chiropractic
Examiners for the State of Oregon or a similarly licensed doctor
or physician in any country or in any state, territory or
possession of the United States.
(c) 'Consulting physician' means a doctor or physician who
examines a worker or the worker's medical record to advise the
attending physician regarding treatment of a worker's compensable
injury.
(13)(a) 'Employer' means any person, including receiver,
administrator, executor or trustee, and the state, state
agencies, counties, municipal corporations, school districts and
other public corporations or political subdivisions, who
contracts to pay a remuneration for and secures the right to
direct and control the services of any person.
(b) Notwithstanding paragraph (a) of this subsection, for
purposes of this chapter, the client of a temporary service
provider is not the employer of temporary workers provided by the
temporary service provider.
Enrolled Senate Bill 559 (SB 559-A) Page 14
(c) As used in paragraph (b) of this subsection, 'temporary
service provider' has the meaning for that term provided in ORS
656.850.
(14) { - ' Guaranty contract insurer' and - } 'Insurer'
{ - mean - } { + means + } the State Accident Insurance Fund
Corporation or an insurer authorized under ORS chapter 731 to
transact workers' compensation insurance in this state or an
assigned claims agent selected by the director under ORS 656.054.
(15) 'Consumer and Business Services Fund' means the fund
created by ORS 705.145.
(16) 'Invalid' means one who is physically or mentally
incapacitated from earning a livelihood.
(17) 'Medically stationary' means that no further material
improvement would reasonably be expected from medical treatment,
or the passage of time.
(18) 'Noncomplying employer' means a subject employer who has
failed to comply with ORS 656.017.
(19) 'Objective findings' in support of medical evidence are
verifiable indications of injury or disease that may include, but
are not limited to, range of motion, atrophy, muscle strength and
palpable muscle spasm. 'Objective findings' does not include
physical findings or subjective responses to physical
examinations that are not reproducible, measurable or observable.
(20) 'Palliative care' means medical service rendered to reduce
or moderate temporarily the intensity of an otherwise stable
medical condition, but does not include those medical services
rendered to diagnose, heal or permanently alleviate or eliminate
a medical condition.
(21) 'Party' means a claimant for compensation, the employer of
the injured worker at the time of injury and the insurer, if any,
of such employer.
(22) 'Payroll' means a record of wages payable to workers for
their services and includes commissions, value of exchange labor
and the reasonable value of board, rent, housing, lodging or
similar advantage received from the employer. However, 'payroll '
does not include overtime pay, vacation pay, bonus pay, tips,
amounts payable under profit-sharing agreements or bonus payments
to reward workers for safe working practices. Bonus pay is
limited to payments which are not anticipated under the contract
of employment and which are paid at the sole discretion of the
employer. The exclusion from payroll of bonus payments to reward
workers for safe working practices is only for the purpose of
calculations based on payroll to determine premium for workers'
compensation insurance, and does not affect any other calculation
or determination based on payroll for the purposes of this
chapter.
(23) 'Person' includes partnership, joint venture, association,
limited liability company and corporation.
(24)(a) 'Preexisting condition' means, for all industrial
injury claims, any injury, disease, congenital abnormality,
personality disorder or similar condition that contributes to
disability or need for treatment, provided that:
(A) Except for claims in which a preexisting condition is
arthritis or an arthritic condition, the worker has been
diagnosed with such condition, or has obtained medical services
for the symptoms of the condition regardless of diagnosis; and
(B)(i) In claims for an initial injury or omitted condition,
the diagnosis or treatment precedes the initial injury;
(ii) In claims for a new medical condition, the diagnosis or
treatment precedes the onset of the new medical condition; or
Enrolled Senate Bill 559 (SB 559-A) Page 15
(iii) In claims for a worsening pursuant to ORS 656.273 or
656.278, the diagnosis or treatment precedes the onset of the
worsened condition.
(b) 'Preexisting condition' means, for all occupational disease
claims, any injury, disease, congenital abnormality, personality
disorder or similar condition that contributes to disability or
need for treatment and that precedes the onset of the claimed
occupational disease, or precedes a claim for worsening in such
claims pursuant to ORS 656.273 or 656.278.
(c) For the purposes of industrial injury claims, a condition
does not contribute to disability or need for treatment if the
condition merely renders the worker more susceptible to the
injury.
(25) 'Self-insured employer' means an employer or group of
employers certified under ORS 656.430 as meeting the
qualifications set out by ORS 656.407.
(26) 'State Accident Insurance Fund Corporation' and '
corporation' mean the State Accident Insurance Fund Corporation
created under ORS 656.752.
(27) 'Subject employer' means an employer who is subject to
this chapter as provided by ORS 656.023.
(28) 'Subject worker' means a worker who is subject to this
chapter as provided by ORS 656.027.
(29) 'Wages' means the money rate at which the service rendered
is recompensed under the contract of hiring in force at the time
of the accident, including reasonable value of board, rent,
housing, lodging or similar advantage received from the employer,
and includes the amount of tips required to be reported by the
employer pursuant to section 6053 of the Internal Revenue Code of
1954, as amended, and the regulations promulgated pursuant
thereto, or the amount of actual tips reported, whichever amount
is greater. The State Accident Insurance Fund Corporation may
establish assumed minimum and maximum wages, in conformity with
recognized insurance principles, at which any worker shall be
carried upon the payroll of the employer for the purpose of
determining the premium of the employer.
(30) 'Worker' means any person, including a minor whether
lawfully or unlawfully employed, who engages to furnish services
for a remuneration, subject to the direction and control of an
employer and includes salaried, elected and appointed officials
of the state, state agencies, counties, cities, school districts
and other public corporations, but does not include any person
whose services are performed as an inmate or ward of a state
institution or as part of the eligibility requirements for a
general or public assistance grant. For the purpose of
determining entitlement to temporary disability benefits or
permanent total disability benefits under this chapter, 'worker'
does not include a person who has withdrawn from the workforce
during the period for which such benefits are sought.
(31) 'Independent contractor' has the meaning for that term
provided in ORS 670.600.
SECTION 8. ORS 656.039 is amended to read:
656.039. (1) An employer of one or more persons defined as
nonsubject workers or not defined as subject workers may elect to
make them subject workers. If the employer is or becomes a
carrier-insured employer, the election shall be made by filing
written notice thereof with the insurer with a copy to the
Director of the Department of Consumer and Business Services. The
effective date of coverage is governed by ORS 656.419 (3). If the
employer is or becomes a self-insured employer, the election
Enrolled Senate Bill 559 (SB 559-A) Page 16
shall be made by filing written notice thereof with the director,
the effective date of coverage to be the date specified in the
notice.
(2) Any election under subsection (1) of this section may be
canceled by written notice thereof to the insurer or, in the case
of a self-insured employer, by notice thereof to the director.
The cancellation is effective at 12 midnight ending the day the
notice is received by the insurer or the director, unless a later
date is specified in the notice. The insurer shall, within 10
days after receipt of a notice of cancellation under this
section, send a copy of the notice to the director.
(3) When necessary the insurer or the director shall fix
assumed minimum or maximum wages for persons made subject workers
under this section.
(4) Notwithstanding any other provision of this section, a
person or employer not subject to this chapter who elects to
become covered may apply to { - a guaranty contract - }
{ + an + } insurer for coverage. An insurer other than the State
Accident Insurance Fund Corporation may provide such coverage.
However, the State Accident Insurance Fund Corporation shall
accept any written notice filed and provide coverage as provided
in this section if all subject workers of the employers will be
insured with the State Accident Insurance Fund Corporation and
the coverage of those subject workers is not considered by the
State Accident Insurance Fund Corporation to be a risk properly
assignable to the assigned risk pool.
SECTION 9. ORS 656.128 is amended to read:
656.128. (1) Any person who is a sole proprietor, or a member,
including a member who is a manager, of a limited liability
company, or a member of a partnership, or an independent
contractor pursuant to ORS 670.600, may make written application
to an insurer to become entitled as a subject worker to
compensation benefits. Thereupon, the insurer may accept such
application and fix a classification and an assumed monthly wage
at which such person shall be carried on the payroll as a worker
for purposes of computations under this chapter.
(2) When the application is accepted, such person thereupon is
subject to the provisions and entitled to the benefits of this
chapter. The person shall promptly notify the insurer whenever
the status of the person as an employer of subject workers
changes. Any subject worker employed by such a person after the
effective date of the election of the person shall, upon being
employed, be considered covered automatically by the same
{ - guaranty contract - } { + workers' compensation insurance
policy + } that covers such person.
(3) No claim shall be allowed or paid under this section,
except upon corroborative evidence in addition to the evidence of
the claimant.
(4) Any person subject to this chapter as a worker as provided
in this section may cancel such election by giving written notice
to the insurer. The cancellation shall become effective at 12
midnight ending the day of filing the notice with the insurer.
SECTION 10. ORS 656.210 is amended to read:
656.210. (1) When the total disability is only temporary, the
worker shall receive during the period of that total disability
compensation equal to 66-2/3 percent of wages, but not more than
133 percent of the average weekly wage nor less than the amount
of 90 percent of wages a week or the amount of $50 a week,
whichever amount is less. Notwithstanding the limitation imposed
by this subsection, an injured worker who is not otherwise
Enrolled Senate Bill 559 (SB 559-A) Page 17
eligible to receive an increase in benefits for the fiscal year
in which compensation is paid shall have the benefits increased
each fiscal year by the percentage which the applicable average
weekly wage has increased since the previous fiscal year.
(2)(a) For the purpose of this section, the weekly wage of
workers shall be ascertained:
(A) For workers employed in one job at the time of injury, by
multiplying the daily wage the worker was receiving by the number
of days per week that the worker was regularly employed; or
(B) For workers employed in more than one job at the time of
injury, by adding all earnings the worker was receiving from all
subject employment.
(b) Notwithstanding paragraph (a)(B) of this subsection, the
weekly wage calculated under paragraph (a)(A) of this subsection
shall be used for workers employed in more than one job at the
time of injury unless, within 30 days of receipt of the initial
claim, the insurer, self-insured employer or assigned claims
agent for a noncomplying employer receives notice that the worker
was employed in more than one job with a subject employer at the
time of injury and receives verifiable documentation of wages
from such additional employment.
(c) Notwithstanding ORS 656.005 (7)(c), an injury to a worker
employed in more than one job at the time of injury is not
disabling if no temporary disability benefits are payable for
time lost from the job at injury. Claim costs incurred as a
result of supplemental temporary disability benefits paid as
provided in subsection (5) of this section may not be included in
any data used for ratemaking or individual employer rating or
dividend calculations by { - a guaranty contract - } { +
an + } insurer, a rating organization licensed pursuant to ORS
chapter 737, the State Accident Insurance Fund Corporation or the
Department of Consumer and Business Services if the injured
worker is not eligible for permanent disability benefits or
temporary disability benefits for time lost from the job at
injury.
(d) For the purpose of this section:
(A) The benefits of a worker who incurs an injury shall be
based on the wage of the worker at the time of injury.
(B) The benefits of a worker who incurs an occupational disease
shall be based on the wage of the worker at the time there is
medical verification that the worker is unable to work because of
the disability caused by the occupational disease. If the worker
is not working at the time that there is medical verification
that the worker is unable to work because of the disability
caused by the occupational disease, the benefits shall be based
on the wage of the worker at the worker's last regular
employment.
(e) As used in this subsection, 'regularly employed' means
actual employment or availability for such employment. For
workers not regularly employed and for workers with no
remuneration or whose remuneration is not based solely upon daily
or weekly wages, the Director of the Department of Consumer and
Business Services, by rule, may prescribe methods for
establishing the worker's weekly wage.
(3) No disability payment is recoverable for temporary total or
partial disability suffered during the first three calendar days
after the worker leaves work or loses wages as a result of the
compensable injury unless the worker is totally disabled after
the injury and the total disability continues for a period of 14
consecutive days or unless the worker is admitted as an inpatient
Enrolled Senate Bill 559 (SB 559-A) Page 18
to a hospital within 14 days of the first onset of total
disability. If the worker leaves work or loses wages on the day
of the injury due to the injury, that day shall be considered the
first day of the three-day period.
(4) When an injured worker with an accepted disabling
compensable injury is required to leave work for a period of four
hours or more to receive medical consultation, examination or
treatment with regard to the compensable injury, the worker shall
receive temporary disability benefits calculated pursuant to ORS
656.212 for the period during which the worker is absent, until
such time as the worker is determined to be medically stationary.
However, benefits under this subsection are not payable if wages
are paid for the period of absence by the employer.
(5)(a) The insurer of the employer at injury or the
self-insured employer at injury, may elect to be responsible for
payment of supplemental temporary disability benefits to a worker
employed in more than one job at the time of injury. In
accordance with rules adopted by the director, if the worker's
weekly wage is determined under subsection (2)(a)(B) of this
section, the insurer or self-insured employer shall be reimbursed
from the Workers' Benefit Fund for the amount of temporary
disability benefits paid that exceeds the amount payable pursuant
to subsection (2)(a)(A) of this section had the worker been
employed in only one job at the time of injury. Such
reimbursement shall include an administrative fee payable to the
insurer or self-insured employer pursuant to rules adopted by the
director.
(b) If the insurer or self-insured employer elects not to pay
the supplemental temporary disability benefits for a worker
employed in more than one job at the time of injury, the director
shall either administer and pay the supplemental benefits
directly or shall assign responsibility to administer and process
the payment to a paying agent selected by the director.
SECTION 11. ORS 656.268 is amended to read:
656.268. (1) One purpose of this chapter is to restore the
injured worker as soon as possible and as near as possible to a
condition of self support and maintenance as an able-bodied
worker. The insurer or self-insured employer shall close the
worker's claim, as prescribed by the Director of the Department
of Consumer and Business Services, and determine the extent of
the worker's permanent disability, provided the worker is not
enrolled and actively engaged in training according to rules
adopted by the director pursuant to ORS 656.340 and 656.726,
when:
(a) The worker has become medically stationary and there is
sufficient information to determine permanent disability;
(b) The accepted injury is no longer the major contributing
cause of the worker's combined or consequential condition or
conditions pursuant to ORS 656.005 (7). When the claim is closed
because the accepted injury is no longer the major contributing
cause of the worker's combined or consequential condition or
conditions, and there is sufficient information to determine
permanent disability, the likely permanent disability that would
have been due to the current accepted condition shall be
estimated;
(c) Without the approval of the attending physician or nurse
practitioner authorized to provide compensable medical services
under ORS 656.245, the worker fails to seek medical treatment for
a period of 30 days or the worker fails to attend a closing
examination, unless the worker affirmatively establishes that
Enrolled Senate Bill 559 (SB 559-A) Page 19
such failure is attributable to reasons beyond the worker's
control; or
(d) An insurer or self-insured employer finds that a worker who
has been receiving permanent total disability benefits has
materially improved and is capable of regularly performing work
at a gainful and suitable occupation.
(2) If the worker is enrolled and actively engaged in training
according to rules adopted pursuant to ORS 656.340 and 656.726,
the temporary disability compensation shall be proportionately
reduced by any sums earned during the training.
(3) A copy of all medical reports and reports of vocational
rehabilitation agencies or counselors shall be furnished to the
worker, if requested by the worker.
(4) Temporary total disability benefits shall continue until
whichever of the following events first occurs:
(a) The worker returns to regular or modified employment;
(b) The attending physician or nurse practitioner who has
authorized temporary disability benefits for the worker under ORS
656.245 advises the worker and documents in writing that the
worker is released to return to regular employment;
(c) The attending physician or nurse practitioner who has
authorized temporary disability benefits for the worker under ORS
656.245 advises the worker and documents in writing that the
worker is released to return to modified employment, such
employment is offered in writing to the worker and the worker
fails to begin such employment. However, an offer of modified
employment may be refused by the worker without the termination
of temporary total disability benefits if the offer:
(A) Requires a commute that is beyond the physical capacity of
the worker according to the worker's attending physician or the
nurse practitioner who may authorize temporary disability under
ORS 656.245;
(B) Is at a work site more than 50 miles one way from where the
worker was injured unless the site is less than 50 miles from the
worker's residence or the intent of the parties at the time of
hire or as established by the pattern of employment prior to the
injury was that the employer had multiple or mobile work sites
and the worker could be assigned to any such site;
(C) Is not with the employer at injury;
(D) Is not at a work site of the employer at injury;
(E) Is not consistent with the existing written shift change
policy or is not consistent with common practice of the employer
at injury or aggravation; or
(F) Is not consistent with an existing shift change provision
of an applicable collective bargaining agreement; or
(d) Any other event that causes temporary disability benefits
to be lawfully suspended, withheld or terminated under ORS
656.262 (4) or other provisions of this chapter.
(5)(a) Findings by the insurer or self-insured employer
regarding the extent of the worker's disability in closure of the
claim shall be pursuant to the standards prescribed by the
director. The insurer or self-insured employer shall issue a
notice of closure of such a claim to the worker, to the worker's
attorney if the worker is represented, and to the director. The
notice must inform:
(A) The parties, in boldfaced type, of the proper manner in
which to proceed if they are dissatisfied with the terms of the
notice;
(B) The worker of the amount of any further compensation,
including permanent disability compensation to be awarded; of the
Enrolled Senate Bill 559 (SB 559-A) Page 20
duration of temporary total or temporary partial disability
compensation; of the right of the worker to request
reconsideration by the director under this section within 60 days
of the date of the notice of claim closure; of the right of the
insurer or self-insured employer to request reconsideration by
the director under this section within seven days of the date of
the notice of claim closure; of the aggravation rights; and of
such other information as the director may require; and
(C) Any beneficiaries of death benefits to which they may be
entitled pursuant to ORS 656.204 and 656.208.
(b) If the insurer or self-insured employer has not issued a
notice of closure, the worker may request closure. Within 10 days
of receipt of a written request from the worker, the insurer or
self-insured employer shall issue a notice of closure if the
requirements of this section have been met or a notice of refusal
to close if the requirements of this section have not been met. A
notice of refusal to close shall advise the worker of the
decision not to close; of the right of the worker to request a
hearing pursuant to ORS 656.283 within 60 days of the date of the
notice of refusal to close the claim; of the right to be
represented by an attorney; and of such other information as the
director may require.
(c) If a worker, insurer or self-insured employer objects to
the notice of closure, the objecting party first must request
reconsideration by the director under this section. A worker's
request for reconsideration must be made within 60 days of the
date of the notice of closure. A request for reconsideration by
an insurer or self-insured employer may be based only on
disagreement with the findings used to rate impairment and must
be made within seven days of the date of the notice of closure.
(d) If an insurer or self-insured employer has closed a claim
or refused to close a claim pursuant to this section, if the
correctness of that notice of closure or refusal to close is at
issue in a hearing on the claim and if a finding is made at the
hearing that the notice of closure or refusal to close was not
reasonable, a penalty shall be assessed against the insurer or
self-insured employer and paid to the worker in an amount equal
to 25 percent of all compensation determined to be then due the
claimant.
(e) If, upon reconsideration of a claim closed by an insurer or
self-insured employer, the director orders an increase by 25
percent or more of the amount of compensation to be paid to the
worker for permanent disability and the worker is found upon
reconsideration to be at least 20 percent permanently disabled, a
penalty shall be assessed against the insurer or self-insured
employer and paid to the worker in an amount equal to 25 percent
of all compensation determined to be then due the claimant. If
the increase in compensation results from information that the
insurer or self-insured employer demonstrates the insurer or
self-insured employer could not reasonably have known at the time
of claim closure, from new information obtained through a medical
arbiter examination or from the adoption of a temporary emergency
rule, the penalty shall not be assessed.
(6)(a) Notwithstanding any other provision of law, only one
reconsideration proceeding may be held on each notice of closure.
At the reconsideration proceeding:
(A) A deposition arranged by the worker, limited to the
testimony and cross-examination of the worker about the worker's
condition at the time of claim closure, shall become part of the
reconsideration record. The deposition must be conducted subject
Enrolled Senate Bill 559 (SB 559-A) Page 21
to the opportunity for cross-examination by the insurer or
self-insured employer and in accordance with rules adopted by the
director. The cost of the court reporter and one original of the
transcript of the deposition for the Department of Consumer and
Business Services and one copy of the transcript of the
deposition for each party shall be paid by the insurer or
self-insured employer. The reconsideration proceeding may not be
postponed to receive a deposition taken under this subparagraph.
A deposition taken in accordance with this subparagraph may be
received as evidence at a hearing even if the deposition is not
prepared in time for use in the reconsideration proceeding.
(B) Pursuant to rules adopted by the director, the worker or
the insurer or self-insured employer may correct information in
the record that is erroneous and may submit any medical evidence
that should have been but was not submitted by the attending
physician or nurse practitioner authorized to provide compensable
medical services under ORS 656.245 at the time of claim closure.
(C) If the director determines that a claim was not closed in
accordance with subsection (1) of this section, the director may
rescind the closure.
(b) If necessary, the director may require additional medical
or other information with respect to the claims and may postpone
the reconsideration for not more than 60 additional calendar
days.
(c) In any reconsideration proceeding under this section in
which the worker was represented by an attorney, the director
shall order the insurer or self-insured employer to pay to the
attorney, out of the additional compensation awarded, an amount
equal to 10 percent of any additional compensation awarded to the
worker.
(d) The reconsideration proceeding shall be completed within 18
working days from the date the reconsideration proceeding begins,
and shall be performed by a special evaluation appellate unit
within the department. The deadline of 18 working days may be
postponed by an additional 60 calendar days if within the 18
working days the department mails notice of review by a medical
arbiter. If an order on reconsideration has not been mailed on or
before 18 working days from the date the reconsideration
proceeding begins, or within 18 working days plus the additional
60 calendar days where a notice for medical arbiter review was
timely mailed or the director postponed the reconsideration
pursuant to paragraph (b) of this subsection, or within such
additional time as provided in subsection (7) of this section
when reconsideration is postponed further because the worker has
failed to cooperate in the medical arbiter examination,
reconsideration shall be deemed denied and any further
proceedings shall occur as though an order on reconsideration
affirming the notice of closure was mailed on the date the order
was due to issue.
(e) The period for completing the reconsideration proceeding
described in paragraph (d) of this subsection begins upon receipt
by the director of a worker's request for reconsideration
pursuant to subsection (5)(c) of this section. If the insurer or
self-insured employer requests reconsideration, the period for
reconsideration begins upon the earlier of the date of the
request for reconsideration by the worker, the date of receipt of
a waiver from the worker of the right to request reconsideration
or the date of expiration of the right of the worker to request
reconsideration. If a party elects not to file a separate request
for reconsideration, the party does not waive the right to fully
Enrolled Senate Bill 559 (SB 559-A) Page 22
participate in the reconsideration proceeding, including the
right to proceed with the reconsideration if the initiating party
withdraws the request for reconsideration.
(f) Any medical arbiter report may be received as evidence at a
hearing even if the report is not prepared in time for use in the
reconsideration proceeding.
(g) If any party objects to the reconsideration order, the
party may request a hearing under ORS 656.283 within 30 days from
the date of the reconsideration order.
(7)(a) If the basis for objection to a notice of closure issued
under this section is disagreement with the impairment used in
rating of the worker's disability, the director shall refer the
claim to a medical arbiter appointed by the director.
(b) If neither party requests a medical arbiter and the
director determines that insufficient medical information is
available to determine disability, the director may refer the
claim to a medical arbiter appointed by the director.
(c) At the request of either of the parties, a panel of three
medical arbiters shall be appointed.
(d) The arbiter, or panel of medical arbiters, shall be chosen
from among a list of physicians qualified to be attending
physicians referred to in ORS 656.005 (12)(b)(A) who were
selected by the director in consultation with the Board of
Medical Examiners for the State of Oregon and the committee
referred to in ORS 656.790.
(e)(A) The medical arbiter or panel of medical arbiters may
examine the worker and perform such tests as may be reasonable
and necessary to establish the worker's impairment.
(B) If the director determines that the worker failed to attend
the examination without good cause or failed to cooperate with
the medical arbiter, or panel of medical arbiters, the director
shall postpone the reconsideration proceedings for up to 60 days
from the date of the determination that the worker failed to
attend or cooperate, and shall suspend all disability benefits
resulting from this or any prior opening of the claim until such
time as the worker attends and cooperates with the examination or
the request for reconsideration is withdrawn. Any additional
evidence regarding good cause must be submitted prior to the
conclusion of the 60-day postponement period.
(C) At the conclusion of the 60-day postponement period, if the
worker has not attended and cooperated with a medical arbiter
examination or established good cause, there shall be no further
opportunity for the worker to attend a medical arbiter
examination for this claim closure. The reconsideration record
shall be closed, and the director shall issue an order on
reconsideration based upon the existing record.
(D) All disability benefits suspended pursuant to this
subsection, including all disability benefits awarded in the
order on reconsideration, or by an Administrative Law Judge, the
Workers' Compensation Board or upon court review, shall not be
due and payable to the worker.
(f) The costs of examination and review by the medical arbiter
or panel of medical arbiters shall be paid by the insurer or
self-insured employer.
(g) The findings of the medical arbiter or panel of medical
arbiters shall be submitted to the director for reconsideration
of the notice of closure.
(h) After reconsideration, no subsequent medical evidence of
the worker's impairment is admissible before the director, the
Enrolled Senate Bill 559 (SB 559-A) Page 23
Workers' Compensation Board or the courts for purposes of making
findings of impairment on the claim closure.
(i)(A) When the basis for objection to a notice of closure
issued under this section is a disagreement with the impairment
used in rating the worker's disability, and the director
determines that the worker is not medically stationary at the
time of the reconsideration or that the closure was not made
pursuant to this section, the director is not required to appoint
a medical arbiter prior to the completion of the reconsideration
proceeding.
(B) If the worker's condition has substantially changed since
the notice of closure, upon the consent of all the parties to the
claim, the director shall postpone the proceeding until the
worker's condition is appropriate for claim closure under
subsection (1) of this section.
(8) No hearing shall be held on any issue that was not raised
and preserved before the director at reconsideration. However,
issues arising out of the reconsideration order may be addressed
and resolved at hearing.
(9) If, after the notice of closure issued pursuant to this
section, the worker becomes enrolled and actively engaged in
training according to rules adopted pursuant to ORS 656.340 and
656.726, any permanent disability payments due for work
disability under the closure shall be suspended, and the worker
shall receive temporary disability compensation and any permanent
disability payments due for impairment while the worker is
enrolled and actively engaged in the training. When the worker
ceases to be enrolled and actively engaged in the training, the
insurer or self-insured employer shall again close the claim
pursuant to this section if the worker is medically stationary or
if the worker's accepted injury is no longer the major
contributing cause of the worker's combined or consequential
condition or conditions pursuant to ORS 656.005 (7). The closure
shall include the duration of temporary total or temporary
partial disability compensation. Permanent disability
compensation shall be redetermined for work disability only. If
the worker has returned to work or the worker's attending
physician has released the worker to return to regular or
modified employment, the insurer or self-insured employer shall
again close the claim. This notice of closure may be appealed
only in the same manner as are other notices of closure under
this section.
(10) If the attending physician or nurse practitioner
authorized to provide compensable medical services under ORS
656.245 has approved the worker's return to work and there is a
labor dispute in progress at the place of employment, the worker
may refuse to return to that employment without loss of
reemployment rights or any vocational assistance provided by this
chapter.
(11) Any notice of closure made under this section may include
necessary adjustments in compensation paid or payable prior to
the notice of closure, including disallowance of permanent
disability payments prematurely made, crediting temporary
disability payments against current or future permanent or
temporary disability awards or payments and requiring the payment
of temporary disability payments which were payable but not paid.
(12) An insurer or self-insured employer may take a credit or
offset of previously paid workers' compensation benefits or
payments against any further workers' compensation benefits or
payments due a worker from that insurer or self-insured employer
Enrolled Senate Bill 559 (SB 559-A) Page 24
when the worker admits to having obtained the previously paid
benefits or payments through fraud, or a civil judgment or
criminal conviction is entered against the worker for having
obtained the previously paid benefits through fraud. Benefits or
payments obtained through fraud by a worker shall not be included
in any data used for ratemaking or individual employer rating or
dividend calculations by { - a guaranty contract - }
{ + an + } insurer, a rating organization licensed pursuant to
ORS chapter 737, the State Accident Insurance Fund Corporation or
the director.
(13)(a) An insurer or self-insured employer may offset any
compensation payable to the worker to recover an overpayment from
a claim with the same insurer or self-insured employer. When
overpayments are recovered from temporary disability or permanent
total disability benefits, the amount recovered from each payment
shall not exceed 25 percent of the payment, without prior
authorization from the worker.
(b) An insurer or self-insured employer may suspend and offset
any compensation payable to the beneficiary of the worker, and
recover an overpayment of permanent total disability benefits
caused by the failure of the worker's beneficiaries to notify the
insurer or self-insured employer about the death of the worker.
(14) Conditions that are direct medical sequelae to the
original accepted condition shall be included in rating permanent
disability of the claim unless they have been specifically
denied.
SECTION 12. ORS 656.268, as amended by section 8, chapter 657,
Oregon Laws 2003, section 12, chapter 811, Oregon Laws 2003,
section 2, chapter 221, Oregon Laws 2005, section 4, chapter 461,
Oregon Laws 2005, and section 2, chapter 569, Oregon Laws 2005,
is amended to read:
656.268. (1) One purpose of this chapter is to restore the
injured worker as soon as possible and as near as possible to a
condition of self support and maintenance as an able-bodied
worker. The insurer or self-insured employer shall close the
worker's claim, as prescribed by the Director of the Department
of Consumer and Business Services, and determine the extent of
the worker's permanent disability, provided the worker is not
enrolled and actively engaged in training according to rules
adopted by the director pursuant to ORS 656.340 and 656.726,
when:
(a) The worker has become medically stationary and there is
sufficient information to determine permanent impairment;
(b) The accepted injury is no longer the major contributing
cause of the worker's combined or consequential condition or
conditions pursuant to ORS 656.005 (7). When the claim is closed
because the accepted injury is no longer the major contributing
cause of the worker's combined or consequential condition or
conditions, and there is sufficient information to determine
permanent impairment, the likely impairment and adaptability that
would have been due to the current accepted condition shall be
estimated;
(c) Without the approval of the attending physician, the worker
fails to seek medical treatment for a period of 30 days or the
worker fails to attend a closing examination, unless the worker
affirmatively establishes that such failure is attributable to
reasons beyond the worker's control; or
(d) An insurer or self-insured employer finds that a worker who
has been receiving permanent total disability benefits has
Enrolled Senate Bill 559 (SB 559-A) Page 25
materially improved and is capable of regularly performing work
at a gainful and suitable occupation.
(2) If the worker is enrolled and actively engaged in training
according to rules adopted pursuant to ORS 656.340 and 656.726,
the temporary disability compensation shall be proportionately
reduced by any sums earned during the training.
(3) A copy of all medical reports and reports of vocational
rehabilitation agencies or counselors shall be furnished to the
worker, if requested by the worker.
(4) Temporary total disability benefits shall continue until
whichever of the following events first occurs:
(a) The worker returns to regular or modified employment;
(b) The attending physician advises the worker and documents in
writing that the worker is released to return to regular
employment;
(c) The attending physician advises the worker and documents in
writing that the worker is released to return to modified
employment, such employment is offered in writing to the worker
and the worker fails to begin such employment. However, an offer
of modified employment may be refused by the worker without the
termination of temporary total disability benefits if the offer:
(A) Requires a commute that is beyond the physical capacity of
the worker according to the worker's attending physician;
(B) Is at a work site more than 50 miles one way from where the
worker was injured unless the site is less than 50 miles from the
worker's residence or the intent of the parties at the time of
hire or as established by the pattern of employment prior to the
injury was that the employer had multiple or mobile work sites
and the worker could be assigned to any such site;
(C) Is not with the employer at injury;
(D) Is not at a work site of the employer at injury;
(E) Is not consistent with the existing written shift change
policy or is not consistent with common practice of the employer
at injury or aggravation; or
(F) Is not consistent with an existing shift change provision
of an applicable collective bargaining agreement; or
(d) Any other event that causes temporary disability benefits
to be lawfully suspended, withheld or terminated under ORS
656.262 (4) or other provisions of this chapter.
(5)(a) Findings by the insurer or self-insured employer
regarding the extent of the worker's disability in closure of the
claim shall be pursuant to the standards prescribed by the
director. The insurer or self-insured employer shall issue a
notice of closure of such a claim to the worker, to the worker's
attorney if the worker is represented, and to the director. The
notice must inform:
(A) The parties, in boldfaced type, of the proper manner in
which to proceed if they are dissatisfied with the terms of the
notice;
(B) The worker of the amount of any further compensation,
including permanent disability compensation to be awarded; of the
duration of temporary total or temporary partial disability
compensation; of the right of the worker to request
reconsideration by the director under this section within 60 days
of the date of the notice of claim closure; of the right of the
insurer or self-insured employer to request reconsideration by
the director under this section within seven days of the date of
the notice of claim closure; of the aggravation rights; and of
such other information as the director may require; and
Enrolled Senate Bill 559 (SB 559-A) Page 26
(C) Any beneficiaries of death benefits to which they may be
entitled pursuant to ORS 656.204 and 656.208.
(b) If the insurer or self-insured employer has not issued a
notice of closure, the worker may request closure. Within 10 days
of receipt of a written request from the worker, the insurer or
self-insured employer shall issue a notice of closure if the
requirements of this section have been met or a notice of refusal
to close if the requirements of this section have not been met. A
notice of refusal to close shall advise the worker of the
decision not to close; of the right of the worker to request a
hearing pursuant to ORS 656.283 within 60 days of the date of the
notice of refusal to close the claim; of the right to be
represented by an attorney; and of such other information as the
director may require.
(c) If a worker, insurer or self-insured employer objects to
the notice of closure, the objecting party first must request
reconsideration by the director under this section. A worker's
request for reconsideration must be made within 60 days of the
date of the notice of closure. A request for reconsideration by
an insurer or self-insured employer may be based only on
disagreement with the findings used to rate impairment and must
be made within seven days of the date of the notice of closure.
(d) If an insurer or self-insured employer has closed a claim
or refused to close a claim pursuant to this section, if the
correctness of that notice of closure or refusal to close is at
issue in a hearing on the claim and if a finding is made at the
hearing that the notice of closure or refusal to close was not
reasonable, a penalty shall be assessed against the insurer or
self-insured employer and paid to the worker in an amount equal
to 25 percent of all compensation determined to be then due the
claimant.
(e) If, upon reconsideration of a claim closed by an insurer or
self-insured employer, the director orders an increase by 25
percent or more of the amount of compensation to be paid to the
worker for either a scheduled or unscheduled permanent disability
and the worker is found upon reconsideration to be at least 20
percent permanently disabled, a penalty shall be assessed against
the insurer or self-insured employer and paid to the worker in an
amount equal to 25 percent of all compensation determined to be
then due the claimant. If the increase in compensation results
from information that the insurer or self-insured employer
demonstrates the insurer or self-insured employer could not
reasonably have known at the time of claim closure, from new
information obtained through a medical arbiter examination or
from the adoption of a temporary emergency rule, the penalty
shall not be assessed.
(6)(a) Notwithstanding any other provision of law, only one
reconsideration proceeding may be held on each notice of closure.
At the reconsideration proceeding:
(A) A deposition arranged by the worker, limited to the
testimony and cross-examination of the worker about the worker's
condition at the time of claim closure, shall become part of the
reconsideration record. The deposition must be conducted subject
to the opportunity for cross-examination by the insurer or
self-insured employer and in accordance with rules adopted by the
director. The cost of the court reporter and one original of the
transcript of the deposition for the Department of Consumer and
Business Services and one copy of the transcript of the
deposition for each party shall be paid by the insurer or
self-insured employer. The reconsideration proceeding may not be
Enrolled Senate Bill 559 (SB 559-A) Page 27
postponed to receive a deposition taken under this subparagraph.
A deposition taken in accordance with this subparagraph may be
received as evidence at a hearing even if the deposition is not
prepared in time for use in the reconsideration proceeding.
(B) Pursuant to rules adopted by the director, the worker or
the insurer or self-insured employer may correct information in
the record that is erroneous and may submit any medical evidence
that should have been but was not submitted by the attending
physician at the time of claim closure.
(C) If the director determines that a claim was not closed in
accordance with subsection (1) of this section, the director may
rescind the closure.
(b) If necessary, the director may require additional medical
or other information with respect to the claims and may postpone
the reconsideration for not more than 60 additional calendar
days.
(c) In any reconsideration proceeding under this section in
which the worker was represented by an attorney, the director
shall order the insurer or self-insured employer to pay to the
attorney, out of the additional compensation awarded, an amount
equal to 10 percent of any additional compensation awarded to the
worker.
(d) The reconsideration proceeding shall be completed within 18
working days from the date the reconsideration proceeding begins,
and shall be performed by a special evaluation appellate unit
within the department. The deadline of 18 working days may be
postponed by an additional 60 calendar days if within the 18
working days the department mails notice of review by a medical
arbiter. If an order on reconsideration has not been mailed on or
before 18 working days from the date the reconsideration
proceeding begins, or within 18 working days plus the additional
60 calendar days where a notice for medical arbiter review was
timely mailed or the director postponed the reconsideration
pursuant to paragraph (b) of this subsection, or within such
additional time as provided in subsection (7) of this section
when reconsideration is postponed further because the worker has
failed to cooperate in the medical arbiter examination,
reconsideration shall be deemed denied and any further
proceedings shall occur as though an order on reconsideration
affirming the notice of closure was mailed on the date the order
was due to issue.
(e) The period for completing the reconsideration proceeding
described in paragraph (d) of this subsection begins upon receipt
by the director of a worker's request for reconsideration
pursuant to subsection (5)(c) of this section. If the insurer or
self-insured employer requests reconsideration, the period for
reconsideration begins upon the earlier of the date of the
request for reconsideration by the worker, the date of receipt of
a waiver from the worker of the right to request reconsideration
or the date of expiration of the right of the worker to request
reconsideration. If a party elects not to file a separate request
for reconsideration, the party does not waive the right to fully
participate in the reconsideration proceeding, including the
right to proceed with the reconsideration if the initiating party
withdraws the request for reconsideration.
(f) Any medical arbiter report may be received as evidence at a
hearing even if the report is not prepared in time for use in the
reconsideration proceeding.
Enrolled Senate Bill 559 (SB 559-A) Page 28
(g) If any party objects to the reconsideration order, the
party may request a hearing under ORS 656.283 within 30 days from
the date of the reconsideration order.
(7)(a) If the basis for objection to a notice of closure issued
under this section is disagreement with the impairment used in
rating of the worker's disability, the director shall refer the
claim to a medical arbiter appointed by the director.
(b) If neither party requests a medical arbiter and the
director determines that insufficient medical information is
available to determine disability, the director may refer the
claim to a medical arbiter appointed by the director.
(c) At the request of either of the parties, a panel of three
medical arbiters shall be appointed.
(d) The arbiter, or panel of medical arbiters, shall be chosen
from among a list of physicians qualified to be attending
physicians referred to in ORS 656.005 (12)(b)(A) who were
selected by the director in consultation with the Board of
Medical Examiners for the State of Oregon and the committee
referred to in ORS 656.790.
(e)(A) The medical arbiter or panel of medical arbiters may
examine the worker and perform such tests as may be reasonable
and necessary to establish the worker's impairment.
(B) If the director determines that the worker failed to attend
the examination without good cause or failed to cooperate with
the medical arbiter, or panel of medical arbiters, the director
shall postpone the reconsideration proceedings for up to 60 days
from the date of the determination that the worker failed to
attend or cooperate, and shall suspend all disability benefits
resulting from this or any prior opening of the claim until such
time as the worker attends and cooperates with the examination or
the request for reconsideration is withdrawn. Any additional
evidence regarding good cause must be submitted prior to the
conclusion of the 60-day postponement period.
(C) At the conclusion of the 60-day postponement period, if the
worker has not attended and cooperated with a medical arbiter
examination or established good cause, there shall be no further
opportunity for the worker to attend a medical arbiter
examination for this claim closure. The reconsideration record
shall be closed, and the director shall issue an order on
reconsideration based upon the existing record.
(D) All disability benefits suspended pursuant to this
subsection, including all disability benefits awarded in the
order on reconsideration, or by an Administrative Law Judge, the
Workers' Compensation Board or upon court review, shall not be
due and payable to the worker.
(f) The costs of examination and review by the medical arbiter
or panel of medical arbiters shall be paid by the insurer or
self-insured employer.
(g) The findings of the medical arbiter or panel of medical
arbiters shall be submitted to the director for reconsideration
of the notice of closure.
(h) After reconsideration, no subsequent medical evidence of
the worker's impairment is admissible before the director, the
Workers' Compensation Board or the courts for purposes of making
findings of impairment on the claim closure.
(i)(A) When the basis for objection to a notice of closure
issued under this section is a disagreement with the impairment
used in rating the worker's disability, and the director
determines that the worker is not medically stationary at the
time of the reconsideration or that the closure was not made
Enrolled Senate Bill 559 (SB 559-A) Page 29
pursuant to this section, the director is not required to appoint
a medical arbiter prior to the completion of the reconsideration
proceeding.
(B) If the worker's condition has substantially changed since
the notice of closure, upon the consent of all the parties to the
claim, the director shall postpone the proceeding until the
worker's condition is appropriate for claim closure under
subsection (1) of this section.
(8) No hearing shall be held on any issue that was not raised
and preserved before the director at reconsideration. However,
issues arising out of the reconsideration order may be addressed
and resolved at hearing.
(9) If, after the notice of closure issued pursuant to this
section, the worker becomes enrolled and actively engaged in
training according to rules adopted pursuant to ORS 656.340 and
656.726, any permanent disability payments due under the closure
shall be suspended, and the worker shall receive temporary
disability compensation while the worker is enrolled and actively
engaged in the training. When the worker ceases to be enrolled
and actively engaged in the training, the insurer or self-insured
employer shall again close the claim pursuant to this section if
the worker is medically stationary or if the worker's accepted
injury is no longer the major contributing cause of the worker's
combined or consequential condition or conditions pursuant to ORS
656.005 (7). The closure shall include the duration of temporary
total or temporary partial disability compensation. Permanent
disability compensation shall be redetermined for unscheduled
disability only. If the worker has returned to work or the
worker's attending physician has released the worker to return to
regular or modified employment, the insurer or self-insured
employer shall again close the claim. This notice of closure may
be appealed only in the same manner as are other notices of
closure under this section.
(10) If the attending physician has approved the worker's
return to work and there is a labor dispute in progress at the
place of employment, the worker may refuse to return to that
employment without loss of reemployment rights or any vocational
assistance provided by this chapter.
(11) Any notice of closure made under this section may include
necessary adjustments in compensation paid or payable prior to
the notice of closure, including disallowance of permanent
disability payments prematurely made, crediting temporary
disability payments against current or future permanent or
temporary disability awards or payments and requiring the payment
of temporary disability payments which were payable but not paid.
(12) An insurer or self-insured employer may take a credit or
offset of previously paid workers' compensation benefits or
payments against any further workers' compensation benefits or
payments due a worker from that insurer or self-insured employer
when the worker admits to having obtained the previously paid
benefits or payments through fraud, or a civil judgment or
criminal conviction is entered against the worker for having
obtained the previously paid benefits through fraud. Benefits or
payments obtained through fraud by a worker shall not be included
in any data used for ratemaking or individual employer rating or
dividend calculations by { - a guaranty contract - } { +
an + } insurer, a rating organization licensed pursuant to ORS
chapter 737, the State Accident Insurance Fund Corporation or the
director.
Enrolled Senate Bill 559 (SB 559-A) Page 30
(13)(a) An insurer or self-insured employer may offset any
compensation payable to the worker to recover an overpayment from
a claim with the same insurer or self-insured employer. When
overpayments are recovered from temporary disability or permanent
total disability benefits, the amount recovered from each payment
shall not exceed 25 percent of the payment, without prior
authorization from the worker.
(b) An insurer or self-insured employer may suspend and offset
any compensation payable to the beneficiary of the worker, and
recover an overpayment of permanent total disability benefits
caused by the failure of the worker's beneficiaries to notify the
insurer or self-insured employer about the death of the worker.
(14) Conditions that are direct medical sequelae to the
original accepted condition shall be included in rating permanent
disability of the claim unless they have been specifically
denied.
SECTION 13. ORS 656.407 is amended to read:
656.407. (1) An employer shall establish proof with the
Director of the Department of Consumer and Business Services that
the employer is qualified either:
(a) As a carrier-insured employer by causing { - a guaranty
contract issued by a guaranty contract - } { + proof of
coverage provided by an + } insurer to be filed with the
director; or
(b) As a self-insured employer by establishing proof that the
employer has an adequate staff qualified to process claims
promptly and has the financial ability to make certain the prompt
payment of all compensation and other payments that may become
due to the director under this chapter.
(2) Except as provided in subsection (3) of this section, a
self-insured employer shall establish proof of financial ability
by providing security that the director determines acceptable by
rule. The security must be in an amount reasonably sufficient to
insure payment of compensation and other payments that may become
due to the director but not less than the employer's normal
expected annual claim liabilities and in no event less than
$100,000. In arriving at the amount of security required under
this subsection, the director may take into consideration the
financial ability of the employer to pay compensation and other
payments and probable continuity of operation. The security shall
be held by the director to secure the payment of compensation for
injuries to subject workers of the employer and to secure other
payments that may become due from the employer to the director
under this chapter. Moneys received as security under this
subsection shall be deposited with the State Treasurer in an
account separate and distinct from the General Fund. Interest
earned by the account shall be credited to the account. The
amount of security may be increased or decreased from time to
time by the director.
(3)(a) A city or county that wishes to be exempt from
subsection (2) of this section may make written application
therefor to the director. The application shall include a copy of
the city's or county's most recent annual audit as filed with the
Secretary of State under ORS 297.405 to 297.740, information
regarding the establishment of a loss reserve account for the
payment of compensation to injured workers and such other
information as the director may require. The director shall
approve the application and the city or county shall be exempt
from subsection (2) of this section if the director finds that:
Enrolled Senate Bill 559 (SB 559-A) Page 31
(A) The city or county has been a self-insured employer in
compliance with subsection (2) of this section for more than
three consecutive years prior to making the application referred
to in this subsection as an independently self-insured employer
and not as part of a self-insured group.
(B) The city or county has in effect a loss reserve account:
(i) That is actuarially sound and that is adequately funded as
determined by an annual audit under ORS 297.405 to 297.740 to pay
all compensation to injured workers and amounts due the director
pursuant to this chapter. A copy of the annual audit shall be
filed with the director. Upon a finding that there is probable
cause to believe that the loss reserve account is not actuarially
sound, the director may require a city or county to obtain an
independent actuarial audit of the loss reserve account. The
requirements of this subsection are in addition to and not in
lieu of any other audit or reporting requirement otherwise
prescribed by or pursuant to law.
(ii) That is dedicated to and may be expended only for the
payment of compensation and amounts due the director by the city
or county under this chapter.
(b) The director shall have the first lien and priority right
to the full amount of the loss reserve account required to pay
the present discounted value of all present and future claims
under this chapter.
(c) The city or county shall notify the director no later than
60 days prior to any action to discontinue the loss reserve
account. The city or county shall advise the director of the
city's or county's plans to submit the security deposits required
in subsection (2) of this section, or obtain coverage as a
carrier-insured employer prior to the date the loss reserve
account ceases to exist. If the city or county elects to
discontinue self-insurance, it shall submit such security as the
director may require to insure payment of all compensation and
amounts due the director for the period the city or county was
self-insured.
(d) In order to requalify as a self-insured employer, the city
or county must deposit prior to discontinuance of the loss
reserve account such security as is required by the director
pursuant to subsection (2) of this section.
(e) Notwithstanding ORS 656.440, if prior to the date of
discontinuance of the loss reserve account the director has not
received the security deposits required in subsection (2) of this
section, the city's or county's certificate of self-insurance is
automatically revoked as of that date.
SECTION 14. ORS 656.443 is amended to read:
656.443. (1) If an employer defaults in payment of compensation
or other payments due to the Director of the Department of
Consumer and Business Services under this chapter, the director
may, on notice to the employer and any insurer providing { - a
guaranty contract or surety bond - } { + workers' compensation
insurance coverage or a surety bond + } to such employer, use
money or interest and dividends on securities, sell securities or
institute legal proceedings on any surety bond or { - guaranty
contract deposited or - } { + insurance policy for which a
notice of coverage has been + } filed with the director to the
extent necessary to make such payments.
(2) Prior to any default by the employer, the employer is
entitled to all interest and dividends on securities on deposit
and to exercise all voting rights, stock options and other
similar incidents of ownership of the securities.
Enrolled Senate Bill 559 (SB 559-A) Page 32
{ - (3) If for any reason the certification of a self-insured
employer is canceled or terminated, or the coverage of a
carrier-insured employer is canceled or terminated, the security
deposited or the guaranty contract filed with the director shall
remain on deposit or in effect, as the case may be, for a period
of at least 62 months after the employer ceases to be a
self-insured or a carrier-insured employer. The security or
contract shall be maintained in such amount as is necessary to
secure the outstanding and contingent liability arising from the
accidental injuries secured by such security or contract, and to
assure the payment of claims for aggravation and claims under ORS
656.278 based on such accidental injuries. At the expiration of
the 62 months' period, or such other period as the director may
consider proper, the director may accept in lieu of any such
security or contract a policy of paid-up insurance in a form
approved by the director. - }
{ + (3) If for any reason the certification of a self-insured
employer is canceled or terminated, the security deposited with
the director shall remain on deposit or in effect, as the case
may be, for a period of at least 62 months after the employer
ceases to be a self-insured employer. The security shall be
maintained in an amount necessary to secure the outstanding and
contingent liability arising from the accidental injuries secured
by the security, and to assure the payment of claims for
aggravation and claims arising under ORS 656.278 based on those
accidental injuries. At the expiration of the 62-month period, or
of another period the director may consider proper, the director
may accept in lieu of the security deposited with the director a
policy of paid-up insurance in a form approved by the
director. + }
SECTION 15. ORS 656.447 is amended to read:
656.447. (1) The Director of the Department of Consumer and
Business Services may suspend or revoke the authorization of
{ - a guaranty contract - } { + an + } insurer to issue
{ - guaranty contracts - } { + workers' compensation insurance
policies + } if the director, after notice to the company and
giving the company an opportunity to be heard and present
evidence, finds that:
(a) The company has failed to comply with its obligations under
any such { - contract - } { + policy + }; or
(b) The company has failed to comply with the orders of the
director or the provisions of this chapter or any rule
promulgated pursuant thereto.
(2) A suspension or revocation shall not affect the liability
of any such company on any { - guaranty contract - }
{ + workers' compensation insurance policy + } in force prior to
the suspension or revocation.
SECTION 16. ORS 656.622 is amended to read:
656.622. (1) There is established a Reemployment Assistance
Program for the benefit of employers and workers and for the
purpose of:
(a) Giving employers and workers the benefits provided in this
section.
(b) Providing reimbursement of reasonable program
administration costs of self-insured employers and of insurers of
employers who participate in any program funded through the
Reemployment Assistance Program.
(2) In order to preclude or reduce nondisabling claims from
becoming disabling claims, preclude on-the-job injuries from
recurring, reduce disability by returning injured workers to work
Enrolled Senate Bill 559 (SB 559-A) Page 33
sooner and to help injured workers remain employed, the Director
of the Department of Consumer and Business Services may provide
assistance to employers from the Reemployment Assistance Program
in such manner and amount as the director considers appropriate.
Assistance may include, but need not be limited to, modification
of work sites. For purposes of this subsection, work site
modification may include engineering design work and occupational
health consulting services. Factors to be considered by the
director in determining the extent of assistance must include but
need not be limited to the financial stability and solvency of
employers, the employer's record of returning injured workers to
the workplace and the cost-effectiveness of modifications.
Assistance may be provided in the form of grants and matching
contributions from employers for funds.
(3) In order to encourage the employment of individuals who
have incurred compensable injuries that result in disability
which may be a substantial obstacle to employment, the director
may provide, to eligible injured workers and to employers who
employ them, assistance from the Workers' Benefit Fund in such
manner and amount as the director considers appropriate.
(4)(a) In addition to such assistance as the director may
provide under this section, the director shall provide
reimbursement to self-insured employers or to the insurers of
employers who hire preferred workers for the claim costs incurred
for injuries to those workers during the first three years from
the date of hire, as follows:
(A) The claim costs of injuries incurred by those workers.
(B) Reasonable claims administration costs.
(b) A worker may not waive eligibility for preferred worker
status in the claim by agreement pursuant to ORS 656.236.
(5)(a) In addition to such assistance as the Director of the
Department of Consumer and Business Services may provide under
subsection (3) of this section, the director shall provide to
participating self-insured employers and the insurers of
participating employers reimbursement of reasonable program
administration costs.
(b) As used in this subsection, 'participating employer' or '
participating self-insured employer' means an employer
participating in any program funded through the Reemployment
Assistance Program.
(6) Notwithstanding any other provision of law, determinations
by the director regarding assistance pursuant to this section are
not subject to review by any court or other administrative body.
(7) The Reemployment Assistance Program shall be funded with
moneys collected as provided in ORS 656.506.
(8) Any assistance from the Reemployment Assistance Program
shall be to the extent of the moneys available in the Workers'
Benefit Fund, for the purpose of the program as determined by the
director.
(9) The director may make such rules as may be required to
establish, regulate, manage and disburse moneys in the Workers'
Benefit Fund in accordance with the intent of this section. Such
rules shall include, but are not limited to, the eligibility
criteria to receive assistance under this section and the
issuance of identity cards to preferred workers to assist
employers in the administration of the program.
(10) Claims costs incurred as a result of an injury sustained
by a preferred worker during the three years after that worker is
hired shall not be included in any data used for ratemaking or
individual employer rating or dividend calculations by { - a
Enrolled Senate Bill 559 (SB 559-A) Page 34
guaranty contract - } { + an + } insurer, a rating organization
licensed pursuant to ORS chapter 737, the State Accident
Insurance Fund Corporation or the Department of Consumer and
Business Services. Neither insurance premiums nor premium
assessments under this chapter are payable for preferred workers.
(11) Any moneys from the Workers' Benefit Fund reimbursed to an
agency for costs incurred in reemploying injured state workers in
the manner described in ORS 659A.052 or in providing wage
subsidies for the reemployment of injured state workers shall be
outside the biennial expenditure limitation imposed on the agency
by the Legislative Assembly and shall be available for
expenditure by the agency as a continuous appropriation.
(12) As used in this section, 'preferred worker' means a worker
who, because of a permanent disability resulting from a
compensable injury or occupational disease, is unable to return
to the worker's regular employment, whether or not an order has
been issued awarding permanent disability.
SECTION 17. ORS 656.628 is amended to read:
656.628. (1) There is established a Handicapped Workers Program
for the benefit of complying employers and their workers. The
purpose of the program is to encourage the employment or
reemployment of handicapped workers.
(2) As used in this section, 'handicapped worker' means a
worker who is afflicted with or subject to any permanent physical
or mental impairment, whether congenital or due to an injury or
disease, including periodic impairment of consciousness or
muscular control of such character that the impairment would
prevent the worker from obtaining or retaining employment.
(3) Any employer of a worker who claims or has received
compensation under this chapter, or whose dependents have claimed
or received such compensation, may file an application with the
Director of the Department of Consumer and Business Services
requesting the director to make the determinations referred to in
subsection (4) of this section.
(4) When the director receives a request referred to in
subsection (3) of this section, the director shall determine:
(a) Whether the injured worker was a handicapped worker and
whether the injury, disease or death sustained by the worker
would not have been sustained except for the handicap; or
(b) Whether the injured worker was a handicapped worker and
whether the injury, disease or death sustained by the worker
would have been sustained without regard to the handicap but
that:
(A) Any resulting disability was substantially greater by
reason of the handicap; or
(B) The handicap contributed substantially to the worker's
death; and
(C) Whether the injury, disease or death of the worker would
not have occurred except for the act or omission of a handicapped
worker employed by the same employer and that the act or omission
of the handicapped worker would not have occurred except for the
handicapped worker's impairment.
(5) If the director determines that any of the conditions
described in subsection (4) of this section exist, the director
may reimburse the paying agency for compensation amounts in
excess of $1,000 per claimant for all subsequent injuries
throughout the claimant's working career, paid as the result of
the condition.
(6) The reimbursement paid from the Workers' Benefit Fund shall
not be included in any data used for rate making or individual
Enrolled Senate Bill 559 (SB 559-A) Page 35
employer rating or dividend calculations by { - a guaranty
contract - } { + an + } insurer, a rating organization licensed
pursuant to ORS chapter 737, the State Accident Insurance Fund
Corporation or the Department of Consumer and Business Services.
(7) Notwithstanding any other provision of law:
(a) Any reimbursement to employers under the Handicapped
Workers Program shall be in such amounts as the director
prescribes and only to the extent of moneys available in the
Workers' Benefit Fund as determined by the director.
(b) Determinations made by the director regarding reimbursement
from the Workers' Benefit Fund for the purposes of this section
are not subject to review by any court or administrative body.
(c) After a determination has been made by the director that an
employer will receive reimbursement from the Workers' Benefit
Fund, any settlement of the claim by the parties is void unless
made with the written approval of the director.
(8) The director by rule shall prescribe the form and manner of
requesting determinations under this section, the amount of
reimbursement payable and such other matters as may be necessary
for the administration of this section.
SECTION 18. ORS 656.730 is amended to read:
656.730. (1) The Director of the Department of Consumer and
Business Services shall promulgate a plan for the equitable
apportionment among the State Accident Insurance Fund Corporation
and all members of workers' compensation rating organizations in
the state coverage required by ORS 656.017 for subject employers
whose coverage the fund, or any members of such rating
organizations, object to providing. The plan shall include
provisions authorized pursuant to ORS 737.265 (2), except that:
(a) Regardless of the rating plans adopted by any rating
organization, the plan shall provide a rating structure with
differing rate tiers for insureds too small to qualify for
experience rating and for insureds large enough to be experience
rated; and
(b) The plan shall seek and be entitled to receive approval for
all classification exceptions approved by the director for any
insurer.
(2) If any insurer issuing { - guaranty contracts - }
{ + workers' compensation insurance policies + } under this
chapter refuses to accept its equitable apportionment under such
plan, the director shall revoke the insurer's authority to issue
{ - guaranty contracts - } { + workers' compensation insurance
policies + }.
SECTION 19. ORS 656.740 is amended to read:
656.740. (1) A person may contest a proposed order of the
Director of the Department of Consumer and Business Services
declaring that person to be a noncomplying employer, or a
proposed assessment of civil penalty, by filing with the
Department of Consumer and Business Services, within 60 days
after the mailing of the order, a written request for a hearing.
Such a request need not be in any particular form, but shall
specify the grounds upon which the person contests the proposed
order or assessment. An order by the director under this
subsection is prima facie correct and the burden is upon the
employer to prove that the order is incorrect.
(2) A person may contest a nonsubjectivity determination of the
director by filing a written request for hearing with the
department within 60 days after the mailing of the determination.
(3) When any insurance carrier, including the State Accident
Insurance Fund Corporation, is alleged by an employer to have
Enrolled Senate Bill 559 (SB 559-A) Page 36
contracted to provide the employer with workers' compensation
coverage for the period in question, the Workers' Compensation
Board shall join such insurance carrier as a necessary party to
any hearing relating to such employer's alleged noncompliance or
to any hearing relating to a nonsubjectivity determination and
shall serve the carrier, at least 30 days prior to such hearing,
with notice thereof.
(4) A hearing relating to a nonsubjectivity determination, to a
proposed order declaring a person to be a noncomplying employer,
or to a proposed assessment of civil penalty under ORS 656.735,
shall be held by an Administrative Law Judge of the board's
Hearings Division. However, a hearing shall not be granted unless
a request for hearing is filed within the period specified in
subsection (1) or (2) of this section, and if a request for
hearing is not so filed, the nonsubjectivity determination, order
or penalty, as proposed, shall be a final order of the department
and shall not be subject to review by any agency or court.
(5) Notwithstanding ORS 183.315 (1), the issuance of
nonsubjectivity determinations, orders declaring a person to be a
noncomplying employer or the assessment of civil penalties
pursuant to this chapter, the conduct of hearings and the
judicial review thereof shall be as provided in ORS chapter 183,
except that:
(a) The order of an Administrative Law Judge in a contested
case shall be deemed to be a final order of the director.
(b) The director shall have the same right to judicial review
of the order of an Administrative Law Judge as any person who is
adversely affected or aggrieved by such final order.
(c) When a nonsubjectivity determination or an order declaring
a person to be a noncomplying employer is contested at the same
hearing as a matter concerning a claim pursuant to ORS 656.283
and 656.704, the review thereof shall be as provided for a matter
concerning a claim.
(6)(a) If a person against whom an order is issued pursuant to
this section prevails at hearing or on appeal, the person is
entitled to reasonable attorney fees to be paid by the director
from the Workers' Benefit Fund.
(b) If a person against whom an order is issued is found to be
a noncomplying employer by the director, but the person proves
coverage pursuant to subsection (3) of this section and the
insurer failed to file timely { - a guaranty contract - }
{ + proof of coverage + } as required by ORS 656.419 or
improperly canceled the person's coverage, the employer is
entitled to reasonable attorney fees paid by the insurer.
(c) If a worker prevails at hearing or on appeal from a
nonsubjectivity determination, the worker is entitled to
reasonable attorney fees to be paid by the director from the
Workers' Benefit Fund and reimbursed by the employer.
SECTION 20. ORS 656.850 is amended to read:
656.850. (1) As used in this section and ORS 656.018, 656.403,
656.855 and 737.270:
(a) 'Worker leasing company' means a person who provides
workers, by contract and for a fee, to work for a client but does
not include a person who provides workers to a client on a
temporary basis.
(b) 'Temporary basis' means providing workers to a client for
special situations such as to cover employee absences, employee
leaves, professional skill shortages, seasonal workloads and
special assignments and projects with the expectation that the
position or positions will be terminated upon completion of the
Enrolled Senate Bill 559 (SB 559-A) Page 37
special situation. Workers also are provided on a temporary basis
if they are provided as probationary new hires with a reasonable
expectation of transitioning to permanent employment with the
client and the client uses a preestablished probationary period
in its overall employment selection program.
(c) 'Temporary service provider' means a person who provides
workers, by contract and for a fee, to a client on a temporary
basis.
(2) No person shall perform services as a worker leasing
company in this state without first having obtained a license
therefor from the Director of the Department of Consumer and
Business Services. No person required by this section to obtain a
license shall fail to comply with this section or ORS 656.855, or
any rule adopted pursuant thereto.
(3) When a worker leasing company provides workers to a client,
the worker leasing company shall satisfy the requirements of ORS
656.017 and 656.407 and provide workers' compensation coverage
for those workers and any subject workers employed by the client
unless during the term of the lease arrangement the client has
{ - an active guaranty contract - } { + proof of coverage + }
on file with the director that extends coverage to subject
workers employed by the client and any workers leased by the
client. If the client allows the { - guaranty contract to
terminate - } { + coverage to expire + } and continues to
employ subject workers or has leased workers, the client shall be
considered a noncomplying employer unless the worker leasing
company has complied with subsection (5) of this section.
(4) When a worker leasing company provides workers for a
client, the worker leasing company shall assure that the client
provides adequate training, supervision and instruction for those
workers to meet the requirements of ORS chapter 654.
(5) When a worker leasing company provides subject workers to
work for a client and also provides workers' compensation
coverage for those workers, the worker leasing company shall
notify the director in writing. The notification shall be given
in such manner as the director may prescribe. A worker leasing
company may terminate its obligation to provide workers'
compensation coverage for workers provided to a client by giving
to the client and the director written notice of the termination.
A notice of termination shall state the effective date and hour
of the termination, but the termination shall be effective not
less than 30 days after the notice is received by the director.
Notice to the client under this section shall be given by mail,
addressed to the client at { - its - } { + the client's + }
last-known address. If the client is a partnership, notice may be
given to any of the partners. If the client is a corporation,
notice may be given to any agent or officer of the corporation
upon whom legal process may be served.
SECTION 21. ORS 654.097 is amended to read:
654.097. (1)(a) An insurer that { - issues guaranty
contracts - } { + provides workers' compensation coverage + } to
employers pursuant to ORS chapter 656 shall furnish occupational
safety and health loss control consultative services to its
insured employers in accordance with standards established by the
Director of the Department of Consumer and Business Services.
(b) A self-insured employer shall establish and implement an
occupational safety and health loss control program in accordance
with standards established by the director.
Enrolled Senate Bill 559 (SB 559-A) Page 38
(2) An insurer or self-insured employer may furnish any of the
services required by this section through an independent
contractor.
(3) The program of an insurer for furnishing loss control
consultative services as required by this section shall be
adequate to meet the minimum standards prescribed by the director
by rule from time to time. Such services shall include the
conduct of workplace surveys to identify health and safety
problems, review of employer injury records with appropriate
persons and development of plans for improvement of employer
health and safety loss records. At the time a { - guaranty
contract - } { + workers' compensation insurance policy + } is
issued and on an annual basis thereafter, the insurer shall
notify its insured employers of the loss control consultative
services that the insurer is required by rule to offer, without
additional charge as provided in this section, and shall provide
a written description of the services that the insurer does
offer.
(4) The insurer shall not charge any fee in addition to the
insurance premium for safety and health loss control consultative
services.
(5) Each insurer shall make available, at the request of the
director and in the form prescribed by the director, its annual
expenditures for safety and health loss control activities for
the prior year and its budget for safety and health loss control
activities for the following year.
(6) As used in this section, 'employer,' 'insurer' and '
self-insured employer' have the meaning for those terms provided
in ORS 656.005.
SECTION 22. ORS 731.158 is amended to read:
731.158. 'Casualty insurance' means:
(1) Insurance against legal, contractual or assumed liability
for death, injury or disability of any human, or for damage to
property; and provision for medical, hospital, surgical and
disability benefits to injured persons including insurance
against the risk of economic loss assumed under a less than fully
insured employee health benefit plan and funeral and death
benefits to dependents, beneficiaries or personal representatives
of persons killed, irrespective of legal liability of the
insured, when issued as coverage for personal injury protection
benefits under a motor vehicle liability policy or as an
incidental coverage with or supplemental to liability insurance;
(2) Motor vehicle physical damage, burglary and theft, glass,
boiler and machinery, credit and livestock insurance;
(3) Insurance of the obligations accepted by, imposed upon or
assumed by employers under law for death, disablement or
occupational diseases of employees { + ; + } { - , including
issuing guaranty contracts in connection therewith; - }
(4) Insurance which undertakes to perform or provide repair or
replacement service or indemnification therefor for the
operational or structural failure of specified real or personal
property or property components; and
(5) Insurance against any other kind of loss, damage or
liability properly a subject of insurance and not within any
other class of insurance otherwise defined, if such insurance is
not disapproved by the Director of the Department of Consumer and
Business Services as being contrary to law or public policy.
SECTION 23. ORS 731.475 is amended to read:
731.475. (1) Every insurer authorized to issue workers'
compensation coverage to subject employers as required by ORS
Enrolled Senate Bill 559 (SB 559-A) Page 39
chapter 656 shall maintain a place of business in this state
where the insurer shall:
(a) Process, and keep complete records of, claims for
compensation made to the insurer under ORS chapter 656.
(b) Make available upon request complete records, including all
records submitted electronically, of all { - guaranty
contracts - } { + workers' compensation insurance policies + }
issued as required by ORS chapter 656.
(c) Keep records identifying the specific persons covered by an
employer electing coverage pursuant to ORS 656.039.
(2) Claims records must be retained in, and may be removed
from, this state or disposed of, in accordance with the rules of
the Director of the Department of Consumer and Business Services.
The records must be available to the Department of Consumer and
Business Services for examination and audit at all reasonable
times upon notice by the department to the insurer.
(3) In lieu of establishing a place of business in this state
for the purpose required by this section, an insurer may keep
such records in this state at places of business operated by
service companies, if:
(a) Each service company is incorporated in or authorized to do
business in this state;
(b) The agreement entered into between the insurer and the
service company grants each service company a power of attorney
to act for the insurer in workers' compensation coverage and
claims proceedings under ORS chapter 656; and
(c) The agreement entered into between the insurer and each
service company is approved by the director.
(4) Notwithstanding subsection (3) of this section, an insurer
may not:
(a) Enter into a service agreement contract with one of its
insureds unless the insured has service contracts with other
insurers; or
(b) Have more than eight locations at any one time where claims
are processed or records are maintained.
SECTION 24. ORS 731.480 is amended to read:
731.480. An insurer shall not issue { - guaranty
contracts - } { + workers' compensation insurance policies + }
pursuant to ORS chapter 656 unless it furnishes occupational
safety and health loss control consultative services to its
insured employers consistent with the requirements of ORS
654.097.
SECTION 25. ORS 731.590 is amended to read:
731.590. As used in ORS 731.592 and 731.594, 'insurer '
includes, but is not limited to:
(1) An insurer, as defined in ORS 731.106.
(2) A health care service contractor, as defined in ORS
750.005, including, but not limited to, a health maintenance
organization.
(3) A multiple employer welfare arrangement, as defined in ORS
750.301.
(4) A legal entity that is self-insured and provides insurance
services to its employees.
(5) { - A guaranty contract - } { + An + } insurer, as
defined in ORS 656.005.
(6) An employer authorized under ORS chapter 656 to self-insure
its workers' compensation risk.
(7) A fraternal benefit society, as described in ORS 748.106.
(8) An insurance producer, as defined in ORS 731.104.
SECTION 26. ORS 731.608 is amended to read:
Enrolled Senate Bill 559 (SB 559-A) Page 40
731.608. (1) Except as provided in subsection (2) of this
section, deposits made in this state under ORS 731.624 shall be
held for the faithful performance by the insurer of all insurance
obligations, including claims for unearned premiums, with respect
to domestic risks pertaining to the particular class of insurance
for which the deposit was made. However, there shall be excluded
from each such obligation the same amount as is excluded in
determining the obligation of the Oregon Insurance Guaranty
Association under ORS 734.510 to 734.710.
(2) If at any time a deposit made under ORS 731.624 by a
particular insurer is insufficient to perform the insurance
obligations upon the faithful performance of which the deposit
was conditioned, then any other deposit made under ORS 731.624 by
that insurer shall be so used to the extent that such other
deposit is not used to perform the insurance obligations upon the
faithful performance of which such other deposit was conditioned.
(3) Deposits made by insurers and reinsurers in this state
under ORS 731.628 shall be held for the payment of compensation
benefits to workers employed by insured employers other than
those insured with the State Accident Insurance Fund Corporation
to whom the insurer has issued a { - guaranty contract - }
{ + workers' compensation insurance policy + } under ORS chapter
656. Deposits made by insurers and reinsurers under ORS 731.628
also shall be held to reimburse the Department of Consumer and
Business Services, subject to approval by the Director of the
Department of Consumer and Business Services, for costs incurred
by the department in processing workers' compensation claims of
insurers which have been placed in liquidation, receivership,
rehabilitation or other such status for the orderly conservation
or distribution of assets, pursuant to the laws of this state or
any other state.
(4) A deposit made in this state by a domestic insurer
transacting insurance in another jurisdiction, and as required by
the laws of such jurisdiction, shall be held for the purpose or
purposes required by such laws.
(5) Deposits of foreign and alien insurers required pursuant to
ORS 731.854 shall be held for such purposes as are required by
such law, and as specified by the director's order by which the
deposit is required.
(6) Deposits of domestic reciprocal insurers required pursuant
to ORS 731.632 shall be held for the benefit of subscribers
wherever located.
SECTION 27. ORS 731.628 is amended to read:
731.628. (1) In addition to any other requirement therefor
under the Insurance Code, each insurer other than the State
Accident Insurance Fund Corporation that issues { - guaranty
contracts - } { + workers' compensation insurance policies + }
to employers under ORS chapter 656 shall deposit with the
Department of Consumer and Business Services an amount that is
the greater of the following amounts:
(a) $100,000.
(b) An amount equal to the sum described in this paragraph less
credits for approved reinsurance that the insurer may take under
subsection (2) of this section. The sum under this paragraph is
the sum of the following, computed as of December 31 next
preceding in respect to { - guaranty contracts - } { +
workers' compensation insurance policies + } written subject to
ORS chapter 656:
(A) The aggregate of the present values at four percent
interest of the determined and estimated future loss and
Enrolled Senate Bill 559 (SB 559-A) Page 41
loss-expense payments upon claims incurred more than three years
next preceding the date of computation.
(B) The aggregate of the amounts computed under this
subparagraph for each of the three years next preceding the date
of computation. The amount for each year shall be 65 percent of
the earned premiums for the year less all loss and loss-expense
payments made upon claims incurred in the corresponding year,
except that the amount for any year shall not be less than the
present value at four percent interest of the determined and
estimated future loss and loss-expense payments upon claims
incurred in that year.
(2) Before an insurer may take a credit for reinsurance under
subsection (1)(b) of this section, the reinsurer must deposit
with the department an amount equal to the credit to be taken.
(3) An insurer may be allowed the credit referred to in
subsection (1)(b) of this section only when the reinsurer has
deposited with the department an amount equal to the credit.
SECTION 28. ORS 737.602 is amended to read:
737.602. (1) As used in this section:
(a) 'Project' means a construction project, a plant expansion
or improvements within Oregon with an aggregate construction
value in excess of $90 million that is to be completed within a
defined period. The average construction value during the defined
period of the project must be at least $18 million per year.
'Project' does not mean a series of unrelated construction
projects artificially aggregated to satisfy the $90 million
requirement.
(b) 'Project sponsor' means public bodies, utilities,
corporations and firms undertaking to construct a project in
excess of $90 million and conducting business in the State of
Oregon.
(c) 'Public body' has the meaning given the term in ORS 30.260.
(2) Notwithstanding ORS 279C.530, 656.126, 737.600 or 746.160,
an insurer approved to transact insurance in this state,
including the State Accident Insurance Fund Corporation or
{ - a guaranty contract - } { + an + } insurer as defined in
ORS 656.005, may issue with the prior approval of the Director of
the Department of Consumer and Business Services a policy of
insurance { - or a guaranty contract covering and insuring - }
{ + covering + } the project sponsor, the prime contractor under
a contract for the construction of the project, any contractors
or subcontractors with whom the prime contractor may enter into
contracts for the purpose of fulfilling its contractual
obligations in construction of the project and any other
contractors engaged by a project sponsor to provide architectural
or other design services, engineering services, construction
management services, other consulting services relating to the
design and construction of the project or any combination
thereof.
(3) The following provisions apply to premiums under a policy
of insurance { - or guaranty contract - } described in
subsection (2) of this section:
(a) A project sponsor or a prime contractor may not charge a
premium for coverage under a policy of insurance { - or a
guaranty contract - } to a contractor or subcontractor with whom
the project sponsor or prime contractor enters into a contract or
engages for services described in subsection (2) of this section.
(b) A prime contractor may not charge a project sponsor a
premium for coverage under a policy of insurance { - or a
guaranty contract - } other than a premium approved by the
Enrolled Senate Bill 559 (SB 559-A) Page 42
director under ORS chapter 737 prior to or at the same time as
the director approves the project to which the policy { - or
guaranty contract - } applies.
(c) Charging a premium prohibited by this subsection
constitutes the unlawful transaction of insurance in violation of
ORS 731.354.
(4) The director, upon application of any insurer, shall
approve the issuance of a policy of insurance { - or a guaranty
contract - } to any grouping of the persons described in
subsection (2) of this section if:
(a) The grouping was formed for the purpose of performing a
contract or a series of related contracts for the design and
construction of a project for the project sponsor;
(b) The project sponsor can reasonably demonstrate that the
formation and operation of the grouping will substantially
improve accident prevention and claims handling to the benefit of
the project sponsor and the contractors and workers employed by
the project sponsor on construction related projects;
(c) The established rating and auditing standards required by
authorized advisory organizations and rating organizations are
adhered to;
(d) The insurer for the grouping guarantees adequate protection
to any other insurance producer that demonstrates that without
such protection the producer will suffer losses that will
constitute a threat to the continuation of the business of the
producer;
(e) The insurer for the grouping guarantees insurance coverage
of the classes of insurance issued to the grouping to any
contractor who, because of participation in the group, has been
unable to maintain the contractor's normal coverage. The
insurer's obligation under this paragraph shall continue until 12
months after substantial completion of the contractor's work;
(f) By permitting this grouping for a project sponsor, greater
opportunities will be made available for historically
underutilized businesses to bid on the project;
(g) The project insurers agree to provide not less than 90
days' notice to all insured parties of the cancellation or any
material reduction in coverage for the project;
(h) The insurance coverage for the grouping contains a
severability of interest clause with respect to liability claims
between individuals insured under the group policy and includes
contractual liability coverage that applies to the various
contracts and subcontracts entered into in connection with the
project; and
(i) The insurer places with the Department of Consumer and
Business Services a special deposit of $25,000 per $100 million
of construction project value, or an amount prescribed by rule of
the director, whichever is greater.
SECTION 29. ORS 746.145 is amended to read:
746.145. (1) Notwithstanding ORS 737.600, but subject to all
other rate filing requirements of ORS chapter 737, an insurer may
combine for dividend purposes the experience of a group of
employers covered for workers' compensation insurance by the
insurer, subject to applicable rules adopted by the Director of
the Department of Consumer and Business Services, if:
(a) All the employers in the group are members of an
organization.
(b) The employers in the group constitute at least 50 percent
of the employers in the organization, unless the number of
covered workers in the group exceeds 500, in which case the
Enrolled Senate Bill 559 (SB 559-A) Page 43
employers in the group must constitute at least 25 percent of the
employers in the organization.
(c) The grouping of employers is likely to substantially
improve accident prevention, claims handling for the employers
and reduce expenses.
(2) This section does not apply to an organization of employers
for which organization a workers' compensation policy was
lawfully issued before October 4, 1977. The { - guaranty
contract - } { + policy + } required by ORS 656.419 shall
contain for each employer covered thereby the information
required by ORS 656.419 (2). When an employer becomes an insured
member of the organization the insurer shall, within 30 days
after the date insured membership commenced, file a notice
thereof with the director.
SECTION 30. ORS 656.440 is amended to read:
656.440. (1) Before revocation of certification under ORS
656.434 becomes effective, the Director of the Department of
Consumer and Business Services shall give the employer notice
that the certification will be revoked stating the grounds for
the revocation. The notice shall be served on the employer in the
manner provided by ORS 656.427 { - (3) - } { + (4) + }. The
revocation shall become effective within 10 days after receipt of
such notice by the employer unless within such period of time the
employer corrects the grounds for the revocation or appeals in
writing to the director. The director shall refer the request for
hearing to the Workers' Compensation Board for a hearing before
an Administrative Law Judge.
(2) If the employer appeals, the Hearings Division of the
Workers' Compensation Board under ORS 656.283 shall set a date
for a hearing, which date shall be within 30 days after receiving
the appeal request, and shall give the employer at least five
days' notice of the time and place of the hearing. A record of
the hearing shall be kept but it need not be transcribed unless
requested by the employer. The cost of transcription shall be
charged to the employer. Within 10 days after the hearing, the
Administrative Law Judge shall either affirm or disaffirm the
revocation and give the employer written notice thereof by
registered or certified mail.
(3) If revocation is affirmed on review by the Administrative
Law Judge, the revocation is effective five days after the
employer receives notice of the affirmance unless within such
period of time the employer corrects the grounds for the
revocation or petitions for judicial review of the affirmance
pursuant to ORS 183.480 to 183.497.
(4) If the revocation is affirmed following judicial review,
the revocation is effective five days after entry of the final
judgment of affirmance, unless within such period the employer
corrects the grounds for the revocation.
SECTION 31. { + Except as provided in section 32 of this 2007
Act, the amendments to ORS 654.097, 656.005, 656.039, 656.128,
656.210, 656.268, 656.407, 656.419, 656.423, 656.427, 656.440,
656.443, 656.447, 656.622, 656.628, 656.726, 656.730, 656.740,
656.850, 731.158, 731.475, 731.480, 731.590, 731.608, 731.628,
737.602 and 746.145 by sections 1 to 30 of this 2007 Act become
operative on July 1, 2009. + }
SECTION 32. { + The Director of the Department of Consumer and
Business Services may take any action before the operative date
of this 2007 Act that is necessary to enable the director to
exercise, on and after the operative date of this 2007 Act, all
Enrolled Senate Bill 559 (SB 559-A) Page 44
the duties, functions and powers conferred on the director by
this 2007 Act. + }
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Passed by Senate April 16, 2007
...........................................................
Secretary of Senate
...........................................................
President of Senate
Passed by House May 10, 2007
...........................................................
Speaker of House
Enrolled Senate Bill 559 (SB 559-A) Page 45
Received by Governor:
......M.,............., 2007
Approved:
......M.,............., 2007
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2007
...........................................................
Secretary of State
Enrolled Senate Bill 559 (SB 559-A) Page 46