BILL ANALYSIS

C.S.H.B. 2089

By: Smithee

State Affairs

Committee Report (Substituted)

BACKGROUND AND PURPOSE

In the past, the workers' compensation division of the Texas Department of Insurance has interpreted state law relating to workers' compensation as providing that a claimant is entitled to only those benefits afforded by the law. However, in an effort to ensure the prompt payment of benefits, overpayments and underpayments occasionally occur, which the law does not specifically address.

Recently, appeals panels have taken a narrow approach to overpayments, requiring a specific statutory provision or rule permitting recoupment. In practice, carriers are essentially limited to recouping benefits when the average weekly wage was not properly reported. Under the appeals panels' current analysis, a carrier has difficulty recouping the overpayment of benefits, even when such an overpayment was made as a result of the injured worker's failure to inform the carrier that the worker has been working and earning wages since the worker's injury.

C.S.H.B. 2089 seeks to remedy this situation by requiring the commissioner of workers' compensation to establish procedures providing for the timely and accurate payment of workers' compensation income benefits and the resolution of overpayments and underpayments of such benefits.

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is expressly granted to the commissioner of workers' compensation in SECTIONS 2 and 3 of this bill.

ANALYSIS

C.S.H.B. 2089 amends the Labor Code to specify that an employee's entitlement to income benefits as provided by provisions of law governing workers' compensation benefits applies to timely and accurate income benefits. The bill requires the commissioner of workers' compensation, by rule, to establish a procedure by which an insurance carrier is authorized to recoup an overpayment of income benefits from future income benefit payments that are not reimbursable under provisions of law relating to overpayment reimbursement from the subsequent injury fund and by which an insurance carrier is required to pay an underpayment of income benefits, including interest on accrued but unpaid benefits, in accordance with the Texas Workers' Compensation Act. The bill requires such a procedure to include the following:

· a process by which an injured employee is authorized to notify the insurance carrier of an underpayment;

· the time frame and methodology by which an insurance carrier is required to pay to an injured employee an underpayment;

· a process by which an insurance carrier is required to notify an injured employee of an overpayment of income benefits;

· the time frame and methodology by which an insurance carrier is authorized to recoup an overpayment through the reduction of a future income benefit payment; and

· a method for coordinating overpayments that may be recouped from future income benefits and reimbursements required by provisions of law relating to overpayment reimbursement by the subsequent injury fund.

C.S.H.B. 2089 requires the procedure established by the commissioner for recouping overpayments of income benefits from future income benefit payments to take into consideration the cause of the overpayment and minimize the cost to the injured employee. The bill requires the commissioner of workers' compensation, not later than January 1, 2012, to adopt rules to implement the bill's provisions.

EFFECTIVE DATE

September 1, 2011.

COMPARISON OF ORIGINAL AND SUBSTITUTE

C.S.H.B. 2089 differs from the original by requiring the commissioner of workers' compensation, by rule, to establish a procedure by which an insurance carrier is authorized to recoup an overpayment of income benefits and is required to pay an underpayment of income benefits, whereas the original requires the commissioner, by rule, to establish a procedure to require an overpayment of income benefits to be recouped and to require an underpayment of income benefits to be paid in a future payment.

C.S.H.B. 2089 differs from the original by specifying that the procedure required to be established by the commissioner authorizing the recoupment of an overpayment of income benefits applies to future income benefit payments that are not reimbursable under certain provisions of law, whereas the original contains no such specification. The substitute differs from the original by requiring an insurance carrier to pay an underpayment of income benefits in accordance with the Texas Workers' Compensation Act, whereas the original requires such an underpayment to be paid in a future income benefit payment. The substitute differs from the original by specifying that the underpayment of income benefits that an insurance carrier is required to pay includes interest on accrued but unpaid benefits, whereas the original contains no such specification.

C.S.H.B. 2089 contains a provision not included in the original requiring the procedure established by the commissioner to include a method for coordinating overpayments that may be recouped from future income benefits and reimbursements. The substitute contains a provision not included in the original requiring the procedure for recouping overpayments of income benefits from future income benefit payments to take into consideration the cause of the overpayment and to minimize the cost to the injured employee. The substitute differs from the original in nonsubstantive ways.