Big Changes Will Impact Workers’ Compensation Claims

Posted on: April 10th, 2017

Iowa’s workers’ compensation law will be changing significantly for injuries that occur after July 1, 2017.  We have summarized many of the changes below, but it will take some time, and perhaps Commissioner and Court guidance to fully determine how the changes will impact our claims.

We are here to help consult with you about a particular claim, or to discuss how to modify your procedures to reflect the new rules.

Please call Andy, Donna, or Anita with any questions.

The following is a summary of changes that were made to the Iowa Workers’ Compensation Act. These changes will go into effect on July 1, 2017. Therefore, work injuries occurring on or after July 1, 2017 will be subject to the new law.

Notice of Injury/Discovery Rule (85.23 and 85.26)

Iowa Code § 85.23 and Iowa Code § 85.26 were amended to further define “date of the occurrence of the injury” as “the date that the employee knew or should have known that the injury was work-related.”

Before the amendment, Iowa Courts had ruled that the 90-day time period for giving notice to the employer and the two-year statute of limitations period began when the worker knew his injury was “both serious and work-connected.

Successive Disabilities (85.34(7))

This section was amended to state that the “employer is liable for compensating only that portion of an employee’s disability that arises out of and in the course of the employee’s employment with the employer . . . .”

The section was further amended to include language that an “employer is not liable for compensating an employee’s preexisting disability that arose out of and in the course of employment from a prior injury with the employer, to the extent that the employer’s preexisting disability has already been compensated . . . .”

Intoxication (85.16(2)) 

If the employer shows an employee tests positive for any drugs or alcohol at the time of an accident or immediately thereafter, there is now a presumption the employee was intoxicated at the time of the injury and that the intoxication was a substantial factor in causing the injury. Once the employer has shown that an employee tested positive for drugs or alcohol, the burden of proof is on the employee to show that intoxication was not a substantial factor in causing the injury.

Permanent Partial Disability Benefits (85.34)

PPD benefits begin when it is medically indicated that the employee is at MMI and that the extent of loss or percentage of permanent impairment can be determined by use of the AMA Guides to Permanent Impairment. Thus, the benefits do not start upon return to work.

For scheduled member injuries, the extent of loss or percentage of permanent impairment shall be determined solely by utilizing the AMA Guides to Permanent Impairment. A deputy’s expertise or lay testimony shall not be considered.

Industrial Disability (85.34(2)(u))

The industrial disability analysis will now include the number of years in the future it was reasonably anticipated that the employee would work at the time of the injury (this will include retirement).

Industrial disability will not be required for an employee returns to work or is offered work for which the employee is paid the same or more.  If this occurs, the employee is entitled to only the functional impairment resulting from the injury. If an agreement for settlement or award is issued based on the employee’s return to work, and that employee is terminated later, the employee can seek an award of industrial disability in a review/reopening procedure.  Note that there is no statute of limitations for the employee to bring a request for review/reopening.

Permanent Total Disability (85.34(3))

Employees are now only entitled to PTD benefits until he or she is no longer permanently and totally disabled.  An employee forfeits his or her PTD benefits for weeks he or she receives gross earnings equal to or greater than 50% of the statewide average weekly wage. Furthermore, an employee is no longer entitled to compensation for PTD while receiving unemployment compensation. An employee cannot receive PTD and PPD benefits at the same time.

Temporary Benefits (85.33(3))

For remote workers, such as truck drivers, light duty work offered at the employer’s location where the employee has previously worked is now presumed to be suitable.

Employers are now required to communicate an offer of temporary work in writing, and the letter must include details of lodging, meals, and transportation. It also must state that if the employee refuses the offer of temporary duty work, he/she shall communicate in writing the reason for the refusal and will not be compensated unless the work refused is not suitable.

If the employee refuses the work because he or she believes the work to be unsuitable, the employee is required to communicate the refusal in writing to the employer stating the reason for the refusal.

Interest (Iowa Code § 535.3)

For interest on past due benefits, the rate is now set by the annual interest rate equal to the one-year treasury constant maturity rate plus two percent. Before the amendment, the rate was 10% per year.

Examination of Injured Employees (85.39)

The refusal of an employee to attend a medical exam results in a forfeit, rather than just a suspension, of the employee’s right to any compensation for the period of the refusal.

An employer is only liable to reimburse an employee for the cost of an independent medical exam if the injury is determined to be compensable.

Claimant Attorney Fees (86.39)

Claimant Attorneys cannot recover fees on the compensation voluntarily paid or agreed to be paid to an employee for temporary or permanent disability benefits. They can now only recover fees based off of the amount they can show would not have been paid but for their involvement.

Commutation (85.45)

Future payments can be commuted to present value lump sum payment “only upon application of a party to the commissioner and upon written consent of all parties to the proposed commutation or partial commutation . . . .”

Shoulders (85.34)      

Shoulder injuries are no longer considered industrial disabilities and are now categorized as scheduled member injury based off of 400 weeks.

Shoulder Rehabilitation (85.70)

An employee who has sustained an injury to the shoulder resulting in PPD who cannot return to gainful employment because of the disability, now has the right to be evaluated by the department of workforce development, and if deemed appropriate, referred to an area community college to receive new career vocational training. The employer or the employer’s insurer is required to pay financial support for participation in the program up to $15,000 for tuition, fees, and required supplies.

Jurisdiction (85.71(1)(a))

Iowa jurisdiction will now be limited to employees who work for an employer with a place of business in Iowa and who regularly work at or from that place of business.


Note: The Iowa Workers’ Compensation Commissioner has notified area attorneys that a review process is underway to determine if changes need to be made to Commission rules, forms, or petitions. Therefore, further changes to the process may be made.

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