OLR Bill Analysis

HB 6683 (as amended by House “A”)*

AN ACT CONCERNING THE RESOLUTION OF CLAIMS INVOLVING WORKERS' COMPENSATION LIENS.

SUMMARY:

By law, an injured employee eligible for workers' compensation benefits can sue someone who is liable for damages for the injury except for an employer who complies with the workers' compensation law or another employee. An employer who has paid or is obligated to pay workers' compensation benefits to the employee can also sue or join an employee's lawsuit in order to be reimbursed for benefits paid. If the employer and employee are both plaintiffs and recover damages, they are apportioned so that the employer's claim takes precedence, after deductions for reasonable and necessary expenses including attorneys' fees incurred by the employee.

Under the bill, if the employee brings the action, the employer's claim is reduced by one-third of the amount to be reimbursed to the employer. But the reduction does not apply if reimbursement is to the (1) state or a political subdivision as the employer or (2) Second Injury Fund custodian.

By law, an employer, its insurance carrier, or the Second Injury Fund paying benefits to an injured employee has a lien on any judgment or settlement the employee receives if they provide notice of the lien before judgment or settlement.

*House Amendment “A” eliminates a formula to calculate the reduction to the employer's claim; sets the reduction at one-third which the bill previously set as a maximum; adds the exception for the state, political subdivisions, and Second Injury Fund; and eliminates a provision that the employer's right of reimbursement does not attach until the employee possesses and controls the proceeds.

EFFECTIVE DATE: October 1, 2009

BACKGROUND

Second Injury Fund

The Second Injury Fund provides workers' compensation insurance coverage to workers whose employers failed to provide it. By law, the Second Injury Fund custodian can also sue or join an employee's lawsuit.

COMMITTEE ACTION

Judiciary Committee

Joint Favorable

Appropriations Committee

Joint Favorable