PRINTER'S NO. 1142
No. 975 Session of 2001
INTRODUCED BY D. WHITE, LAVALLE, WAGNER, KUKOVICH, PICCOLA,
COSTA, TOMLINSON, ORIE, TARTAGLIONE, WOZNIAK, M. WHITE,
BOSCOLA, BODACK, ROBBINS, JUBELIRER AND BRIGHTBILL,
JUNE 11, 2001
REFERRED TO LABOR AND INDUSTRY, JUNE 11, 2001
AN ACT
1 Amending the act of June 2, 1915 (P.L.736, No.338), entitled, as
2 reenacted and amended, "An act defining the liability of an
3 employer to pay damages for injuries received by an employe
4 in the course of employment; establishing an elective
5 schedule of compensation; providing procedure for the
6 determination of liability and compensation thereunder; and
7 prescribing penalties," further providing for the Workmen's
8 Compensation Administration Fund, for the definition of
9 "defaulted self-insurer" and for the Prefund Account.
10 The General Assembly of the Commonwealth of Pennsylvania
11 hereby enacts as follows:
12 Section 1. Section 446(a) of the act of June 2, 1915
13 (P.L.736, No.338), known as the Workers' Compensation Act,
14 reenacted and amended June 21, 1939 (P.L.520, No.281) and added
15 February 2, 1976 (P.L.2, No.2), is amended to read:
16 Section 446. (a) There is hereby created a special fund in
17 the State Treasury, separate and apart from all other public
18 moneys or funds of this Commonwealth, to be known as the
19 Workmen's Compensation Administration Fund. The purpose of this
20 fund shall be to finance the Prefund Account established in
1 section 909(a) and the operating and administrative expenses of
2 the Department of Labor and Industry, including the Workmen's
3 Compensation Appeal Board and staff, but not the State Workmen's
4 Insurance Fund, in the direct administration of The Pennsylvania
5 Workmen's Compensation Act and The Pennsylvania Occupational
6 Disease Act including:
7 (1) wages and salaries of employes for services performed in
8 the administration of these acts;
9 (2) reasonable travel expenses for employes while engaged in
10 official business; and
11 (3) moneys expended for office rental, equipment rental,
12 supplies, equipment, repairs, services, postage, books, and
13 periodicals.
14 * * *
15 Section 2. The definition of "defaulted self-insurer" in
16 section 901 of the act, amended June 22, 2000 (P.L.390, No.53),
17 is amended to read:
18 Section 901. The following words and phrases when used in
19 this article shall have the meanings given to them in this
20 section unless the context clearly indicates otherwise:
21 * * *
22 "Defaulted self-insurer" means an employer, other than the
23 Commonwealth and its political subdivisions, that is exempted by
24 the Department of Labor and Industry from the requirement to
25 insure its liability under this act or under section 305 of the
26 act of June 21, 1939 (P.L.566, No.284), known as "The
27 Pennsylvania Occupational Disease Act," for claims on injuries
28 or exposures to the hazard of disease which occurred prior to
29 October 30, 1993, and which has failed to pay that liability due
30 to its financial inability or due to its filing for bankruptcy
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1 or being declared bankrupt or insolvent.
2 * * *
3 Section 3. Section 909 of the act, added June 22, 2000
4 (P.L.390, No.53), is amended to read:
5 Section 909. (a) There is established in the Self-Insurance
6 Guaranty Fund a restricted account known as the Prefund Account.
7 [The department shall annually transfer up to one million six
8 hundred thousand dollars ($1,600,000) of accumulated interest in
9 the Workmen's Compensation Administration Fund to the account.]
10 The department shall annually transfer from the Workmen's
11 Compensation Administration Fund to the account an amount up to
12 three million eight hundred thousand dollars ($3,800,000), but
13 not exceeding the sum of all claims for benefits payable under
14 subsection (c).
15 [(b) Accumulated interest in the Workmen's Compensation
16 Administration Fund is specifically appropriated to the
17 department on a continuing basis in such amounts as are
18 necessary for the purpose of this section. The secretary shall
19 have the power to dispense and disburse accumulated interest in
20 the Workmen's Compensation Administration Fund under this
21 section.]
22 (c) Transfers to the account pursuant to subsection (a)
23 shall be used to pay claims for loss of wages occurring or
24 medical treatment provided after the effective date of this
25 section under sections 306(a), (b), (c) and (f.1) and 307 of
26 this act or under sections 306(a), (b) and (c) and 307 of the
27 act of June 21, 1939 (P.L.566, No.284), known as "The
28 Pennsylvania Occupational Disease Act," to a prefund claimant
29 upon exhaustion of the security posted by the liable defaulted
30 self-insurer: Provided, That:
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1 (1) the benefits are payable under a notice of compensation
2 payable, an agreement for compensation or a petition for
3 compensation and the petition, notice or agreement was filed
4 with the department before January 1, 1997;
5 (2) payments from the account are not used to pay interest,
6 penalties or attorney fees related to the payment of benefits;
7 (3) payments from the account are used to pay claims for
8 benefits relating to medical treatment under section 306(f.1) of
9 this act that are not covered or not paid for, in whole or in
10 part, by other types of insurance or Federal, State or private
11 benefit programs;
12 (4) this section shall not be construed to require payment
13 of claims for benefits when transfers to the account pursuant to
14 subsection (a) are insufficient to satisfy claims for benefits
15 by prefund claimants except to the extent required by subsection
16 (e)(1); and
17 (5) the receipt of benefits under this section is subject to
18 the law in effect as of the effective date of this section and
19 not the date of an award from a petition, a notice of
20 compensation payable or an agreement for compensation.
21 (d) When payments are made from the account on behalf of a
22 defaulted self-insurer, the department assumes the rights and
23 obligations of the defaulted self-insurer under this act and
24 "The Pennsylvania Occupational Disease Act" with regard to the
25 payment of claims. The department shall have the right to:
26 (1) Initiate and prosecute legal action against the
27 defaulted self-insurer to require the payment of benefits under
28 this act or "The Pennsylvania Occupational Disease Act."
29 (2) Obtain, in any manner or by use of any process or
30 procedure, including the commencement and prosecution of legal
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1 action, reimbursement from a defaulted self-insurer and its
2 successor, assigns and estate of all payments from the account
3 to its prefund claimants, including reimbursement of all claims
4 for benefits paid as well as reasonable administrative and legal
5 costs associated with the payment.
6 (e) The following shall apply:
7 (1) If the department projects that the aggregate payments
8 to prefund claimants pursuant to this section during any one
9 fiscal year may exceed the transfer to the account for that
10 year, the secretary shall order the payment of benefits under
11 sections 306(a), (b) and (c) and 307 at a percentage of the full
12 amounts payable under this act and "The Pennsylvania
13 Occupational Disease Act." The percentage shall be uniformly
14 applied to all benefits under those sections paid during that
15 fiscal year. The secretary shall adjust that percentage from
16 time to time as is necessary based on updated projections on
17 payment of benefits.
18 (2) To take action under paragraph (1), the department must
19 provide a minimum of sixty (60) days' notice to the General
20 Assembly of the impending action. The notice must be in the form
21 of a written report of the pending funding shortfall to the
22 chairpersons and the minority chairpersons of the Appropriations
23 Committee and the Labor and Industry Committee of the Senate and
24 the chairpersons and the minority chairpersons of the
25 Appropriations Committee and the Labor Relations Committee of
26 the House of Representatives. The General Assembly may
27 appropriate sufficient funds to the account to continue full
28 payment of benefits to prefund claimants for that fiscal year.
29 (f) A prefund claimant shall within three years of the
30 effective date of this section or within three years of last
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1 receiving benefits from a defaulted self-insurer or its
2 security, whichever occurs later, forward to the department an
3 application for benefits that includes all of the following:
4 (1) Name of the prefund claimant.
5 (2) The prefund claimant's Social Security number.
6 (3) The department claim number of the claim for which
7 benefits are requested, if known.
8 (4) The prefund claimant's date of birth.
9 (5) The date of injury giving rise to the claim.
10 (6) The name of the employer at the time of injury.
11 (7) If known, the date of receipt of the last payment from
12 the defaulted self-insurer or its security.
13 (8) The amount of current wages from current employment or
14 self-employment.
15 (9) A signature certifying that the request for benefits is
16 true and correct and that the prefund claimant is aware of the
17 penalties provided by law for making false statements for the
18 purpose of obtaining benefits.
19 (10) Any other information required by the department that
20 is relevant in determining the entitlement to or amount of
21 benefits.
22 (g) Nothing in this section shall be construed to require
23 the department to make wage loss payments to an individual who
24 is currently receiving wages equal to or in excess of the
25 benefit they would receive under this section. Nothing in this
26 section shall be construed to require the department to make a
27 wage loss payment that would result in an individual receiving
28 more in wages and compensation combined than his pre-injury
29 wage.
30 (h) Applications and other information submitted to the
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1 department under this section and section 305 shall not be
2 public records for purposes of the act of June 21, 1957
3 (P.L.390, No.212), referred to as the Right-to-Know Law, and
4 shall not be subject to public disclosure.
5 Section 4. This act shall take effect July 1, 2001.
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