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Nebraska Workers’ Compensation Update

The State of Nebraska has recently amended its Workers’ Compensation Act in two significant ways that will affect your handling of claims.

These amendments include changes with electronic payment of benefits in workers’ compensation and lump sum settlements.

Electronic Payment – Neb. Rev. Stat. 48-125

An amendment to Neb. Rev. Stat. 48-125 will allow for electronic payment of benefits in workers’ compensation. Effective July 19, 2018, employers and their carriers can form an agreement with an injured worker for payment of compensation to be made by direct deposit, prepaid card, or similar electronic payment system. Those methods of payment can be used for periodic or lump sum payments.

Payment of benefits electronically is purely optional for employers and their carriers. You may request that the injured worker choose between direct deposit, prepaid card, or a similar electronic payments system as the method of payment, but you do not have to offer those choices and can continue to send payments by paper checks through the mail.

The injured worker can reject the offer of electronic payment and choose to receive compensation by paper checks through the mail. If the injured worker does not respond to the offer of electronic payments, the employer and its carrier can elect the method of payment.

The statute provides that any fees or charges relating to payment by direct deposit, prepaid care, or a similar electronic payment system shall be disclosed to the injured worker, but does not indicate who pays those fees and charges. We anticipate you will not be allowed to pass on any such fees or charges, but that the injured worker will be responsible for any fees or charges assessed by their own bank. Employers and their carriers must comply with the requirements of 12 C.F.R. part 1005, as such part existed on April 1, 2018, that being the federal law pertaining to electronic fund transfers.

We anticipate that injured workers and their attorneys will often times request electronic payment of benefits to avoid the delay and uncertainty that sometimes attaches to payments by paper checks through the mail. We encourage you to determine now whether you will offer electronic payment of benefits, and to put in place procedures that will allow for such payments if you choose to do so.

Lump Sum Settlements – Neb. Rev. Sat. 48-139

An amendment was also made to Neb. Rev. Stat. 48-139 and pertaining to the court’s approval of Applications for lump sum settlements. This new law also goes into effect on July 19, 2018, and will allow for approval of settlements that do not include payment of all outstanding medical expenses. This will make it easier for you to settle doubtful and disputed claims without paying disputed medical expense. The Nebraska Workers’ Compensation Court has historically been extremely reluctant to approve a settlement that leaves medical expenses unpaid.

The new law provides that in cases where medical bills remain unpaid, it shall be conclusively presumed that the lump sum settlement is in conformity with the compensation schedule and for the best interests of the injured worker if his/her attorney affirms as much in the settlement Application. As written, it appears the court will continue to insist that Medicaid be reimbursed for payments made on the claim as a term of settlement.

Please do not hesitate to contact us if you have any questions regarding these amendments to the Nebraska Workers’ Compensation Act.