Vilsack Signs Bill to Allow Apportionment of Iowa Workers’ Comp Claims

In a one-day special session, the Iowa Legislature passed a controversial economic stimulus package and reforms that insurers have argued will help reduce workers compensation costs. Gov. Tom Vilsack, a Democrat, signed the economic development plan in Senate File 2311 and the workers compensation revisions in House File 2581.

The special session stemmed from an Iowa Supreme Court ruling in June that stated Vilsack exceeded his line item veto authority last year when he vetoed portions of legislation dealing with economic development, the tax code, and the workers’ compensation system. The court’s ruling had the effect of vetoing the entire law. Since June lawmakers have been working to resolve their differences on these issues.

The legislation reverses a 2002 Iowa Supreme Court ruling in the case of Venegas v. IBP, which eliminated apportionment in workers’ compensation claims and could have potentially allowed employees to collect twice for the same injury.

The bill bans double recoveries and double reductions in comp benefits for permanent partial disability, and includes increased penalties and fines for noncompliance.

In addition to reversing the Venegas decision and implementing stiff penalties, HF2581 codifies the use of loss of earning capacity to determine unscheduled permanent partial disability, clarifies the employer’s responsibility for the cost of medical care that the employer directs when it is determined that the claim will not be compensated, and increases the weekly allowance during rehabilitation.