On November 9, 2006 Pennsylvania Governor Edward G. Rendell signed Act 147 which amends the Workers’ Compensation Act of 1915. The Pennsylvania state House and Senate had unanimously passed this legislation. The notable amendments include:

1. Section 306 (h). Beginning January 1, 2007 a minimum compensation rate of $100 is established for all injuries occurring prior to August 31, 1993. This represents an increase of $10 per week. The increased payment will be made by the carrier or self-insured employer responsible for payment of compensation, however, will be reimbursed in advance by the Commonwealth on a quarterly basis.
   
2. Section 401.1. The Workers’ Compensation Judge must set a mandatory trial schedule at the first hearing held which must include establishment of specific deadlines for presentation of evidence. The schedule must be strictly adhered to with deviations from the schedule permitted only for “good cause.”
   
   The trial schedule will include a specific date and time for a mediation conference. That must take place no later than 30 days before the date set for filing Briefs. If, however, the WC Judge determines mediation would be futile the requirement can be waived. The mediation conference will be conducted by a Workers’ Compensation Judge, but not necessarily the Judge assigned to the case. The mediation conference must be attended (either in person or by teleconference) by all parties. The parties must further have the authority to act on settlement proposals either at the mediation or “within a reasonable time after the mediation” as established by the Judge.
   
   The office of adjudication must create a “resolution hearing procedure” to expedite a hearing on a Compromise and Release such that the Compromise and Release hearing is held within 14 days of notice of the settlement. There is no longer the need for formal assignment from the Bureau of a Compromise and Release petition. A decision on the Compromise and Release must be rendered within five business days of the hearing.
   
3. Section 401.2. The makeup of the Workers’ Compensation Appeal Board is established. It shall consist of at least three, but not more than 15 members, appointed by the Governor. No Board action will be valid unless a majority of votes cast support the outcome. The internal operating procedures for how Opinions are to be assigned and written are codified. The members of the Workers’ Compensation Appeal Board are also now required to attend eight hours of workers’ compensation education each year. They are also now held to a code of ethics.
   
4. Section 414. The Department is precluded from assigning to any one Workers’ Compensation Judge more than 75 percent of the petitions in a particular county.
   
5. Section 426. This had provided for a rehearing before the Workers’ Compensation Appeal Board within 18 months of their decision being rendered. This provision has been eliminated.
   
6. Section 442. In Compromise and Release settlements counsel fees are limited to 20 percent of the settlement amount.
   
7. Article XVI is added to the Act and establishes an Uninsured Employers Guaranty Fund. This fund is established for the purpose of paying a claim brought under the Workers’ Compensation Act or Occupational Disease Act where the employer liable for payment has failed to insure or self-insure its liability at the time of the injury. It will be funded by assessments against insurers and self-insured employers in an amount not to exceed .1 percent of total compensation paid by all insurers or self-insured employers during the previous calendar year. The fund will have the same rights, duties, responsibilities and obligations as an insurer, however, shall not be considered an insurer such that it would be subject to penalties, unreasonable contest attorney’s fees or any reporting and liability requirements under Section 440 of the Act.
   
   A claimant is directed to notify the fund within 45 days after the claimant knew that the employer was uninsured. From there the statute provides that the Department shall have adequate time to monitor the claim and determine the obligations of the employer. Compensation benefits will not be paid from the fund until notice is given and the Department determines that the employer failed to voluntarily accept and pay the claim or subsequently defaulted on payments of compensation. A claim petition cannot be filed against the fund until at least 21 days after notice of the claim is made to the fund. After notice is given the fund will process the claim, that is, either pay or defend in accordance with the provisions of the Act. The failure of an uninsured employer to answer a claim petition will not serve as an admission or otherwise bind the fund pursuant to Section 416. The fund, therefore, will not be subject to Yellow Freight sanctions. The fund is charged with investigating the insurance status of the employer and if the employer does not provide proof of insurance within 14 days of the fund’s request there will be a rebuttal presumption of uninsurance.
   
   The Department of Labor and Industry is directed to pursue all remedies at law against the uninsured employer to collect payments made on their behalf. The department is also empowered to investigate violations of Section 305, which requires employers carry worker’s compensation insurance, for prosecution of the uninsured employer and must pursue those prosecutions through coordination with the appropriate prosecuting authority. Any restitution obtained is paid back to the fund. Notwithstanding the establishment of this fund to pay compensation benefits, a claimant is still free to bring a suit for damages at law against the uninsured employer. Additionally, the fund is entitled to assert rights to subrogation under Section 319 for recovery made from the employer or any other third party for payments it may have made.

The amendments pertaining to establishment of a mandatory trial schedule and mandatory mediation take effect immediately. The establishment of the Uninsured Employers Guaranty Fund also takes effect immediately and the remainder of the amendments will take effect as of January 9, 2007. We anticipate that the Bureau will promulgate additional regulations particularly with regard to the scheduling and conduction of the mandatory mediation conferences. We will look forward to further updates in that regard. We welcome the opportunity to discuss these amendments with you. If you have any specific questions please feel free to contact us and we will continue to keep you apprised of further developments.