NH House bill seeks tougher penalty for delayed workers’ comp checks
Measure would double amount if payment to injured worker is delayed
Insurance companies that are late sending out a workers’ compensation check should pay more than a fine – in fact, they should double the delayed payment owed to the injured worker.
So says House Bill 1451, which was introduced last week to the House Labor, Industrial and Rehabilitative Services Committee.
The number of late checks may be small, but it is a big “financial hardship” for those who are already getting by on 60 percent of their wages, testified John A. Wolkowski, a workers’ compensation attorney from Manchester.
Most insurers make their payments on time, but there “are certain entities, not necessarily insurance companies, that are notorious,” he said. Payments can be delayed for weeks, even more than a month, he said.
Low-wage workers can end up missing car payments or fall behind on their rent. Even one well-off construction worker he knew committed himself to some big expenses before he was unexpectedly injured and fell behind on his mortgage payments and had to dip into his 401(k) in order to keep a roof over his head because of an untimely payment.
Under current law, insurance companies face a $2,500 fine for a late payment, but that goes to the state treasury. “It should go directly to the people who are hurt,” said Wolkowski.
The bill’s sponsor, Rep. Herb Richardson, R-Lancaster, was one of those recipients who waited for a check. “If I had a doctor’s appointment I wouldn’t get paid that week because they were figuring I was getting cleared for work,” Richardson said.
Richardson is also sponsoring HB 1508, which would increase workers’ compensation payments to two-third of the worker’s former pay to put the percentage in line with other states. A hearing on that bill is scheduled for Wednesday.
‘Very high barrier’
Meanwhile, HB 1451 would penalized insurance companies that “willfully and without good cause fail to make a timely payment” and would require a hearing before imposing the law.
Only Ryan Hale, lobbyist from the NH Automobile Dealers Association, spoke against the bill. Hale argued that a $2,500 fine was incentive enough to pay on time, and the Department of Labor could always pull a license of a “bad actor.” Doubling the claims payout could result in a greater compensation expense that could push up premiums, he said.
Hale stressed that the association wasn’t a bad actor, but “we are concerned if we make a mistake and the state is overzealous.”
The Labor Department rarely imposes the full $2,500 fine, preferring to correct the problem and not punish the offender, said Rudolf Ogden, a department attorney.
He said that, with language like “willfully,” that is setting a “very high barrier” against a company to pay out extra indemnity to a worker, and he doubted that the expense would be high enough to affect premiums.