A bill under consideration in the Arkansas Senate may hint at a trend toward capping the duration of disability benefits for permanently disabled workers.

The legislation seeks to place a 450-week limit on weekly permanent total disability workers compensation benefits paid to Arkansas workers and their dependents.

House Bill 1586, introduced by Rep. John Payton, R-Wilburn, was approved by the Arkansas House of Representatives Monday after earlier failing to garner the 68 votes it needed to pass. The failed vote was expunged Feb. 22 and the bill then passed by a vote of 68-19 on its third reading. The Committee on Public Health, Welfare and Labor at the Arkansas Senate is now considering the bill.

Most states do not cap PTD benefits, although a few have imposed some limitations, according to 2016 data provided by the Cambridge, Massachusetts-based Workers Compensation Research Institute. Several states cut PTD benefits off when a disabled worker reaches retirement age and qualifies for Social Security retirement benefits, including Florida, Kentucky, Minnesota, North Dakota, Oklahoma and Tennessee. Three states and the District of Columbia cap PTD benefits but include provisions that allow injured workers to petition for an extension, including Michigan (800 weeks), North Carolina (500 weeks) and Wyoming (80 months). Three states have absolute caps on PTD benefits, including Indiana (500 weeks), Mississippi (450 weeks or $210,883.50 total) and South Carolina (500 weeks).

The Arkansas PTD term limit proposal follows the state’s decision to phase out its Death and Permanent Total Disability Trust Fund in 2019. The fund, administered by the Arkansas Workers’ Compensation Commission and funded by a tax on comp insurers and self-insured businesses, pays weekly benefits to permanently disabled workers and their dependents after the insurer has paid $215,000 of indemnity compensation. Last year, Arkansas legislators voted to address the fund’s $130 million in unfunded liabilities by closing the fund to new claims, shifting the responsibility for PTD payments to employers and insurers.

The 450-week cap initially could result in a decrease in loss costs of less than 1%, according to an analysis of the bill prepared by Terri Robinson, state relations executive at Boca Raton, Florida-based National Council of Compensation Insurance Inc. Once the trust fund closes, however, the proposed term limit could largely offset the estimated loss cost increase of between 3.6% and 4.6% to pre-fund indemnity benefits, the analysis says.

Jessica Akers, secretary-treasurer of the Arkansas AFL-CIO based in Little Rock, said the bill is an egregious attempt to push injured workers into the overburdened federal Social Security disability system and shift the responsibility for compensating injured workers to taxpayers. 

“The requirements for the state workers compensation program and the federal Social Security disability system don’t align,” Ms. Akers said. “The state legislature cannot guarantee that these families will qualify for disability.”

Ms. Akers noted that six in 10 Social Security disability claims are initially denied, and claimants are subjected to a waiting period if benefits are granted. 

Limits on PTD and temporary total disability benefits have been a hot topic in recent years. In a high-profile case last year, Florida’s Supreme Court ruled that the state’s 104-week temporary TTD benefit statute was unconstitutional after a St. Petersburg firefighter and paramedic exhausted his TTD benefits but was not yet eligible for PTD. That ruling is part of an ongoing controversy in the state surrounding a sizeable increase in comp rates.