Expansion of parental comp benefits in Maine unlikely to spreadPosted On: Jul. 3, 2019 7:00 AM CST
Maine will now provide full death benefits to parents of injured workers, whether or not they were dependent on their offspring, making the state the most lenient in survivor benefits for parents, according to experts.
But other states are expected to continue to require proof of parental dependency, meaning they are unlikely to follow Maine’s lead, experts say.
In Maine, parents will receive the same benefits as a dependent such as a spouse or child would starting in 2020, according to a bill signed into law on June 17. A legislative analysis said the change would raise workers compensation costs but did not provide a figure.
“It’s a little bit different,” said Elizabeth Smith, Portland, Maine-based counsel with Verrill Dana LLP, a firm that represents employers. “But (providing benefits to parents) isn’t without precedent across the country.”
A handful of states provide some form of death benefits for parents as a percentage of income, as with any indemnity benefits in workers comp, and most require proof that the parent was dependent on the worker, according to data provided to Business Insurance by the National Workers’ Compensation Defense Network, an alliance of comp defense attorneys that monitor legislation, among other objectives.
States that don’t require parents to meet that dependency bar — Louisiana and Hawaii, for example — limit what parents can receive. For example, Louisiana caps parental benefits at $75,000. Hawaii limits payment to 25% of what a dependent, such as a spouse or child, would receive.
A spokesman with the Chicago-based American Property Casualty Insurance Association confirmed in an email to Business Insurance that proving dependency is the standard when it comes to states that permit parental benefits and that “typically, survivor benefits are paid to individuals who were dependent on support from the deceased worker.”
The Maine law was part of a comprehensive workers compensation bill that raised indemnity for injured workers, among the contested issues that went through months of negotiations after the bill was introduced in February, leading to a string of bipartisan changes, according to Matthew Harmon, Portland-based senior vice president for the claims department with Maine Employers Mutual Insurance Co., which insures roughly two-thirds of employers in that state.
Lowering the bar for death benefits for surviving parents was one change that “flew under the radar” in a “contentious” bill, said Mr. Harmon. “I think it will become problematic when it goes into effect” in 2020, he added.
“I think when there is that first set of parents who received benefits who aren’t financially dependent, there will be some people scratching their heads as to what is going on,” he said.
MEMIC calculated that the benefit, which will provide parents two-thirds of the average weekly income of the deceased for up to 500 weeks, could amount to up to $518,000 over several years.
One scenario for death benefits that Mr. Harmon provided was that of a college graduate with no dependents who qualifies for the maximum indemnity and who dies while in the course and scope of work. “Any award should be based on a proven financial dependence” as in other states, he said.
It is unclear who pushed for the parental benefits change in Maine, and the bill’s sponsor did not return calls for comment.
Mike Fish, Birmingham, Alabama-based founding member for the comp defense firm Fish Nelson & Holden LLC and president of the National Workers Compensation Defense Network , said it’s unlikely that the language will spread to other states.
“In most states, you have to prove parental dependency,” which is a complicated process in his home state of Alabama, as it could include showing dependency on tax forms sent to the Internal Revenue Service or proof that a parent or parents were at least living with the deceased, he said.
Benefits are “wage replacement because of the injury or the death, and that’s why you had to show dependency in order to be awarded benefits,” said Ms. Smith, who thinks the law could be challenged in the courts.
“This bill was hard-fought, and it ended up being a compromise,” she said. “It is a change — and a drastic one — for Maine,” which had required parents to show proof of dependency before the new law, she wrote in a follow-up email to Business Insurance.