WSI seeks statutory clarifications on compensable mental injuries and benefits cap in SB 2109; opponents warn of narrowed access for injured workers

Workforce Safety and Insurance representatives asked the House Industry, Business and Labor Committee to amend state statutes to clarify compensability standards for mental and psychological conditions and to adjust a series of benefit limits and administrative procedures.

"Clarity eliminates most litigation and allows the agency to fairly and consistently administrate benefits," Tim Wallene, chief of injury services at WSI, told the committee while explaining the provisions of engrossed Senate Bill 21‑09.

Nut graf: SB 21‑09 would (1) incorporate language into statute that WSI previously carried as an administrative rule to define when a mental or psychological condition is a compensable injury, (2) require actual lost earnings rather than an abstract loss of earnings capacity to trigger disability benefits in some reapplication cases, (3) authorize WSI to deliver dispute decisions by electronic means once its technology systems allow, and (4) raise several benefit caps — including increasing the death indemnity cap from $300,000 to $400,000 and indexing that cap by $10,000 every odd‑numbered year. WSI said the changes respond to a recent North Dakota Supreme Court decision and reduce future litigation; injured‑worker advocates said the statutory changes would make legitimate claims harder to prove and urged the committee to remove the new limiting language.

WSI explained the changes as a response to a court decision that invalidated an administrative rule that the agency used to apply the statute. Wallene said North Dakota law already requires that a compensable mental condition be caused by a physical injury and that the physical injury be "determined with reasonable medical certainty to be at least 50% of the cause of the condition as compared with all other contributing causes combined." He told the committee that the administrative rule had clarified the agency's application of that standard by requiring objective medical evidence that a mental condition is the physiologic product of the physical injury (for example, brain trauma, suffocation or poisoning), and by listing emotional stressors and other non‑physiologic contributors that would not be compensable. Wallene said legislators should adopt that rule language into statute to restore clarity following the Riley decision and to avoid litigation that would otherwise sort the standard by case law.

WSI also described other changes in SB 21‑09: updating the statutory definition of "electronic means" to allow electronic delivery of appealable decisions once the agency's systems support it; increasing the statutory cap on indemnity payments to survivors from $300,000 to $400,000 with a $10,000 increase every odd‑numbered year; and raising the annual scholarship maximum for dependents of catastrophically injured workers from $10,000 to $12,500.

Opponents urged caution. Jackie Hall, executive director of the North Dakota Association for Justice, said the Supreme Court's January 2025 Riley decision rejected WSI's administrative rule as an overreach and restored a claimant‑friendly reading of the statute. Hall told the committee the bill would effectively codify the now‑rejected administrative standard and could prevent legitimately compensable psychological claims from moving forward. She cited one Supreme Court reversal — a delivery driver who became a quadriplegic and alleged an adjustment disorder with depression — as an example of the court siding with claimants where the agency's administrative rule had denied benefits.

"Senate Bill 21‑09 looks to take the administrative interpretation of the statute that did not approve the mental disability and make it law after this decision," Hall said, urging the panel to remove the proposed limiting language on compensable psychological conditions.

Committee members pressed both sides on details. Representatives asked how WSI would measure the "50 percent of the cause" threshold and whether the agency or the injured worker bears the burden of proof. Wallene said the statutory framework requires claimants to support their entitlement to benefits with medical evidence and that objective medical records (imaging, prior treatment notes, medication records) inform the agency's comparative causation assessment. He acknowledged the court's role and said the proposed statutory language would change the law the court must interpret going forward.

Wallene and several supporter witnesses said many changes in the bill are clarifying and were vetted with stakeholder groups, including employer organizations, which favored eliminating ambiguity that can produce litigation and increase fund costs. Opponents and some committee members said the proposal should not be rushed: they urged leaving the statute aligned with the Supreme Court's recent ruling or removing the portions that narrow the definition so injured workers retain access to appealable review.

No final committee action on SB 21‑09 is recorded in the hearing transcript provided. The bill provoked detailed technical questions about medical causation, administrative practice and the balance between reducing litigation and protecting claimants' access to benefits.