Committee advances bill to restore retirement service credit for long-term workers' comp cases

Representative Carol McGuire opened the hearing on House Bill 216, saying the bill "fixes a glitch" that "deletes the requirement ... of 1 year of workers' compensation that is credited towards 1 retirement service" for workers severely injured on the job.

The bill would remove a current limit that bars more than one year of workers' compensation time from being counted as service credit for retirement calculations. McGuire and other sponsors told the committee the cap appears arbitrary and affects a very small number of employees who have prolonged, grievous injuries and repeatedly leave and return to work during multi‑year recovery.

Mark Kavanaugh, deputy counsel and compliance officer for the New Hampshire Retirement System, told the committee the Department of Labor does not compile the specific data needed to estimate how many workers remain on weekly indemnity benefits for more than a year. He said the fiscal-note actuary used a conservative, scalable starting assumption (a six‑month / 10% parameter) because the underlying labor data are not available. "Labor was unable to provide the information," Kavanaugh said, adding that the actuarial estimate can be scaled if committee members prefer a lower assumed incidence.

Kavanaugh described how workers' compensation payments are treated under the retirement system: weekly indemnity benefits paid by an insurer are not “earnable compensation,” so employees receiving only those benefits do not accrue service credit under current rules. He also explained that many long‑term cases are instead resolved through the system's accidental disability pension process, which can include lump‑sum settlements with workers'‑comp carriers and affects offsets.

Committee members asked whether the change would affect workers'‑comp insurance rates, how many people would be affected, and whether people would be incentivized to stay on benefits longer. Sponsors and retirement staff said they expect the fiscal impact to be small relative to the assumptions in the fiscal note, that the workers'‑comp claim determination process remains with labor, and that the bill changes only service‑credit treatment (not workers'‑comp eligibility or benefit levels).

In executive session the committee voted to recommend passage. The motion "ought to pass" was recorded as moved by Representative Brode and seconded on the floor; the roll call recorded 13 yes, 0 no, and the motion passed 13–0.

Why it matters: The change affects a narrow group of employees who are severely and persistently injured on the job and who would otherwise lose retirement service credit after one year of indemnity benefits. The committee and retirement staff flagged that state labor records do not readily provide the counts to size the bill's fiscal effect and recommended further review by finance.