Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Workers Compensation topic
No spam. Unsubscribe anytime.
Senate committee advances bill to restore employer subrogation rights, cap recovery at half of third-party awards
Summary
The Senate Public Health, Welfare and Labor Committee voted to pass SB 530, which would clarify employers' subrogation rights in third-party liability settlements and allow employers or carriers to recover up to half of a claimant's third-party recovery. Supporters say it prevents "double recovery"; opponents say it risks further shortchanging injured workers.
Senator Dave Wallace, sponsor of SB 530, told the Public Health, Welfare and Labor Committee that the bill is meant to "level the playing field" when injured workers recover from a third party and employers seek reimbursement for medical bills and lost wages already paid under workers' compensation. "This work comp bill is about leveling the playing field," Wallace said during his presentation.
Attorney Guy Wade, who represents employers, told the committee current Arkansas caselaw has effectively stripped employers of statutory subrogation rights under the "made whole" doctrine and that SB 530 would restore a statutory entitlement, capped at one-half of a claimant's recovery. "So really what we're asking is that you restore the ability to be able to make those recoveries and prevent a double recovery," Wade said, arguing the bill would not reduce workers' comp benefits.
Supporters from self-insured employers described the financial strain of absorbing full costs for injuries caused by third parties. Kent Eddy of Wayne Smith Trucking said his self-insured fund cannot currently recover such losses and that a serious at-fault collision has kept their premiums high. Karen McKinney, representing the Arkansas Self-Insured Association, said the change would allow recovery "up to 1 half of what that claimant got," and emphasized the injured worker would be paid first under the bill's lien structure.
Union and plaintiff-side witnesses pushed back. Alan Hughes of the Arkansas AFL-CIO said the workers' compensation system exists to protect injured workers and warned that allowing employers to take from third-party settlements risks taking money from victims who already have lost wages and long-term capacity: "When you start opening the door and taking money from them, this is not what the intention of workers' comp was," Hughes said.
Meredith Moore, a plaintiffs' attorney who handles third-party settlements, told senators she regularly negotiates liens and that judicial and administrative processes currently address fairness. "This bill puts the actual injured worker second in line, and that's just not how it should be," Moore said.
Committee members asked staff and witnesses to clarify the interplay between the statutory 66 2/3 percent temporary wage benefit and third-party recovery practices. The sponsor said the bill would reassert a statutory lien in order to avoid "double recovery" while reducing the employer's share from two-thirds to one-half.
After questions and an extended public-comment period featuring employers, insurers, unions and individual injured workers, the committee moved to a roll-call and recorded a majority in favor. The chair declared the motion carried and that the bill passes the committee.
Next steps: SB 530 will proceed to the full Senate calendar for consideration.
