Counties Resist Costly Changes, Removal of Offsets to Workers' Compensation Benefits

On February 21, 2023, Associate Policy Director Brianna January testified before the Senate Finance Committee in opposition to SB 0377 – Workers’ Compensation – Benefits – Offset and Hearing Loss

The House Economic Matters Committee will consider the bill’s cross-file, HB 0590, on February 28.

If signed into law, SB 0377 would expand existing eligibility for workers’ compensation related to hearing loss. While expanded eligibility would no doubt cause strife for employers due to the increased number of benefit claims, the changes to offset ability is even more concerning. SB 377 would void the ability to offset a workers’ compensation benefit and allow claimants to receive double benefits on the same claim.

From the MACo Testimony:

Under SB 377, workers’ compensation claims for tinnitus would no longer require disablement for eligibility, nor would they calculate age-based deductions to account for natural, age-induced hearing loss. Not only would benefit claims likely increase to a broader pool of workers’ compensation candidates for lifetime claims, but employers would also no longer be able to fairly adjust for natural, age-induced hearing loss, greatly increasing the costliness of these such claims – which are many. To put this into perspective, on average, Montgomery County receives 5-6 workers’ compensation claims related to hearing loss per week.

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Concerningly, SB 377 repeals existing “offset” abilities for most workers’ compensation claims, not just those related to hearing loss. Chesapeake Employers’ Insurance Company, which many local governments contract with, estimates that only 27 percent of the current claims they service would maintain any offsets under SB 377. Repealing the ability to offset claims would also create instability for the insurance industry servicing workers’ compensation. In doing so, insurers would ultimately push these additional costs onto the local governments that contract with them via increased premiums. Some insurers may even scale down or phase out their workers’ compensation services altogether.