STAND. COM. REP. NO. 3371
Honolulu, Hawaii
RE: H.B. No. 1509
H.D. 2
S.D. 1
Honorable Ronald D. Kouchi
President of the Senate
Thirty-Third State Legislature
Regular Session of 2026
State of Hawaii
Sir:
Your Committees on Labor and Technology and Commerce and Consumer Protection, to which was referred H.B. No. 1509, H.D. 2, entitled:
"A BILL FOR AN ACT RELATING TO WORKERS' COMPENSATION,"
beg leave to report as follows:
The purpose and intent of this measure is to:
(1) Repeal the authorization of a physician to transmit a treatment plan by mail or facsimile and the requirement that the physician submit the plan to an address or facsimile number provided by the employer;
(2) Require an employer to file a response, either accepting or objecting to a treatment plan, within ten days of receipt;
(3) Impose a monetary penalty if an employer does not file a response within the ten-day period, unless the Director of Labor and Industrial Relations (Director) determines there was good cause in the delay; and
(4) Clarify that a treatment plan is deemed accepted if an employer fails to file certain documents within the ten-day period.
Your Committees received testimony in support of this measure from the Department of Labor and Industrial Relations; United Public Workers, AFSCME Local 646, AFL-CIO; International Brotherhood of Electrical Workers Local Union 1186; University of Hawaii Professional Assembly; and two individuals.
Your Committees received testimony in opposition to this measure from the Society for Human Resource Management–Hawaii, Maui Chamber of Commerce, and one individual.
Your Committees received comments on this measure from the Department of Human Resources Development, Kohala Coast Resort Association, and one individual.
Your Committees find that under the existing workers' compensation system, injured employees often experience unnecessary delays when seeking medical care for injuries suffered on the job and that an employer's failure to respond to proposed treatment plans is a common cause for delay. Existing law does not specify a deadline for employers to approve, deny, or otherwise respond to treatment plans received from an injured employee's physician, and some physicians may be reluctant to begin treatment absent clear approval from the employer due to the risk that insurers may deny coverage, ultimately delaying the provision of essential care to the injured employees and postponing their recovery and return to work. This measure reduces avoidable delays in medical care for injured workers by ensuring the timely approval or denial of workers' compensation treatment plans.
Your Committees acknowledge the concerns raised in testimony by
the International Brotherhood of Electrical Workers Local Union 1186 (IBEW 1186) and Department of Human Resources Development that requiring employers to
file a response with the Director for every treatment plan they receive within
a specific time period and imposing a fine on their failure to do so would create
an undue administrative burden on employers.
This requirement also conflicts with another provision in this measure
that deems a treatment plan accepted if an objection is not filed within the
specified time period. Your Committees
also note the concern raised by IBEW that the burden of proof to justify the
denial of a treatment plan should be explicitly placed on the employer to
prevent delays in the acceptance or denial of the treatment plan. Your Committees additionally note IBEW
1186's request for the establishment of
penalties to deter violations and hold employers liable for costs incurred by the injured employees due to
the denial of treatment plans without reasonable grounds, and failure to pay
for medical care provided as set forth in an accepted treatment plan. Thus, amendments to this measure are
necessary to address these concerns.
Your Committees have amended this measure by:
(1) Deleting
language that would have required employers to file, within ten days after the
treatment plan is deemed received, a response with the Director for all treatment
plans;
(2) Inserting
language requiring any employer denying a treatment plan to file, within seven
days after the treatment plan is deemed received, a written denial of the
treatment plan with the Director by secure electronic means, with a copy to the
physician and injured employee;
(3) Deleting
language that would have imposed a $500 fine on employers that fail to file a
response within ten days after a treatment plan is deemed received, unless the Director
determines there was good cause for the delay;
(4) Inserting language specifying that an employer shall have the burden of proof to establish by a preponderance of medical evidence that a treatment plan is unreasonable, unnecessary, or inappropriate to justify a denial;
(5) Inserting language establishing a presumption that a denial of a treatment plan not supported by a medical opinion or relevant medical records existing at the time of denial shall be without reasonable grounds;
(6) Inserting language requiring employers to pay the appropriate health care provider for any medical care set forth in a treatment plan that is accepted or deemed accepted;
(7) Inserting language requiring any employer found
by the Director to have denied a treatment plan without reasonable grounds,
frivolously, or primarily for purposes of delay, or failed to pay the
appropriate health care provider for any medical care set forth in a treatment
plan that is accepted or deemed accepted, to be subject to a fine of not less
than $5,000 and payment of costs, including reasonable attorneys' fees,
incurred by the injured employee in contesting the denial of the treatment plan
or enforcing payment pursuant to the treatment plan;
(8) Inserting
language authorizing the Department of Labor and Industrial Relations to enforce
the penalties in accordance with section 386-92, Hawaii Revised Statutes;
(9) Inserting an effective date of January 1, 2077, to encourage further discussion; and
(10) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.
As affirmed by the records of votes of the members of your Committees on Labor and Technology and Commerce and Consumer Protection that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1509, H.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 1509, H.D. 2, S.D. 1, and be referred to your Committees on Judiciary and Ways and Means.
Respectfully submitted on behalf of the members of the Committees on Labor and Technology and Commerce and Consumer Protection,
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________________________________ JARRETT KEOHOKALOLE, Chair |
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________________________________ BRANDON J.C. ELEFANTE, Chair |
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