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FAQs -- Ekdahl, Hartwig

Note:  This provides only an overview of the 2017 legislation. The actual language, which will be codified as Minnesota Statutes § 176.1292, is in Chapter 94, Article 4, of the 2017 Minnesota Session Laws. View an excerpt of the legislation (Article 4).

1. What are the Ekdahl/Hartwig cases?

On Aug. 13, 2014, the Minnesota Supreme Court issued decisions in Ekdahl v. Independent School District #213, et al., 851 N.W.2d 874 and Hartwig v. Traverse Care Center, et al., 852 N.W.2d 251. In these cases the court decided that under Minnesota Statutes § 176.101, subd. 4, permanent total disability (PTD) benefits cannot be reduced by any government retirement benefits except Social Security retirement benefits. Examples of government retirement benefits that cannot be used to reduce PTD benefits are those paid by the Public Employee Retirement Association, Teachers Retirement Association, Minnesota State Retirement System and other agencies that pay government retirement benefits.

2. What are retirement benefits?

Under the new legislation, "retirement benefits" means retirement benefits paid by any government retirement benefit program and received by employees, other than old age and survivor insurance benefits received under the federal Social Security Act ... Retirement benefits include retirement annuities, optional annuities received in lieu of retirement benefits and any other benefit or annuity paid by a government benefit program that is not clearly identified as a disability benefit or disability annuity in the applicable governing statute.

The only retirement benefit that can reduce permanent total disability (PTD) benefits is the Social Security retirement benefit received by an injured worker.

3. Why was this legislation necessary?

Some workers' compensation payers raised questions about how these decisions were to be applied to injured workers who were injured and permanently totally disabled before the decisions were issued. Some payers also disagreed with the Department of Labor and Industry's Special Compensation Fund (SCF) about how the decisions affected the rights and obligations between payers and the SCF.*

*SCF collects assessments from workers' compensation insurers and self-insured employers. It also reimburses insurers for some workers' compensation benefits.

4. Who does this legislation apply to?

A. The legislation applies to:

  • the Department of Labor and Industry's Special Compensation Fund (SCF);

  • injured workers with dates of injury before Aug. 13, 2014, (and their dependents and legal heirs) whose permanent total disability (PTD) benefits were offset by retirement benefits (except for the injured workers, dependents and legal heirs described in paragraph B); and

  • payers that reduced PTD benefits by the injured worker's retirement benefits, which include self-insured employers (primarily government payers) and a few workers' compensation insurers.

B. The legislation does not apply to:

  • injured workers with dates of injury on or after Aug. 13, 2014 (the Ekdahl/Hartwig cases apply to these injured workers, but the new legislation does not);

  • injured workers whose last PTD benefits were paid (or would have been paid if not reduced by retirement benefits) before Jan. 1, 2000;

  • dependents and legal heirs of an affected injured worker who died before Jan. 1, 2008;

  • injured workers with settlement agreements approved by a compensation judge, if the settlement was a full, final and complete settlement of workers' compensation benefits in exchange for a lump sum; and

  • injured workers where a final court order, or stipulation for settlement approved by a judge, explicitly allowed PTD benefits to be reduced by retirement benefits.

5. What does this legislation do?

Many payers had reduced permanent total disability (PTD) benefits by retirement benefits, which resulted in underpaying the employees or their dependents and legal heirs. These reductions were determined improper by the Ekdahl/Hartwig decisions. The legislation provides that if a payer pays past and future PTD benefits to all of the PTD employees, dependents and legal heirs described in question 3(a), without reducing the benefits by retirement benefits (other than Social Security retirement benefits):

  • the Special Compensation Fund (SCF) will reimburse the payer supplementary benefits paid or payable before the date of the decisions if SCF has denied reimbursement of supplementary benefits based on the Supreme Court's decisions*; and

  • the payer will receive relief from paying a portion of SCF assessments on increased PTD benefits paid due to removal of the retirement offset.

*If SCF previously reimbursed the payer, SCF will not collect the amounts previously reimbursed.

6. What if a payer does not pay the injured workers as provided in the legislation?

If a payer elects not to participate in the program established by the legislation, that payer:

  • is not entitled to supplementary benefit and assessment relief provided in the legislation;

  • is subject to litigation brought by injured workers for additional permanent total disability (PTD) benefits owed under the court decisions; and

  • may be subject to penalties assessed by the Department of Labor and Industry or a compensation judge (depending on the facts).

7. Does the legislation close out the rights of any injured workers, dependents or legal heirs?

No, under the legislation:

  • injured workers, dependents and legal heirs may pursue additional claims from the payer, whether or not the legislation applies to them; and

  • payers may assert defenses to any additional claims asserted by employees, dependents and legal heirs.

8. What are the time frames for implementing the legislation?

  • Injured workers must be paid corrected ongoing permanent total disability (PTD) benefits no later than Oct. 27, 2017, and past underpayment of PTD benefits no later than Dec. 26, 2017.

  • Dependents and legal heirs must be paid any underpayment no later than Feb. 24, 2018.

  • The Department of Labor and Industry (DLI) commissioner may waive payment or extend time frames if the payer, after making a good faith effort, is unable to locate an employee, identify or locate the dependents or legal heirs of a deceased employee, or locate documentation to determine the amount of an underpayment.

  • DLI must establish a procedure for implementing the legislation, in consultation with payers, no later than July 30, 2017.

9. How can I find out more?

  • If you are an injured worker, or a dependent or heir of an injured worker, contact your claims adjuster or attorney. If you still have questions, contact the Office of the Workers' Compensation Ombudsman at 651-284-5013, 800-342-5354 or dli.ombudsman@state.mn.us.

  • If you are a payer (self-insured employer or workers’ compensation insurer):

    • for questions about dates of injury before Oct. 1, 1995, contact the Department of Labor and Industry at 651-284-5045 or dli.specialcomp@state.mn.us; and

    • for questions about dates of injury on or after Oct. 1, 1995, contact Deb Dolsky at 651-284-5369 or deborah.dolsky@state.mn.us.