By Kristen Poland

South Carolina businesses may soon see the impact of legislation that has revamped the state’s workers’ compensation system.

Changes in the system, which have been in effect since July 1, provide more protection to businesses against extravagant and fraudulent claims against workers’ compensation and tightened regulation against premium increases. In turn, businesses may see insurance rates drop in the future.

“These changes put some teeth into the state’s workers’ compensation system,” said Bernard Tisdale, an attorney with Ogletree Deakins Nash Smoak & Stewart P.C. in Charlotte. “If you are trying to get benefits you don’t deserve, there are stronger penalties. The state’s system was out of control, which is evidenced by increasing workers’ compensation insurance rates.”

The new legislation directly addresses a handful of court cases that in the past have set precedents which have been considered harmful to the system. For example, industry representatives have a right to meet with doctors and carrier representatives in order to obtain pertinent information about the employee without the employee’s consent. The employee must be informed of the meeting and invited to attend.

Previously, in the case of Brown V. BILO, a judge ruled that such meetings were not lawful, and that without a patient’s approval only written correspondence was allowed.

“This allows us to discuss things like when the client can return to work, what restrictions he or she will have, if there will be further treatment and other important things industry has a right to know,” said Sam Painter, an attorney with Nexsen Pruit LLC in Columbia.

“This will save time and money because before you had to go through the doctor’s deposition, and so industry had to pay for a court reporter, for the doctor’s time—basically you were spending money to discuss a case with a doctor.”

The law also requires employees with medically complex injuries to have a medical expert give support confirming that a work-related accident caused the injury. This clarifies a ruling in the Tiller v. National Health Care case in which a woman was awarded disability for a back injury she thought came from lifting a cart and that later turned out to be caused by a virus.

In addition, the new law stipulates that if a person is injured on the job and one body part is the only part affected by the injury that is the only body part for which the person may receive compensation.

This refutes a decision on the Ellision v. Frigidaire case that awarded a man full disability because he injured his knee at work, and the knee injury combined with a pre-existing condition put him out of work. Under the new law, the man would only be eligible for a loss of leg injury.

Another component of the new legislation is the dissolution of the Second Injury Fund. The fund will be phased out until its final dissolution in 2013. Initially created as an incentive for businesses to hire and retain employees that have disabilities or prior injuries, the fund protects employers from the higher cost of insurance that can occur when an employee’s injury, combined with an existing disability, results in higher costs than would have arisen from an injury alone.

The fund’s major flaw is that all industry must pay into the fund, but not all industries receive benefits. For example, companies that have high employee retention, and those that keep good medical records on their employees, tend to take advantage of the fund. Companies that hire seasonal employees and have high turnover aren’t as likely to know whether the employee had a pre-existing injury or disability.

“Everybody pays into it equally, but for some industries the assessment is very high and the return is very small, while other industries are actually making money,” Painter said. “I used to call it the original South Carolina lottery—everyone has to play, some industries are winners, and many are losers.”

Repetitive trauma is addressed for the first time by the legislation by defining it precisely and required thorough documentation, assessment and evidence to back up a repetitive trauma claim.  

“Repetitive trauma is a different animal from your usual slip, trip and fall case,” Tisdale said. “It can’t be pinpointed to one singular event. This is a secretary at a keyboard or a construction worker repeatedly bending over to pick up 2x4s.”

Other changes to the law include the elimination of a the circuit court step in the appeal process, exemption of trucking companies from liability in accidents involving independent contractors and it requires Department of Insurance oversight and regulation of the loss cost modifier component of the premium rate. This last change could affect premium rates in the immediate future, should the Department of Insurance choose to impose stringent regulation on the loss cost modifier component. Currently, the modifier is not regulated.

“It’s a balancing act, coming up with a reasonable rate that will satisfy both the insurance providers and those who are paying the premiums,” Painter said. “Potentially, if the state’s chief insurance commissioner is proactive in reducing rates, we could see some immediate affect from this legislation.” 

Overall, both Painter and Tisdale said while they expect to see positive changes in the system because of the new legislation, only time will reveal whether the changes will be successful and if the insurance rates will drop.

“We’ll just have to wait and see what it does to rates, if it protects workers and if it allows South Carolina businesses to be competitive globally,” Tisdale said.

For employers who would like more detailed information about the new laws, the S.C. Chamber of Commerce will host a training seminar July 25 in Greenville and July 26 in Columbia. Painter, Tisdale and other attorneys will speak about the new legislation at training sessions in Greenville and Columbia. A Blue Cross Blue Shield representative also will speak at the sessions. More information about the training sessions can be found online at www.scchamber.net or by contacting Alexa Stillwell at (803) 225-2621 or at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .