Change provisions under the Nebraska Workers’ Compensation Act relating to subrogation of third-party claims and the distribution of proceeds in the settlement of third-party claims
Summary
LB313 would amend the Nebraska Workers’ Compensation Act to revise how employers and workers’ compensation insurers recover money when an injured worker has a claim against a responsible third party. The bill clarifies subrogation rights, stating that an employer or insurer that has paid compensation may recover from the third party and that any recovery above the compensation paid, after recovery expenses, must be paid promptly to the employee or dependents and treated as an advance on future compensation benefits.
The bill also changes the rules for third-party settlements and the distribution of settlement or judgment proceeds. It requires a settlement to be approved in writing by the employee or personal representative and the workers’ compensation insurer, or, if there is no agreement, approved by the court as fair and reasonable. If the parties do not agree on how to divide the proceeds, the court must order a fair and equitable distribution, including a one-third share of the remainder to the employee or personal representative, payment to reimburse compensation already paid or owed, and payment of any remaining balance to the employee or representative. The bill repeals the original sections it replaces and reissues the revised statutes.
Impact
LB313 would directly affect the Nebraska Workers’ Compensation Act by updating statutory rules governing third-party liability claims, insurer reimbursement, and settlement distribution. It would alter the rights and obligations of injured employees, dependents, employers, workers’ compensation insurers, and courts handling related claims, while harmonizing the statutory language and repealing the prior versions of the affected sections.
Sentiment
The available record shows no committee transcript, recorded debate, or vote history, so there is no documented public sentiment from legislative discussion. The bill’s final status as indefinitely postponed suggests it did not advance, but the materials provided do not explain whether that outcome reflected support, opposition, or procedural timing.
Contention
The main policy issue in LB313 is how settlement proceeds from third-party claims should be divided between the injured worker and the workers’ compensation system. Potential points of contention include the extent of insurer subrogation rights, whether the proposed one-third allocation to the employee is fair, and how much discretion courts should have when the parties cannot agree on settlement distribution. These issues would primarily concern injured workers, employers, workers’ compensation insurers, and litigants in third-party injury cases.