An Act to amend and reenact § 65.2-313 of the Code of Virginia, relating to workers' compensation; employer's offset in event of recovery.
HB426 amends Virginia’s workers’ compensation law governing how an employer’s lien or offset is applied when an injured worker recovers money from a third party or when the employer pursues subrogation. The bill revises § 65.2-313 to specify that, after a recovery, the employer must continue paying a percentage of each future benefit payment based on the ratio of attorney’s fees and costs to the total third-party recovery until the employer’s credit is exhausted. It also clarifies that lifetime medical benefits remain in force after a recovery and that the claimant does not have to file new claims for causally related medical treatment with an authorized treating physician.
The bill further provides that an existing indemnity award is not suspended, modified, or terminated solely because of a third-party recovery or because the employer has a credit. Instead, the employer’s credit is applied as a continuing pro rata reduction to benefits otherwise payable under the award. During the offset period, the claimant may pay medical expenses covered by the award and be reimbursed for the employer’s proportionate share of attorney’s fees and costs on those payments until the credit is used up. The Workers’ Compensation Commission must also account for any apportionment under § 65.2-311 when ordering payments.
HB426 changes the administration of workers’ compensation offsets in Virginia by preserving ongoing benefit awards after a third-party recovery and by clarifying the mechanics of how employer credits are applied over time. It affects employers, injured workers, insurers, attorneys, and the Workers’ Compensation Commission by requiring pro rata continuation of payments rather than a suspension or termination of awards, and by reinforcing the continued availability of lifetime medical benefits and reimbursement rules tied to attorney’s fees and costs.
The available record shows no committee transcript or recorded vote debate, so there is no direct evidence of opposition or support in the provided materials. The bill’s enactment as Chapter 923 suggests it ultimately received sufficient legislative support and was approved into law. Based on the text, the measure appears aimed at clarifying and protecting ongoing benefits after third-party recoveries, which is generally consistent with a remedial workers’ compensation policy.
The main potential point of contention is the allocation of costs and credits after an injured worker recovers from a third party: employers and insurers may favor preserving their offset rights, while injured workers and their counsel may favor clearer rules that keep medical and indemnity awards intact and ensure reimbursement of attorney’s fees and costs. Another likely issue is the bill’s requirement that awards not be suspended or terminated solely because of a recovery, which could be viewed as expanding claimant protections and limiting employer leverage in offset administration. No specific objections or supporters are identified in the provided discussion materials.