The 1913 Oregon Legislative Assembly gave Oregon its first workers’ compensation law, which became effective July 1, 1914. This law
set up a State Industrial Accident Commission (SIAC), consisting of three trustees, to oversee the Industrial Accident Fund. Employers in
hazardous occupations had to decide whether to be part of the fund. Contributors to the fund could not be sued; suits were brought against
the commission. Noncontributors, on the other hand, had no common-law defenses, and the Employer Liability Act made them vulnerable
to unlimited damages for worker injuries or illnesses. Employers in nonhazardous occupations also could contribute to the fund and get the benefits.

In 1965, the Legislature overhauled the law. Most employers came under the Workmen’s Compensation Law with this change, effective
Jan. 1, 1966. Two years later, all employers came under this law if they employed subject workers. Employers could buy the commission’s
insurance, self-insure, or insure with private companies. The SIAC was renamed Workmens’ Compensation Board, and its insurance function
was given to the State Compensation Department, the forerunner of the State Accident Insurance Fund (SAIF) and SAIF Corp.

The federal Occupational Safety and Health Act of 1970 gave rise to the Oregon Safe Employment Act in 1973. Its purpose was to ensure safe and healthful working conditions for every working man and woman in Oregon, to preserve our human resources, and to reduce the
substantial burden — in terms of lost production, wage loss, medical expenses, disability compensation payment, and human suffering
— created by occupational injury and disease.

The 1977 Legislature reshuffled workers’ compensation administration and created a Workers’ Compensation Department headed by a director appointed by the governor. The Workers’ Compensation Board, continuing under gubernatorial appointment, supervised a Hearings Division that settled contested cases under both workers’ compensation law and the Oregon Safe Employment Act.

The 1987 Legislature made substantial changes to workers’ compensation law. Chapter 884, Oregon Law 1987, heavily amended and enhanced current law, and the Workers’ Compensation Department became a division of the new Department of Insurance & Finance.
In 1990, based on recommendations of the Labor/Management Task Force appointed by the governor, the Legislature made substantial
changes to the law in special session; Chapter 2, Oregon Laws 1990 (SB 1197), significantly amended and added to the Workers’
Compensation Law.

The 1993 Legislative session made only minor changes to the Oregon workers’ compensation system. These included HB 2282, which
addressed the regulation of employee leasing companies, and HB 2285, which dealt with Oregon’s 24-Hour Health Plan, a pilot project
that combined group health coverage with the medical portion of workers’ compensation. HB 3069 amended the public records law to restrict access to claims history information in certain circumstances when the information could be used to discriminate against injured workers.

In 1995, the most significant changes to the workers’ compensation system came with SB 369. After many drafts and rewrites, the bill
emerged as an 80-page reform of the workers’ compensation system. SB 369 was designed, in part, to restate and clarify many of the 1990
reforms that had been reversed or overturned through case law. The bill addressed other provisions, and the Department of Insurance
& Finance was reorganized and renamed the Department of Consumer & Business Services.

In 1997, HB 2971 revised ORS 656.262, affecting the issuance of notices of acceptance and the processing of new compensable conditions.

In 1999, the Legislature passed HB 2830, which required Oregon OSHA to revise its method for scheduling workplace inspections and notify
certain employers of an increased likelihood of inspection.

The 1999 legislative session saw relatively minor changes to the Oregon workers’ compensation system. However, SB 460 repealed most sunsets
placed by SB 369 in 1995. One exception to the sunset repeal was the exclusive-remedy provision. With limited exception, workers’
compensation is the sole remedy for covered workers with injuries and illnesses that arise out of and in the course of their employment. The
Legislature directed the Workers’ Compensation Division to commission a study on the effects of and the costs and savings to the Oregon workers’ compensation system of major-contributing cause and combined-condition provisions. The sunset was extended until Dec. 31, 2004.

The 2001 legislative session saw the passage of SB 485, the most complex and comprehensive workers’ compensation bill since 1995. This bill contained changes agreed upon by labor and management to correct imbalances or problems with the workers’ compensation system.



SB 485:
• Addressed tort claims against an injured worker’s employer and clarified the definition of pre-existing conditions and their
applicability to arthritis or arthritic conditions;

• Increased permanent partial disability rates (sunset Dec. 31, 2004);

• Allowed introduction of contributory negligence as an employer defense;

• Reduced time during which claims may be denied or accepted;

• Increased the maximum rate of temporary disability benefits;

• Created supplemental disability for multiplejob workers;

• Changed the Workers’ Compensation Board own-motion claim-reopening process, including awarding permanent partial disability; and

• Allowed Workers’ Benefit Fund reimbursement for new or omitted medical condition reopenings under WCB’s own-motion process.


SB 485 also directed the Management-Labor Advisory Committee (MLAC) to recommend to the 2003 Legislative Assembly an exclusive,
no-fault, expeditious alternative process and remedy to the court system that addresses major-contributing-cause denials.
The 2003 Oregon Legislative Assembly enacted several changes to workers’ compensation law through SB 233:

• Eliminated the additional penalty on noncomplying employers following claim closure;

• Removed the requirement that assigned claims agents for noncomplying employers be special assistant attorneys general, thus
allowing agents to hire private counsel;

• Changed what self-insured employers may use for security deposits;

• Established joint and several liabilities for all entities operating under one self-insurance certification and allowed electronic filing of
guaranty contracts; and

• Changed the appeal period for nonsubjectivity determinations from 30 to 60 days and the start of the appeal period for orders issued under
ORS 656.740 from the receipt date to the mailing date.

The 2003 Legislature also changed how permanent partial disability (PPD) benefits will be determined in Oregon. For injuries occurring
on or after Jan. 1, 2005, SB 757 replaces “scheduled” and “unscheduled” disability with “impairment” and “work disability.” The major changes to PPD benefit determination include rating injuries to body parts in relation to the “whole person,” paying workers with permanent disability an “impairment benefit” equal to the percentage of impairment multiplied by 100 times the state average weekly wage, and paying workers unable to return to regular work disability benefits equal to the percentage of impairments (modified by age, education, and
adaptability factors) multiplied by 150 times the worker’s weekly wage at the time of injury provided the factor for the weekly wage is
between 50 percent and 133 percent of the state average weekly wage.

The 2005 Legislature made a change to the permanent partial disability statutes enacted in 2003. House Bill 2408 provided that when
determining a worker’s permanent disability benefits, a worker only receives the impairment benefit (no work disability) when the worker
is released to regular work by the attending physician or nurse practitioner or returns to regular work at the job held at the time of
injury. The law applies to all claims with dates of injury on or after Jan. 1, 2006. The changes sunset Jan. 1, 2008.

The 2005 Legislature also addressed the process for insurer-requested independent medical examinations. Senate Bill 311 required insurers to select an independent medical examination provider from a list developed by the Department of Consumer & Business Services. The criteria to be on the list of qualified providers will include training
requirements and standards set by either the provider’s professional organization or the American Board of Independent Medical Examiners. In addition, the bill allows workers to appeal the reasonableness of the exam location and obtain an expedited review by the department. The bill also provides for sanctions against medical service providers who fail to provide diagnostic records in a timely manner. The bill imposes a monetary penalty against workers who fail to attend an independent medical examination without prior notification or without justification for not attending the examination.

Senate Bill 386 was also enacted in 2005. Effective Jan. 1, 2006, the bill modified the standard for establishing permanent total disability benefits, as well as terminating or rescinding those benefits. The new standard for terminating permanent total disability benefits requires a
worker to be materially improved medically or vocationally and capable of regularly performing work at a gainful and suitable occupation. SB 386 sets an earnings threshold to determine what constitutes “gainful” employment that is linked to the federal poverty guidelines for a family of three. For injuries on or after Jan. 1, 2006, the bill adjusts the worker’s wage rate used to determine the gainful employment threshold at the same percentage change as in federal poverty guidelines. The bill allows workers to appeal to the Hearings Division of the Workers’
Compensation Board any notice of closure that reverses their permanent total disability benefits; workers’ benefits continue while notices of closure are appealed. If the insurer’s decision is upheld, insurers are to be reimbursed from the Workers’ Benefit Fund for benefits paid during the appeal. SB 386 also makes workers eligible
for vocational assistance if their permanent total disability benefits are terminated.



Significant laws passed in 2005 affecting workers’ compensation

HB 2091 Transfers all hearings on matters not concerning a claim – medical, vocational, and some penalty issues – from the Office of Administrative Hearings to the Hearings Division of the Workers’
Compensation Board. After Jan. 1, 2006, all contested case hearings on workers’ compensation issues will be held at the Workers’ Compensation Board.

HB 2294 Changes the law relating to new and omitted conditions and the ownmotion jurisdiction of the Workers’ Compensation Board. If a worker’s claim is denied, the worker may request a hearing on the denial, regardless of when the worker makes a claim for a new or omitted condition. The bill clarifies that if the worker’s claim for a
new or omitted condition is compensable, but was made more than five
years after the first closure of the worker’s claim, the claim is to be processed under the jurisdiction of the board. The bill provides that any party can appeal an own-motion order from the board. Effective Jan. 1, 2006.

HB 2404 Eliminates penalties that would otherwise be assessed against an insurer or self-insured employer if, after the completion of the reconsideration of a closed claim, the worker’s benefit increases as a
result of circumstances beyond the control of the insurer or self-insured
employer. Effective Jan. 1, 2006.

HB 2405 Expedites the process of claims for aggravation by having the attending physician and the worker (or the worker’s representative) sign the aggravation claim form. The bill requires the insurer or self-insured employer to start processing the aggravation claim when it receives the completed form and eliminates the requirement that the physician’s report accompany the claim for aggravation. However, the report must subsequently be provided to the insurer as documentation of the
worsened condition as the basis for payment of compensation. Effective
Jan. 1, 2006.

HB 2408 Provides that when determining a worker’s permanent disability benefits, a worker only receives the impairment benefit (no work disability) without exception when the worker is released to regular work by the attending physician or nurse practitioner or returns to regular work at the job held at the time of injury. Applies to all claims with dates of injury on or after Jan. 1, 2006 (changes sunset Jan. 1, 2008).

HB 2717 Establishes time limits on hearing notices and hearing postponements at the Workers’ Compensation Board. The bill requires the board to give at least 60 days’ notice of a scheduled hearing,
except for expedited claim service cases, stayed compensation cases, and requests for hearings that consolidate an existing case and an existing hearing date. The bill also requires that postponed hearings be rescheduled within 120 days of the original hearing date, with the exception of multiple employer/insurer responsibility cases. Effective Jan. 1, 2006.

HB 2718 Allows self-insured public utilities to obtain workers’ compensation excess insurance coverage from eligible surplus lines insurers. The bill limits this provision to public utilities with more
than $500 million in assets. Effective Jan. 1, 2006.

HB 3318 Increases the amount an employer may pay for medical services in nondisabling workers’ compensation claims from $500 to $1,500. Applies to claims made on or after Jan. 1, 2006.

SB 119 Allows the Reemployment Assistance Program to provide direct services to injured workers (such as job search assistance). The bill also provides that the Workers’ Benefit Fund will reimburse the insurer for vocational assistance costs if the director of the Department
of Consumer & Business Services issues an order overturning the denial
of vocational benefits and that denial is later upheld by a final order. Effective Jan. 1, 2006.

SB 172 Gives the director of the Department of Consumer & Business Services authority to issue civil penalties for violation of a statute. The bill also corrects language that inadvertently extended the timeline required to begin a mandatory reconsideration of claim closure. The
bill eliminates an obsolete statute that requires the director to designate a physician to complete a pre-employment physical if requested by a prospective employer. Effective Jan. 1, 2006.

SB 311 Provides additional protections and rights for injured workers required to attend independent medical examinations (IME) as part of a workers’ compensation claim. The bill requires insurers to select an examiner from a list of qualified providers maintained by the
Department of Consumer & Business Services. The bill requires that examiners on the list take training approved by the department and perform within standards set by either their professional licensing organization or the American Board of Independent Medical Examiners.
The department may remove examiners who have violated standards from the list. Insurers must provide training to claims examiners related to interactions with IME providers, and the training content must be developed or approved by the department. The bill allows workers to appeal the reasonableness of the location of the examination. The department may investigate worker complaints regarding the examination. The bill provides for sanctions against injured workers who fail to attend an IME without justification or prior notification for not attending the exam. Effective Jan. 1, 2006 (the provider list is effective July 1, 2006).

SB 386 Changes how permanent total disability (PTD) benefits are determined in Oregon. The bill sets an earnings threshold to determine what constitutes “gainful” employment that is linked to the federal poverty guidelines for a family of three. The bill changes the process for rescinding or terminating PTD benefits. A worker who has PTD benefits rescinded may appeal to the Workers’ Compensation Board and continue to receive benefits while the appeal is in progress. If the PTD rescission is upheld, the Workers’ Benefit Fund will reimburse the insurer for benefits paid during the appeal. Workers are allowed to earn some
wages and remain eligible for PTD benefits. The bill also provides that
workers are eligible for vocational assistance if their PTD benefits are
terminated. Effective Jan. 1, 2006.

SB 433 Makes owners or leaseholders that furnish, maintain, and operate certain motor vehicles used in the transportation of property nonsubject workers for purposes of workers’ compensation statutes. Effective Jan. 1, 2006.

SB 670 Requires the director of the Department of Consumer & Business Services to review and approve certain treatment standards for care provided by managed care organizations. This bill also requires managed care organization plans to allow attending physicians to advocate for medical services and temporary disability benefits. Effective Jan. 1, 2006.