New Virginia Statute Adds Notice Requirement to Workers’ Compensation Denial Letters
Most employers and insurance carriers are familiar with the Virginia Workers’ Compensation Commission’s Form VWC 1, “Employer’s Workplace Notice;” informing workers of their rights in case of an injury or accident on the job. Equally familiar is the required First Report of Injury. In the same vein, defense attorneys and their clients alike know of the Ombuds Department in the Commission, which does not provide legal advice, but promises confidentiality to the claimants who call in when they receive the Commission’s Notification of Injury, detailing the steps the claimant must take to pursue their claim. Despite these notifications and services, there has never been a requirement in Virginia that an employer or insurer send a “denial letter” to a claimant, save for responses to a 30-Day Order, 20-Day Order, or answering discovery. Carriers have always been free to send a denial letter on their own should they choose to do so, however.
The Commission now will require employers and insurers to inform claimants of their legal rights to dispute denials of workers’ compensation benefits if denial letters are sent. Virginia Code § 65.2-601.3 goes into effect on July 1, 2024, amending the current Code of Virginia relating to workers’ compensation. The statute, which will affect all covered employers and insurance carriers in the state of Virginia, reads as follows:
§ 65.2-601.3. Notice of right to dispute claim.
A. If an employer subject to this title, or an employer’s insurer, denies a covered employee’s request for workers’ compensation benefits, the employer or the insurer, as applicable, shall include in its letter denying benefits a notice that the employee has a right to dispute the claim denial through the Virginia Workers’ Compensation Commission. Such notice shall include the following text:
EMPLOYEE RIGHT TO DISPUTE DENIAL OF WORKERS’ COMPENSATION BENEFITS.
IF YOU DISAGREE WITH THIS DENIAL, YOU HAVE THE RIGHT TO DISPUTE THE DECISION BY FILING A REQUEST FOR A HEARING WITH THE VIRGINIA WORKERS’ COMPENSATION COMMISSION. IT IS YOUR RESPONSIBILITY TO DISPUTE THE DECISION AS SOON AS PRACTICABLE. THE WORKERS’ COMPENSATION COMMISSION IS A STATE AGENCY RESPONSIBLE FOR MAKING FINAL DECISIONS ON DISPUTED WORKERS’ COMPENSATION CLAIMS. HOWEVER, SUCH CLAIM MAY BE LOST IF YOU DO NOT FILE IT WITHIN THE TIME LIMIT PROVIDED BY LAW, WHICH IS TYPICALLY TWO YEARS AFTER THE INJURY.
Such notice shall also include the address, telephone number, and website through which the employee may contact the Virginia Workers’ Compensation Commission.
B. Failure to comply with the provisions of this section shall not be considered a failure to make a required report for the purposes of § 65.2-902.
Throughout Subsection (A) of the new statute, the word “shall” is used, indicating that the actions to be taken are mandatory, not permissive. Employers and insurance carriers must comply with the commands of the new statute; it is not optional. However, this applies if a written denial letter is sent. If there is no written document denying the claim (letter, email, portal messages, digital messages of form), then there is no notice requirement under this Statute as it presumes a letter being sent by stating “… in its letter denying benefits…” A verbal denial, therefore, would not trigger this requirement and we continue to recommend that you verbally deny claims rather than sending a denial letter.
Subsection (B) of the new statute interestingly removes the mandatory civil penalties of § 65.2-902. This does not mean, however, that the Commission lacks the power to enforce the new law. We will not know how the Commission intends to enforce its mandatory notice requirements until it is challenged and appealed to at least the Full Commission.
If the denial is in writing, it must include the Notice paragraph of the statute. To fully comply with the new law, your written claim denials should include the exact language listed above, without alteration. If a claim denial fails to include the above Notice, we are here to help. Please feel free to call our office at (804) 560-9600 if there are any questions regarding the new law going into effect on July 1, 2024.