SB258 - Revises provisions relating to industrial insurance. (BDR 53-594)

- 83rd Session (2025) Senate Bill No. 258–Senators Nguyen, Cannizzaro, Stone, Titus, Buck; Cruz-Crawford, Daly, Doñate, Dondero Loop, Ellison, Krasner, Lange, Ohrenschall, Pazina, Rogich, Scheible, Steinbeck and Taylor Joint Sponsors: Assemblymembers Nguyen, Yurek, Hafen, Marzola, Torres-Fossett; Anderson, Carter, Cole, Dalia, Edgeworth, González, Gray, Gurr, Hardy, Jackson, Jauregui, Karris, Kasama, Koenig, Monroe-Moreno, Moore, O’Neill, Orentlicher, Roth, Watts and Yeager CHAPTER.......... AN ACT relating to industrial insurance; revising provisions governing certain civil actions involving injured employees; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law provides for the payment of compensation under industrial insurance if, during the course of employment, an employee is injured or killed by a workplace accident or occupational disease. (Chapters 616A-617 of NRS) Existing law defines the term “compensation” to mean the money which is payable to an employee or to the dependents of the employee as provided in existing law governing industrial insurance, including benefits for funerals, accident benefits or medical benefits and money for rehabilitative services. (NRS 616A.090, 617.050) If the injury of an injured employee was caused under circumstances creating legal liability in a person other than the employer or a person in the same employ, existing law authorizes an injured employee or the dependents of the employee, under certain circumstances, to take proceedings to recover damages from that third party. Existing law also authorizes the industrial insurer or Administrator of the Division of Industrial Relations of the Department of Business and Industry, under certain circumstances, to recover damages from that third party. Additionally, under existing law, the industrial insurer or Administrator has a lien against the total proceeds of any recovery by the injured employee or the dependents of the employee. Existing law requires the amount of compensation to which the injured employee or the dependents of the employee are entitled, including any future compensation, to be reduced by the amount of damages or proceeds recovered. (NRS 616C.215) This bill provides that the maximum amount that the industrial insurer or Administrator may recover for such a lien must be the lesser of: (1) the amount of the lien, minus an amount equal to one-half of the reasonable costs incurred by the injured employee or the dependents of the employee in procuring the recovery; or (2) one-third of the total amount of any recovery, inclusive of any attorney’s fees or costs and the monetary value of any other property which is recovered, minus an amount equal to one-half of the reasonable costs incurred by the injured employee or the dependents of the employee in procuring the recovery. This bill requires an itemized memorandum of any such reasonable costs incurred by the injured employee or the dependents of the employee in procuring the recovery to be verified by the injured employee, the dependents of the employee or the attorney or representative of the injured employee or the dependents of the employee, provided to the industrial insurer or Administrator and subject to judicial review under certain circumstances. This bill also limits any – 2 – - 83rd Session (2025) offset to the amount of future compensation received by the injured employee or dependents of the employee to: (1) an offset against payments of compensation that are not accident benefits; and (2) a reduction in each such payment which does not exceed one-third of the amount of the payment until the total amount of all such reductions equals the net amount recovered by the injured employee or dependents of the employee. EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. NRS 616C.215 is hereby amended to read as follows: 616C.215 1. If an injured employee or, in the event of his or her death, the dependents of the employee, bring an action in tort against his or her employer to recover payment for an injury which is compensable pursuant to the provisions of chapters 616A to 616D, inclusive, or chapter 617 of NRS and, notwithstanding the provisions of NRS 616A.020, receive payment from the employer for that injury: (a) The amount of compensation the injured employee or the dependents of the employee are entitled to receive pursuant to the provisions of chapters 616A to 616D, inclusive, or chapter 617 of NRS, including any future compensation, must be reduced by the amount paid by the employer. (b) The insurer, or in the case of claims involving the Uninsured Employers’ Claim Account or a subsequent injury account the Administrator, has a lien upon the total amount paid by the employer if the injured employee or the dependents of the employee receive compensation pursuant to the provisions of chapters 616A to 616D, inclusive, or chapter 617 of NRS.  This subsection is applicable whether the money paid to the employee or the dependents of the employee by the employer is classified as a gift, a settlement or otherwise. The provisions of this subsection do not grant to an injured employee any right of action in tort to recover damages from the employer for the injury. 2. When an employee receives an injury for which compensation is payable pursuant to the provisions of chapters 616A to 616D, inclusive, or chapter 617 of NRS and which was caused under circumstances creating a legal liability in some person, other than the employer or a person in the same employ, to pay damages in respect thereof: – 3 – - 83rd Session (2025) (a) The injured employee, or in case of death the dependents of the employee, may take proceedings against that person to recover damages, but the amount of the compensation the injured employee or the dependents of the employee are entitled to receive pursuant to the provisions of chapters 616A to 616D, inclusive, or chapter 617 of NRS, including any future compensation, must be reduced by the amount of the damages recovered, notwithstanding any act or omission of the employer or a person in the same employ which was a direct or proximate cause of the employee’s injury. (b) If the injured employee, or in case of death the dependents of the employee, receive compensation pursuant to the provisions of chapters 616A to 616D, inclusive, or chapter 617 of NRS, the insurer, or in case of claims involving the Uninsured Employers’ Claim Account or a subsequent injury account the Administrator, has a right of action against the person so liable to pay damages and is subrogated to the rights of the injured employee or of the employee’s dependents to recover therefor. 3. When an injured employee incurs an injury for which compensation is payable pursuant to the provisions of chapters 616A to 616D, inclusive, or chapter 617 of NRS and which was caused under circumstances entitling the employee, or in the case of death the dependents of the employee, to receive proceeds under his or her employer’s policy of uninsured or underinsured vehicle coverage: (a) The injured employee, or in the case of death the dependents of the employee, may take proceedings to recover those proceeds, but the amount of compensation the injured employee or the dependents of the employee are entitled to receive pursuant to the provisions of chapters 616A to 616D, inclusive, or chapter 617 of NRS, including any future compensation, must be reduced by the amount of proceeds received. (b) If an injured employee, or in the case of death the dependents of the employee, receive compensation pursuant to the provisions of chapters 616A to 616D, inclusive, or chapter 617 of NRS, the insurer, or in the case of claims involving the Uninsured Employers’ Claim Account or a subsequent injury account the Administrator, is subrogated to the rights of the injured employee or the dependents of the employee to recover proceeds under the employer’s policy of uninsured or underinsured vehicle coverage. The insurer and the Administrator are not subrogated to the rights of an injured employee or the dependents of the employee under a policy of uninsured or underinsured vehicle coverage purchased by the employee. – 4 – - 83rd Session (2025) (c) Any provision in the employer’s policy of uninsured or underinsured vehicle coverage which has the effect of: (1) Limiting the rights of the injured employee or the dependents of the employee to recover proceeds under the policy because of the receipt of any compensation pursuant to the provisions of chapters 616A to 616D, inclusive, or chapter 617 of NRS; (2) Limiting the rights of subrogation of the insurer or Administrator provided by paragraph (b); or (3) Excluding coverage which inures to the direct or indirect benefit of the insurer or Administrator,  is void. 4. In any action or proceedings taken by the insurer or the Administrator pursuant to this section, evidence of the amount of compensation, accident benefits and other expenditures which the insurer, the Uninsured Employers’ Claim Account or a subsequent injury account have paid or become obligated to pay by reason of the injury or death of the employee is admissible. If in such action or proceedings the insurer or the Administrator recovers more than those amounts, the excess must be paid to the injured employee or the dependents of the employee. 5. [In] Except as otherwise provided in subsection 7, in any case where the insurer or the Administrator is subrogated to the rights of the injured employee or of the employee’s dependents as provided in subsection 2 or 3, the insurer or the Administrator has a lien upon the total proceeds of any recovery from some person other than the employer, whether the proceeds of such recovery are by way of judgment, settlement or otherwise. The injured employee, or in the case of his or her death the dependents of the employee, are not entitled to double recovery for the same injury, notwithstanding any act or omission of the employer or a person in the same employ which was a direct or proximate cause of the employee’s injury. 6. [The] Except as otherwise provided in subsection 7, the lien provided for pursuant to subsection 1 or 5 includes the total compensation expenditure incurred by the insurer, the Uninsured Employers’ Claim Account or a subsequent injury account for the injured employee and the dependents of the employee. 7. For a lien provided for pursuant to subsection 5: (a) The maximum amount which the insurer or Administrator may recover must be the lesser of: (1) The amount of the lien, as reduced pursuant to paragraph (b); or – 5 – - 83rd Session (2025) (2) One-third of the total amount recovered from the person other than the employer or person in the same employ, as reduced pursuant to paragraph (b). As used in this subparagraph, “total amount recovered” means the total proceeds described in subsection 5, including, without limitation, any attorney’s fees or costs and the monetary value of any virtual currency, securities, real property, personal property or intellectual property which is part of the judgment, settlement or other means of recovery, as applicable, as calculated on the date on which the judgment, settlement or other document providing for the other means of recovery, as applicable, is executed. (b) The maximum amount which the insurer or Administrator may recover pursuant to paragraph (a) must be reduced by an amount equal to one-half of the reasonable costs incurred by the injured employee, or in the case of death the dependents of the employee, in prosecuting or settling the claim against a person other than the employer or person in the same employ. An itemized memorandum of any such reasonable costs: (1) Must be verified by the injured employee, the dependents of the employee or the attorney or representative of the injured employee or the dependents of the employee and provided to the insurer or Administrator. (2) Is subject to judicial review in a court of competent jurisdiction, if a petition is filed within 30 days after the date on which the insurer or Administrator receives a verified itemized memorandum provided pursuant to subparagraph (1). (c) If the insurer or Administrator imposes an offset to the amount of future compensation that the injured employee, or in the case of death the dependents of the employee, is entitled to receive: (1) Such an offset may be applied only against payments of compensation that are not accident benefits; and (2) Each individual payment to which the offset applied must be reduced by not more than one-third of the amount otherwise owed until the total amount of all such reductions equals the net amount recovered by the injured employee, or in the case of death the dependents of the employee, from the person other than the employer or person in the same employ. As used in this subparagraph, “net amount recovered” means an amount equal to the monetary value of the total amount recovered, as defined in subparagraph (2) of paragraph (a), minus: (I) The maximum amount which the insurer or Administrator may recover pursuant to paragraph (a); and – 6 – - 83rd Session (2025) (II) The amount of any attorney’s fees. 8. An injured employee, or in the case of death the dependents of the employee, or the attorney or representative of the injured employee or the dependents of the employee, shall notify the insurer, or in the case of claims involving the Uninsured Employers’ Claim Account or a subsequent injury account the Administrator, in writing before initiating a proceeding or action pursuant to this section. [8.] 9. Within 15 days after the date of recovery by way of actual receipt of the proceeds of the judgment, settlement or otherwise: (a) The injured employee or the dependents of the employee, or the attorney or representative of the injured employee or the dependents of the employee; and (b) The third-party insurer,  shall notify the insurer, or in the case of claims involving the Uninsured Employers’ Claim Account or a subsequent injury account the Administrator, of the recovery and pay to the insurer or the Administrator, respectively, the amount due pursuant to this section together with an itemized statement showing the distribution of the total recovery. The attorney or representative of the injured employee or the dependents of the employee and the third [Text truncated for display. Full text available on LegiScan.]