On May 8, 2017, a Jefferson County judge ruled two provisions (the $220 weekly compensation cap for Permanent Partial Disability and the 15% cap on attorney fees) of the Alabama’s Workers’ Compensation Act unconstitutional. Because these provisions of the Act cannot be severed from the rest of the workers’ comp legislation, the judge determined that the entire Act is unconstitutional. The judge initially issued a stay of 120 days for his order. However, the judge has since amended that order to extend the stay until further order of the court. So, there is no immediate impact on the existing workers’ compensation system.
By this order, the Alabama Legislature must address the nullified statute. Due to the limited number of days remaining in the current legislative session, such a task is improbable, and an appeal will likely be filed.
Although changes to the statute remain to be seen, this ruling, if not addressed, could have a tremendous impact and present many challenges for employers, workers’ compensation insurance companies and self-insured funds.
It is issues like these that point out the importance of the financial security offered by CompTRUST – $90 million in assets, $42 million in Member’s Equity and the only self-insured fund in Alabama with an A.M. Best Rating.
CompTRUST AGC, as it always has, will continue to provide a stable product in an uncertain market, and will continue to operate "business as usual" under the provisions of the nullified statute until new provisions are dictated otherwise. We will keep our members apprised of any significant developments that occur.