Workers’ compensation law ups protected claim amount, enacts other council proposals

A new law makes updates and technical corrections to make the workers’ compensation system operate more effectively.

The changes follow recommendations made by the Workers' Compensation Advisory Council, whose voting members include equal membership between representatives of employers and labor.

Sponsored by Rep. Dave Baker (R-Willmar) and Sen. Jennifer McEwen (DFL-Duluth), the law is effective May 23, 2025, unless otherwise noted.

The law raises the dollar amount of workers’ compensation claims exempt from seizure or sale for debt repayment. Previously set at $1 million, the threshold is $10 million for injuries incurred on or after Oct. 1, 2025.

Among other updates, the law strengthens protections against insurance premium fraud in the construction industry. Starting Jan. 1, 2026, applicants for zero-estimated exposure policies must attest to the accuracy of their statements with specific language, including that they “have no employees and an estimated exposure of zero.”

Construction employers holding such policies must provide written notification and a copy of the policy to businesses they contract with, who must retain these documents for three years.

The law also clarifies the use of wrap-up policies covering multiple contractors and subcontractors working on a single project. The state shall approve policies for single projects valued at more than $100 million that generate at least $500,000 in workers’ compensation premiums annually, provided project sponsors, contractors and subcontractors have not been convicted of insurance fraud in the recent past. This provision takes effect Jan. 1, 2026.

Additional changes provide technical clarifications, such as:

• updating definitions related to personal care assistants and executive officers;

• expanding definitions to include household and family members as recipients of paid nursing services in cases of permanent total disability; and

• revising reporting requirements and deadlines.

HF3228*/SF3407/CH27

HF3228* / SF3407 / CH27