RELATING TO WORKERS' COMPENSATION.

HB1514

HOUSE OF REPRESENTATIVES

H.B. NO.

1514

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to workers' compensation
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION
1.
�
The legislature finds that early
intervention is vital to ensure the efficient and effective rehabilitation of
employees who suffer a work-related injury.
�

This often begins with the referral of an injured employee for
vocational rehabilitation services.
�

Vocational rehabilitation services are intended to help the employee
return to work as quickly as possible with pay as close as possible to
pre-injury wages.
�
Urgency is needed when
initiating the vocational rehabilitation process to avoid prolonged adverse
effects on injured employees and minimize costs for employers and insurers.

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The legislature further finds that
it is crucial for injured employees to have access to appropriate vocational
rehabilitation services in the State.
�

Many vocational rehabilitation providers have expressed concern regarding
the future availability of services as several providers retire or leave the
practice.
�
It is important for current
and future providers to be properly trained on the vocational rehabilitation
process.

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Accordingly, the purpose of this Act
is to:

����
(1)
�
Clarify the
process for selecting a certified provider of rehabilitation services; and

����
(2)
�
Require a provider
to automatically approve an injured employee for vocational rehabilitation
services if the provider determines that the injured employee will likely
require vocational rehabilitation services to return to suitable gainful
employment.

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SECTION
2
.
�
Section 386-25,
Hawaii Revised Statutes, is amended to read as follows:

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"
�386-25
�
Vocational
rehabilitation.
�
(a)
�
The purposes of vocational rehabilitation are
to restore an injured worker's earnings capacity as nearly as possible to that
level that the worker was earning at the time of injury and to return the
injured worker to suitable gainful employment in the active labor force as
quickly as possible in a cost-effective manner.
�

Vocational rehabilitation shall not be available for public employees
who have retired from a public employer, as defined in section 76-11, with whom
they sustained their work injury.

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Employees of public employers, as
defined in section 76-11, who are eligible for their respective public
employer's return to work program, shall participate in and complete the return
to work program, including temporary light duty placement efforts, as a
prerequisite to vocational rehabilitation benefits under this section.

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(b)
�

The director may refer employees who may have or have suffered permanent
disability as a result of work injuries and who, in the director's opinion, can
be vocationally rehabilitated to the department of human services or to private
providers of rehabilitation services for vocational rehabilitation services
that are feasible.
�
A referral shall be
made upon recommendation of the rehabilitation unit established under section 386-71.5
and after the employee has been deemed physically able to participate in
rehabilitation by the employee's attending physician.
�
The unit shall include appropriate
professional staff and shall have the following duties and responsibilities:

����
(1)
�
To review and
approve rehabilitation plans developed by certified providers of rehabilitation
services, whether they be private or public;

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(2)
�
To adopt rules
consistent with this section that shall expedite and facilitate the
identification, notification, and referral of industrially injured employees to
rehabilitation services, and establish minimum standards for providers
providing rehabilitation services under this section;

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(3)
�
To certify private
and public providers of rehabilitation services meeting the minimum standards
established under paragraph (2); and

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(4)
�
To enforce the
implementation of rehabilitation plans.

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(c)
�

Enrollment in a rehabilitation plan or program shall not be mandatory
and the approval of a proposed rehabilitation plan or program by the injured
employee shall be required.
�
[
The
]

If the injured employee elects to enroll in a rehabilitation plan or
program, the
injured employee [
may
]
shall
select a certified
provider of rehabilitation services[
.
]
no later than thirty days
after the referral is made by the director.

�
Both the certified provider and the injured
employee, within a reasonable time after initiating rehabilitation services,
shall give proper notice of selection to the employer.
�
If the injured employee fails to select a
certified provider within thirty days, the employer shall select the certified
provider of rehabilitation services and give proper notice of selection to the
employee.
�
The injured employee shall
have thirty days after the notice of selection is received to select a
different certified provider of rehabilitation services.

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(d)
�

A provider shall submit an initial evaluation report of the employee to
the employer and the director within forty‑five days of the date of
referral or selection.
�
The evaluation
shall determine whether the employee requires vocational rehabilitation
services to return to suitable gainful employment, identify the necessary
services, and state whether the provider can provide these services.
�
The initial evaluation report shall contain:

����
(1)
�
An assessment of
the employee's:

���������
(A)
�
Current medical
status;

���������
(B)
�
Primary
disability;

���������
(C)
�
Secondary
disability;

���������
(D)
�
Disabilities that
are not related to the work injury; and

���������
(E)
�
Physical or
psychological limitations
,
or both.

���������
If this information is not
provided by the treating physician within a reasonable amount of time,
information from another physician shall be accepted;

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(2)
�
A job analysis
addressing the demands of the employee's employment;

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(3)
�
A statement from
the provider identifying the employee's vocational handicaps in relation to the
employee's ability to:

���������
(A)
�
Return to usual
and customary employment; and

���������
(B)
�
Participate in and
benefit from a vocational rehabilitation program;

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(4)
�
A statement from
the provider determining the feasibility of vocational rehabilitation services,
including:

���������
(A)
�
The provider's
ability to assist the employee in the employee's efforts to return to suitable
gainful employment;

���������
(B)
�
An outline of
specific vocational rehabilitation services to be provided, justification for
the necessity of services, and how the effectiveness of these services is
measured; and

���������
(C)
�
How the vocational
rehabilitation services directly relate to the employee obtaining suitable
gainful employment; and

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(5)
�
The enrollment
form and the statement of worker's rights and responsibilities form obtained
from the department.

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(e)
�
A provider shall automatically approve
vocational rehabilitation services for an injured employee; provided that the
provider determines that the injured employee will likely require vocational
rehabilitation services to return to suitable gainful employment.

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[
(e)
]
(f)
�
A provider shall file the employee's plan
with the approval of the employee[
.
]
no later than ninety days after
the provider submits an initial evaluation report, unless the employer,
provider, and injured employee agree to an extension of that deadline to a
specific date by which the plan shall be completed.
�
Upon receipt of the plan from the provider,
an employee shall have ten days to review and sign the plan.
�
The plan shall be submitted to the employer
and the employee and be filed with the director within two days from the date
of the employee's signature.
�
A plan
shall include a statement of the feasibility of the vocational goal, using the
process of:

����
(1)
�
First determining
if the employee's usual and customary employment represents suitable gainful
employment, and, should it not;

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(2)
�
Next determining
if modified work or other work with the same employer represents suitable
gainful employment, and, should it not;

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(3)
�
Next determining
if modified or other employment with a different employer represents suitable
gainful employment, [
and finally,
]
and,
should it not;

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(4)
�
Then providing
training to obtain employment in another occupational field.
�
When training to obtain employment in another
occupational field is required, the first appropriate option among the
following options shall be selected for the employee:

���������
(A)
�
On-the-job
training;

���������
(B)
�
Short-term
retraining program (less than fifty‑two weeks); or

���������
(C)
�
Long-term
retraining program (more than fifty-two weeks); and

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(5)
�
Lastly, if
training under paragraph (4) is not feasible, then self-employment may be
considered.

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[
(f)
]
(g)
�
A plan may be approved by the director;
provided
that
the plan includes:

����
(1)
�
A physician's
assessment of the employee's physical limitations, psychological limitations,
and ability to return to work.
�
If this
information is not provided by the treating physician within a reasonable
amount of time, information from another physician shall be accepted;

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(2)
�
A labor market
survey indicating there are reasonable assurances that the proposed occupation
for which the employee is to be placed or trained is readily available in the
community when placement begins, or there are assurances of reemployment by the
employer;

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(3)
�
A job analysis of
the proposed occupation, setting forth its duties, responsibilities, physical
demands, environmental working conditions, specific qualifications needed for
entry-level employment, reasonable accommodations, expected estimated earnings,
and other relevant information;

����
(4)
�
The nature and
extent of the vocational rehabilitation services to be provided, including:

���������
(A)
�
Specific services
to be provided;

���������
(B)
�
Justification for
the necessity of the services;

���������
(C)
�
Estimated time
frames for delivery of services;

���������
(D)
�
The manner in
which the effectiveness of these services is to be measured;

���������
(E)
�
Criteria for
determining successful completion of the vocational rehabilitation plan; and

���������
(F)
�
The employee's
responsibilities;

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(5)
�
A report of tests
and copies thereof that have been administered to the employee, including a
statement regarding the need for and use of the tests to identify a vocational
goal;

����
(6)
�
If retraining,
including on-the-job training, is found to be necessary, the estimated cost of
retraining, a description of specific skills to be learned or knowledge
acquired with specific time periods and clearly defined measurements of
success, and the nature, amount, and duration of living expenses;

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(7)
�
The total cost of
the plan; and

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(8)
�
The employee's
approval of the plan.

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[
(g)
]
(h)
�
The employer shall have ten calendar days
from the postmark date on which the plan was mailed to submit in writing to the
director any objections to the plan.

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[
(h)
]
(i)
�
The director may approve a plan that does not
include all of the requirements outlined in subsection [
(f);
]
(g);

provided that the director finds the plan:

����
(1)
�
Is in the best
interest of the employee;

����
(2)
�
Contains
reasonable assurances that the employee will be placed in suitable gainful
employment; and

����
(3)
�
Has been approved
by the employee.

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[
(i)
]
(j)
�
If the plan requires the purchase of any
tools, supplies, or equipment, the purchase deadline shall be included in the
plan.
�
Tools, supplies, and equipment
shall be considered to be the property of the employer until the plan is
determined by the director to be successfully completed, after which it shall
become the property of the employee.
�
If
the plan requires the purchase, etc., the employer shall purchase the items [
prior
to
]
before
the purchase deadline in the plan.

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[
(j)
]
(k)
�
An employee with an approved plan who is
determined as able to return to usual and customary employment may choose to
complete the plan or request a new plan of which the goal may be the employee's
usual and customary employment.

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[
(k)
]
(l)
�
An injured employee's enrollment in a
rehabilitation plan or program shall not affect the employee's entitlement to
temporary total disability compensation if the employee earns no wages during
the period of enrollment.
�
If the
employee receives wages for work performed under the plan or program, the
employee shall be entitled to temporary total disability compensation in an
amount equal to the difference between the employee's average weekly wages at
the time of injury and the wages received under the plan or program, subject to
the limitations on weekly benefit rates prescribed in section 386-31(a).
�
The employee shall not be entitled to
temporary total disability compensation for any week during this period where
the wages equal or exceed the average weekly wages at the time of injury.

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[
(l)
]
(m)

�
The director shall adopt rules for additional
living expenses necessitated by the rehabilitation program, together with all
reasonable and necessary vocational training.

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[
(m)
]
(n)
�
If the rehabilitation unit determines that
vocational rehabilitation is not possible or feasible, it shall certify the
determination to the director.

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[
(n)
]
(o)
�
Except as otherwise provided, determinations
of the rehabilitation unit shall be final unless a written request for
reconsideration is filed with the rehabilitation unit within ten calendar days
of the date of the determination.

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The rehabilitation unit shall issue
a reconsideration determination to affirm, reverse, or modify the determination
or refer the request for reconsideration for hearing.

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[
(o)
]
(p)
�
A reconsideration determination shall be
final unless a written request for hearing is filed within ten calendar days
from the date of the reconsideration determination.
�
All hearings shall be held before a hearings
officer designated by the director.
�
A
written decision shall be issued in the name of the director.

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[
(p)
]
(q)
�
The eligibility of any injured employee to
receive other benefits under this chapter shall in no way be affected by the
employee's entrance upon a course of vocational rehabilitation as [
herein
]
provided[
.
]
in this section.

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[
(q)
]
(r)
�
Vocational rehabilitation services for the
purpose of developing a vocational rehabilitation plan may be approved by the
director and the director may periodically review progress in each case."

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SECTION 3.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

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SECTION 4.
�
This Act shall take effect on July 1, 2026.

INTRODUCED BY:

_____________________________

Report Title:

Workers'
Compensation; Vocational Rehabilitation Services; Certified Providers;
Automatic Approval

Description:

Clarifies
the process for selecting a certified provider of rehabilitation services.
�
Requires providers to automatically approve
vocational rehabilitation services for an injured employee if those services
will likely be required for suitable gainful employment.
�
Requires providers to file an employee's
vocational plan no later than ninety days after submitting an initial
evaluation report, with certain exceptions.
�

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.