Last week, Connecticut legislators acted quickly to close a potentially costly loophole in workers’ compensation benefits that was opened by a state Supreme Court ruling in March.

The lawmakers effectively overturned the high court’s decision that changed the way temporary partial disability benefits are awarded. Insurance industry experts warned that this court-initiated change could have driven up workers’ compensation claim costs by as much as 265% for both public and private employers.

In March, the Connecticut Supreme Court reversed established precedent in Gardner v. Dept. of Mental Health & Addiction Services. The ruling determined that workers’ compensation administrative law judges (ALJs) have the authority to grant temporary partial disability benefits for up to 520 weeks, rather than requiring those benefits to be converted to permanent partial disability benefits after the claimant reaches maximum medical improvement.

In response, lawmakers included a provision in a supplemental budget bill to eliminate the ALJ’s discretion to award temporary partial disability benefits and prevent the expected rise in costs tied to the ruling, which would have impacted both the state and numerous self-insured municipalities.

The legislative correction was quickly approved by the Judiciary Committee and incorporated into the budget measure (HB 6863) addressing state budget overruns.

According to a legislative analysis, this fix could save the state more than $4 million annually, though the exact savings may fluctuate depending on the number of cases and rulings by administrative law judges.

Connecticut Court Restores Discretion to Administrative Law Judges in Workers’ Compensation Cases

Representative Jack Fazzino (D-Meriden), vice chair of the Judiciary Committee, described the potential impact of Gardner on the state and local governments as “really very radical.”

Eric George, president of the Insurance Association of Connecticut, told the Connecticut Mirror that municipalities, insurers, businesses, trial attorneys, and labor groups swiftly reached consensus that action was necessary. “That does not happen often,” George noted.

The Gardner decision overturned both a 2024 state appellate court ruling and an earlier workers’ compensation board decision that favored the injured worker’s employer—the state Department of Mental Health—which had argued that administrative law judges lacked such discretion. The Supreme Court justices interpreted the “clear and unambiguous language” of the statute (§ 31-308) to mean that the ALJ “may” but is not required to award permanent partial disability benefits once maximum medical improvement is reached.

The court also rejected the employer’s argument that legislative amendments made in 1993 altered the statute’s wording or meaning regarding the judge’s discretion. Additionally, the court dismissed claims that legislative history of those amendments changed the interpretation.

The Workers’ Compensation Commission employs 15 administrative law judges who handle dispute resolution hearings across its eight district offices.