2025 Nevada Legislative Update - SB258
Who are the sponsor(s) of the bill?
There are 10 primary sponsors (Senators Nguyen, Cannizzaro, Stone, Titus and Buck, and Assemblymembers Nguen, Yurek, Hafen, Marzola, and Torres-Fossett). There are also 34 co-sponsors of the bill.
What does the bill do?
Generally, under workers’ compensation laws in Nevada, an employee is entitled to compensation if the employee was injured during the course of employee. The bill affects personal injury and workers’ compensation cases where the injury of an injured employee were caused by a third-party.
Nevada has existing law that authorizes injured employees to sue for damages against the third-party under certain circumstances. Existing law also allows the insurer to have a lien against the total proceeds of any recovery by the injured employee of that lawsuit. Further, existing law requires the amount of compensation that the injured employee is entitled to to be reduced by the actual damages recovered in that lawsuit.
Senate Bill 258 (SB258) provides for the maximum amount that the insurer may recover for such a lien.
Why was the bill introduced?
In 1986, the Nevada Supreme Court in Breen v. Caesars Palace (715 P.2d 1070(Nev. 1986)) promulgated a formula (known as the Breen formula), that attorneys in the workers’ compensation and personal injury realm utilized in calculating the insurer’s lien. The calculation was further tailored by the Nevada Supreme Court’s decision in Poremba v. Southern Nevada Paving, 388 P.3d 232 (Nev. 2017). The Breen formula was in place until September 19, 2024, when the Nevada Supreme Court issued its opinion in AmTrust North America, Inc., v. Vasquez, 140 Nev. Adv. Op. 61 (2024). In Vasquez, the Nevada Supreme Court found that the Breen Formula had become unworkable and led to inconsistent results, and therefore must be abandoned. The Court ultimately found that to the extent the Court’s previous decisions contrasted with the plain meaning of NRS 616C.215, those decisions were overruled.
Where can I find SB258 in the Nevada Revised Statutes ?
SB258 amended the provisions of NRS 616C.215.
What does SB258 provide?
SB258 provides that the maximum amount for which an insurer may recover 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 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 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 in procuring the recovery.
The bill further requires an itemized memorandum of any such reasonable costs incurred by the injured employee in procuring the recovery to be verified by the injured employee, provided to the insurer, and subject to judicial review.
The bill also limits any offset to the amount of future compensation received by the injured 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.
Where can I find the text of the bill?
https://www.leg.state.nv.us/App/NELIS/REL/83rd2025/Bill/12409/Text
