It’s passed the time when workers’ comp should be striking a better balance between cost reductions, which benefit employers, and correcting benefits for injured workers. This may sound heretical to many workers’ comp professionals. But our system needs to work for both key constituents — employers and workers. Where to start? Begin where the pain can be documented and confirmed for a wide range of points of view.
ProPublica some years ago focused on arbitrary inconsistencies in scheduled benefits among states. They chose an issue which is simple to understand, easy to document, shows up in almost every state, and is one that political moderates can recognize as valid.
A lot of proposed revisions are small bore, most are very technical, some are horrendously complicated. It’s important to focus initially, at a national level, on easy to think of issues that affect every state and can elicit a consensus that a problem in fact exists. Unfortunately, state agencies and their legislative overseers have shown little appetite for assessing the performance of their systems from the perspective of the injured workers.
The first step is to agree if there are problems.
Lack of Coverage for Work Injuries
I am not aware of any state that has carefully reviewed what work injuries (and illnesses) remained uncovered. The most egregious gap may the failure of workers’ comp systems to pay for mental stress arising from well-documented cases of assault and exceptionally frightening encounters.
Connecticut law barred surviving teachers and administrators at Sandy Hook Elementary School from PTSD benefits arising from the massacre on Dec. 12, 2012. Florida law barred these benefits to teachers and administrators at the Marjory Stoneham Douglas High School after the massacre on Feb. 14, 2018.
Some states have been crafting laws to cover PTSD for emergency personnel. So, they have drafting experience. And where laws were passed, the states may have enough experience with actual claims history to know if and how to fine-tune this coverage. What is preventing states from extending coverage to all who deserve it?
Financial Hardship While on Temporary Disability
For a reasonable (and rebuttable) rule of thumb, if an injured worker’s take home income declines by more than 15%, that creates a hardship.
To document the extent of hardship, injured workers need to be surveyed. Here’s how a state agency can make an initial jab at it, drawing from a study I completed.
I arbitrarily selected the job category of electrician. The median gross earned income for electricians in Georgia in 2015 was at $53,670. Making some assumptions about the household, I used a website to calculate that annual after-tax income 78% of the gross, which leads to a weekly take home of $805.
I then found the workers’ tax-free indemnity benefit (67% of gross) $692. That’s a 14% reduction in take home check. If the electrician’s spouse is working, the combined take home income will decline by less than 14%. A state agency needs to run many iterations to estimate what percentage of injured worker households might suffer a hardship.
The injured worker’s life is likely disrupted by suspensions of worksite benefits, such health and other insurance. How big problem is this? Nobody knows. The state agency needs to dig deeper.
Between 2012 and 2018, according to the Oregon Workers’ Compensation Premium Rate Ranking Summary reports, 18 states saw reductions in employer premiums by at least 20%; only three had increases of at least 20%. There’s been a near constant reduction in premiums and injury rates. There are no clouds on the horizon warning of cost increases.
It’s time to restore balance.
ABOUT THE AUTHOR
Peter Rousmaniere is widely known throughout the workers’ compensation industry, both for his writing and consulting experience. Based in the picture perfect New England town of Woodstock, VT, he is a regular on the conference circuit, and is deeply in tune with trends and developments within the industry. His passion is writing and presenting on issues largely related to immigration, and he maintains a blog on the subject at www.workingimmigrants.com.