Today we have a guest post by our colleague Roger Moore of Nebraska.
Insurance began in the Middle Ages, and policies could be written for almost anything. Policies were taken out to protect risks of trade, against the death of a head of state, and for many other forms of speculation. There was almost no limit on what a policy could be written for. Additionally, there was no shared risk as these policies were taken out only by individuals.
In the early 18th century, mutual insurance was created. Instead of individuals essentially placing bets that would pay off if tragedy struck, these policies created communities of members who were concerned with offsetting risk with reward. The lack of tragedy led to the payout of dividends to the members. Gradually, governments forced the transition of insurance from legal gambling on misfortune to companies behaving more like public utilities. Mutual-insurance companies helped the betterment of society with innovations like workplace-safety measures.
Over the last four years Edmund Kelly, former CEO of Liberty Mutual, has pocketed over $200 million in compensation.
In 1911, the first workers’ compensation insurance was written in Massachusetts in the form of a state-subsidized mutual-insurance company. Like most mutual insurance, the aim was the mitigation of risk by providing incentives to reduce risk and demanding small sums from each participant that were then combined into large sums for the victims or beneficiaries of the policy.
In the mid-1990s, insurance companies began pushing for legislation to authorize them to place their assets into holding companies that could then sell stock. Critics believed the policyholders were being divested of their ownership in such an arrangement, but little true resistance was brought to bear. What has transpired as a result of this shift is that increasingly the profits from insurance companies were being captured by its executive leadership instead of being reflected as profits and returned to its policyholders as dividends.
As such, 200 years after mutual insurance was created, history reversed itself. No longer was insurance sold to people who had a stake in the assets and risks on which they bet. The community no longer bore the rewards of mutual insurance as company profits were put in the hands of the elite leadership and not distributed across policyholders. One can surmise that policyholders also lost more control over how claims were handled than was anticipated when mutual insurance was created. Policyholders also likely see little incentive to follow risk-averse practices as they receive no return benefit in the form of dividends as they used to. When profit is the only goal in business only the business itself and, more specifically, its executives truly gain. One indication of this is Edmund Kelly, former CEO of Liberty Mutual. Over the last four years he has pocketed over $200 million in compensation.
Source: The Atlantic
Charlie Domer recently won a significant case that advances the rights and benefits of injured workers. According to our Labor and Industry Review Commission, each, additional invasive joint replacement (which carries a minimum percentage of disability) can be “stacked” together up to a full 100% disability to that joint. (The case is : Knutson (dec’d) v. Flat Creek Eatery & Saloon, WC Claim No. 2001-055356 (LIRC May 24, 2012)).
Specifically, Robert Knutson (who unfortunately passed away while the case was on appeal) suffered an undisputed injury to his left hip in 2001. He underwent no less than ten surgical procedures, at least three of which constituted totalhip replacements. Under Administrative Code section 80.32(3), a “total hip prosthesis” carries a minimum 40% PPD. Based on previous Wisconsin Court and LIRC decisions, generally any subsequent invasive surgery resulting from the same work injury carries an additional, additive PPD rating under Section 80.32 (DaimlerChrysler).
Joint replacements can be problematic, but the Court of Appeals recently confirmed a LIRC decision that awarded a “stacked” 55% for a post-injury medial meniscus repair (with its 5% min) and later total knee replacement (carrying 50% min). MG&E v. LIRC, 2011 WI App 110, 802 N.W.2d 502.
The Knutson case, however, was one of first impression because it dealt with multiple post-injury joint replacements. Knutson argued that LIRC should award the Code minimums cumulatively for each total hip replacement procedure, resulting in 100% PPD. The defense contended that a “natural” hip can only be replaced one time, and therefore, any subsequent or revision surgeries on the artificial appliance do not trigger the 80.32 Code minimums. The ALJ agreed with the respondent. The Commission reversed and awarded 100% PPD to the hip—thereby allowing “stacking” of Code minimums for multiple post-injury joint replacement surgeries. LIRC indicated that 80.32 minimums applied to all joint replacements involving the installation of an artificial device to replace a missing body part, regardless of whether the missing body part was “natural” or had been removed in an earlier procedure.
This case represents a huge win for injured workers, especially as more and more injuries result in multiple hip replacements or knee replacements.
Today we have a guest post from our colleague Leonard Jernigan of North Carolina.
Margaret Anderson, a Park Ranger at Mount Ranier National Park, was killed by an Iraq war veteran who may have been suffering from Post Traumatic Stress Disorder (PTSD). Her tragic death reminded me of several workers I have represented who had this condition after experiencing and/or witnessing horrific trauma in the workplace.
One was a 20 year employee of a public gas company who was heroically trying to fix a gas leak in a neighborhood when the gas line exploded and burned off most of his face. He healed but has flashbacks of the explosion, nightmares, depression and is constantly irritable. Before this event he was a great worker, a good family man and had a good sense of humor. He hasn’t been the same since.
Adjusters, employers, co-workers, attorneys and family members should understand that PTSD is a serious condition that needs immediate medical attention and that the failue to recognize and treat the condition can lead to tragic consequences.
Another client was on an assembly line in Raleigh, N.C. when an explosion sent a ball of fire racing through the plant. The ceiling caved in and a worker right next to her was crushed to death. Fortunately, because of workers’ compensation, these injured workers got timely medical and psychiatric care, but what about those workers who don’t get adequate and quick treatment? Continue reading
This is the third installment in our series on why and how workers’ compensation was established in Wisconsin.
After reaching consensus on the details of the proposed workers’ compensation system, the Industrial Insurance Committee introduced a bill in 1911 that passed both houses of the state legislature. The only significant change made was to restore to employers the assumption of risk defense and fellow servant doctrine in cases where workers elected not to proceed under the new system.
In November of the same year, the first test case was brought before the Wisconsin Supreme Court. The Court affirmed that the legislature had the right to abolish employers’ common law defenses. It also held that the preservation of common law defenses in cases where employees opted out of the new system was based on a reasonable classification which was designed to promote the objectives of the new law and which did not violate the equal protection clauses of the state or U.S. Constitution. The Borgnis case epitomized the reluctance to invoke substantive due process–characteristic of the Court throughout the Progressive Era.
After the Worker’s Compensation Law cleared its constitutional hurdle in Borgnis v. Falk Corporation, it was steadily strengthened and augmented. In 1913, spurred by slow employer acceptance of the law, the legislature provided that any employer who did not explicitly opt out of the law would be presumed to have accepted it. The contributory negligence defense was also added to the list of defenses that employers not electing under the Act were prohibited from invoking. In 1919, the law was expanded to cover all employment-related injuries whether accidental or not, including occupational exposure claims. Finally, in 1931, when workers’ compensation had become a universally accepted part of Wisconsin industrial life, the law was made compulsory for virtually all employers and employees.
Today we have a guest post by our colleague Matt Funk of New York.
Many times insurance medical examinations are considered by injured employees to be the same as Independent Medical Examinations (IMEs). There is nothing farther from the truth. These examinations are bought and paid for by the insurance company and for their benefit.
The insurance carrier doctor is no friend to an injured worker. He or she is a private consultant paid for by the carrier.
You should be prepared for these examinations by knowing your rights and how to protect them:
1) You have the right right to bring a family member or friend with you to the examination.
You can bring your spouse into the examination room during the examination. This is important because it allows for a witness to testify at court about the validity of the examination and to dispute tests that the doctor claims to have done.
2) You are permitted to audiotape or videotape the examination.
And there is nothing in the law that requires you to tell the insurance company doctor that you intend to tape the examination.
3) You should Continue reading
Today we have part 2 in our series on legislative initiatives that may allow employers to “opt out” of Workers’ Compensation across the country.
Although judges and juries in the late 19th and early 20th centuries softened the impact of the three employer defenses (contributory negligence, assumption of risk and fellow servant rule), significant numbers of injured workers were denied benefits. Despite periodic efforts by the Wisconsin Supreme Court and legislature to modify the common law, an increasing number of Wisconsinites during the early Progressive years came to feel that more sweeping changes in the employer liability system were essential. The Wisconsin State Federation of Labor and the Social Democratic Party began to advocate a workers’ compensation system shortly after 1900, and they introduced the first workers’ compensation bill in the legislature in 1905.
Professor John R. Commons of the University of Wisconsin and State Commissioner of Labor Joseph Beck also endorsed workers’ compensation and vigorously promoted it to business groups around the state. Support for workers’ compensation came also from Justice Rouget Marshall of the Wisconsin Supreme Court.
Although a conservative in most areas of law, he used every opportunity on and off the bench to urge a change in what he believed was a defective and imperfect system of common law employer liability. Marshall and his colleagues grew tired of regularly having to issue defensively worded decisions for employers in cases where the court’s sympathies and those of the public were on the side of the injured worker.
Check back later this week for the third installment in this series.