Category Archives: Legislation

“No Tengo Documentos”: Undocumented Workers’ Compensation

Representing injured workers in Wisconsin is a challenge; representing undocumented workers presents some additional obstacles. 

Many undocumented workers toil in extremely hazardous jobs resulting in injuries. While federal law clearly bars their employment, the real world practice of hiring undocumented workers is undeniable. The U. S. Immigration and Naturalization Services and the Immigration Reform and Control Act (IRCA) have made it illegal for employers to knowingly employ undocumented workers. 

Employers have attempted to use the IRCA as a defense to deny payment to injured workers by stating they would rehire the employee were it not illegal to do so. The Wisconsin Worker’s Compensation Act contains no provision for terminating disability compensation where an employee is terminated, so long as the employee is still temporarily disabled. The Commission has so indicated (see Arista-Reav Kenosha Beef, 1999 WL 370027, LIRC May 5, 1999).  The Commission has routinely rejected employer claims that undocumented workers occupy a different position under workers’ compensation because they are legally precluded from obtaining other employment until they resolve their immigration status.

Employers may still argue that certain benefits are not available given the circumstances of each case. For example, federal law requires valid citizenship to qualify for vocational rehabilitation benefits, so vocational rehabilitation (school retraining) would not be available to an illegal immigrant whose permanent restrictions cannot be accommodated by the employer due to illegal status. Denying an injured illegal immigrant Loss of Earning Capacity benefits on the notion that “but for” the illegal status, the employer could accommodate permanent restrictions is a trickier question. The Commission recently ruled in Zaldivar v. Hallmark Drywall, Claim No. 2014-WL-5350849 (Sept. 30, 2014) that an undocumented worker does in fact have a Loss of Earning Capacity and that one factor in determining that loss would be his illegal status.

Other states have wrestled with the same issue and come up with a similar result. In Iowa the Supreme Court held that an undocumented worker was indeed an employee potentially entitled to benefits. Staff Management v Jimenez, 839 N.W. 2d, 640 (Iowa 2013). The Iowa Court said the purpose of IRCA was to inhibit employment of undocumented workers, not to diminish labor protections (such as workers’ compensation) for undocumented workers. Tennessee held that an undocumented worker was an employee and had the same rights under workers’ compensation that all other employees had.  (See Torres v. Precision Ind, Inc. Tennessee Court of Appeals Aug 5, 2014). A similar result was reached in Wyoming (Herrera v. Phillips, 334 p. 3rd 1225 (Wyo. 2014), where, after an injury, the employer asked the worker: “You’re illegal, aren’t you?”.  The Pennsylvania Supreme Court reflects the rule in most states that an undocumented worker is an employee but once the employee recovers so that they can pursue some level of work, the disability benefits may be suspended.  Reinforced Earth v. W.C.A.B., 810A. 2d 1999 PA 2002.

Representing undocumented workers continues to pose challenges, but the courts have recognized their right to compensation for work injuries.

Alternatives to Workers’ Comp: Paranoia or Possibility

I joined a national organization of lawyers representing injured workers (the Work Injury Law and Advocacy Group) twenty years ago when it was first formed. Then, I heard horror stories about legislators messing with an otherwise stable workers’ compensation system after every election cycle. My colleagues in other states were constantly fighting battles over workers’ compensation “deform.” 

I thought we were insulated in Wisconsin because we had a workers’ compensation advisory council composed of labor and management who every two years fought out a compromise bill and submitted it to the legislature, which automatically rubber-stamped the proposed bill without changes. That changed in Wisconsin in 2014. For the first time in nearly 50 years, the Republican legislature rejected the “agreed upon” bill proposed by the workers’ compensation advisory council, despite the approval of the bill by management members.

Governor Scott Walker’s most recent budget contains a provision to dismantle the workers’ compensation system as we know it. Those of us representing injured workers (and those rational members on the management side) are busy lobbying to remove the workers’ compensation dismantling provisions from the budget.

It is no secret that many major corporations dislike workers’ compensation, despite statistics indicating premiums are at their lowest for employers, and profits at their highest for insurers. However, nearly two dozen major corporations including Wal-Mart, Nordstrom’s and Safeway are behind a multi-state lobbying effort to make it harder for workers hurt on the job to collect workers’ compensation benefits. The companies have financed a lobbying group the Association for Responsible Alternatives to Workers’ Compensation (ARAWC) that has already helped write legislation designed to have employers “opt out” of a State workers’ compensation system. ARAWC has already helped write legislation in Tennessee. That group’s executive director Richard Evans told an insurance journal in November that the corporations ultimately want to change workers’ compensation laws in all fifty states. Lowe’s, Macy’s, Kohl’s, SYSCO Food Services, and several insurance companies are also part of the effort. The mission of ARAWC is to pass laws allowing private employers to opt out of the traditional workers’ compensation plans that almost every state requires businesses to carry. Employers who opt out would still be compelled to purchase workers’ compensation plans, but would be allowed to write their own rules governing when, for how long, and for which reasons an injured employee can receive medical benefits and wages. Two states, Texas and Oklahoma, already allow employers to opt out of State-mandated workers’ comp. In that state, for example, Wal-Mart has written a plan that allows the company to select the physician and the arbitration company that hears disputes. A 2012 survey of Texas companies with private plans found that less half the companies offered benefits to seriously injured employees or the families of workers who died in workplace accidents. 

Oklahoma passed an opt out measure in January 2014 and the oil and gas industry along with major retailers such as Hobby Lobby pushed hard for the change. ARAWC wants to take that Texas and Oklahoma model nationwide. Seeing the workers’ compensation provision in Wisconsin’s budget bill as part of this overall “scheme” may seem paranoid, but the history of recent “deform” legislation suggest the connection is at least a possibility. 

See the complete article at http://www.motherjones.com/politics/2015/03/arawc-walmart-campaign-against-workers-compensation.

URGENT: Let’s Keep Wisconsin’s Worker’s Compensation System the Best in the Nation!

Wisconsin’s worker’s compensation system—established in 1911 and part of the “Wisconsin Idea” in politics—has been in place longer than any other in the country and is the envy of other states. The Governor’s Budget Bill (2015 SB 21) proposes major changes to the structure and substance of Wisconsin’s nationally-recognized worker’s compensation system. The proposal would remove the Worker’s Compensation Division from the Department of Workforce Development and then split up previously integrated components, with the adjudicatory functions (administrative law Judges) moving to the Office of Hearings and Appeals (in DOA) and the regulatory, customer service, and claims management functions going to the Office of the Commissioner of Insurance.  Among other significant changes, Judges would be reduced to solely adjudicatory functions, no longer assisting with the law’s administration, and then cross-trained for other legal areas.  The proposals also eliminate the requirement that compromise agreements be approved by ALJs.  The proposed changes could have a hugely negative impact on Wisconsin:

1) Destabilizing effect on insurance carriers, employers, and taxpayers:

Worker’s compensation insurance is a major industry and employer in our state. Total premiums collected for worker’s compensation insurance were approximately 1.75 billion dollars in 2013.  The system as a whole works well for all stakeholders.  Workers generally receive timely benefits with excellent return to work rates.  The system cost to employers is low, as employer premiums have been very stable (rising less than 2.35% on average in the past six years; less than inflation).  Worker’s compensation insurance companies like to do business in our state because of the system’s stability and the corresponding ability to earn profits.  Indeed, at the end of 2014, almost 300 insurance companies writing and competing for worker’s compensation insurance business here.

The worker’s compensation advisory council assists with the system’s stability.  The council is comprised of representatives of labor, management, and the insurance industry, as well as medical provider liaisons.  The council’s agreed-upon changes to the worker’s compensation law, which historically were approved by the legislature, allowed for continual effectiveness and efficiency. 

 The current budget proposal had no input from the advisory council or stakeholders. If the bill passes, the advisory council process is likely over.  Without the council’s steadying process, Wisconsin could face substantial swings in its worker’s compensation law.  Fluctuations in the law will have an immediate impact on the bottom line for insurers, employers, and medical providers. Insurance companies could avoid our state. Employers could face large swings and spikes in premium rate.  Medical providers could see negative impacts on reimbursement rates.

 2) Governmental overreach on a system supported by private business: 

The current Worker’s Compensation Division (at DWD) is not funded by taxpayers; virtually the entire system is funded by assessments from worker’s compensation insurers and self-insured employers.  Thus, private businesses fund the Division, including payment for judges, staff, IT costs, rent, etc.  Along with its payments and the advisory council process, the insurance industry has helped shape the law into its current efficient form.

The Budget Bill suggests that the government has a better handle on the system than those private industries that craft and support it.  The bill proposes no changes in the funding of the system—thus, the worker’s compensation insurance industry will be paying for a soon-to-be inefficient and greater litigious system.  Presumably, the worker’s compensation insurance industry wants to fund staff and judges that have expertise in worker’s compensation—not those “cross-trained” in other areas.  The industry should favor a coherent, integrated system for administering their claims.

Additionally, with a current system that uses virtually 0% taxpayer dollars, the Budget Bill proposal creates an increase in taxpayer costs.  The cost of a “simple” physical move of personnel has to come from somewhere.  There is a huge IT cost—likely in the millions—based on the current system and software of the worker’s compensation division.

3) Less efficiency = Increased claim costs = Increased premiums:

Based on independent studies, Wisconsin workers are paid more quickly and return to work sooner than virtually any other state.  Wisconsin is in the top 10 for lowest cost per worker’s compensation claim.  Wisconsin also has one of the lowest amounts of litigated injuries in the country—with almost 85% of cases resolved without dispute or attorney involvement.  The studies indicate that credit for these positive outcomes is from the efficient administrative process and personnel at the current Division, who actively monitor claims and promote timely reporting and administrative resolution of disputes and concerns. For example, a Judge currently can hold an informal telephone conversation between an injured worker and an insurance company adjuster to resolve a dispute about the appropriate legal payment.

The current proposal is to split up this efficient administrative structure without any rational basis.  The Judges would be spun off into an entirely new agency and separated from the other division personnel.  Private settlements could occur without the valuable Judge oversight and protection.  The efficiency of the administrative system is lost by splitting up the division, and increased litigation is a guarantee.  (As an example, if I want to buy a hot dog, it seems blatantly inefficient to require purchase of hot dog in one place and then the bun in another). 

Without division assistance or oversight, workers will seek counsel.  Litigation will occur over previously-resolvable issues.  Attorneys will litigate the validity of the private settlements.  Increased litigation means increased claims costs, which means increased premiums for employers.  The volume of increased litigation also could force the need for more employees at the new agencies.

 We should maintain our place at the pinnacle of worker’s compensation systems and not look to poor analogies suggested from other states like Florida (comp law declared unconstitutional) or Texas (an opt out system, bringing in the possibility of civil litigation).  The administration’s citation to Illinois’ structure is misplaced as Illinois arbitrators/judges are directly part of the state’s worker’s compensation state agency.

4)  Negative impact on medical providers:

Medical cost payment is currently 2/3 of all payouts in worker’s compensation claims (in 2012, medical providers received almost $600 million total, while worker payments were about $275 million). Under current law, Judges review and approve all compromises, which serves to protect the interests of workers, medical providers, and group health carriers.  The Judges make sure the bills are satisfied.  Logic dictates that private settlements mean more claims will be closed—cost-shifting to medical providers.  Insurers will attempt to settle claims early and for smaller sums of money (like in civil litigation).  More closed claims means that medical bills and treatment that would have been covered within the 12 year statute of limitations by a worker’s compensation insurance company will now be shifted to the worker’s health insurance or none at all.  Thus, medical providers will be accepting lower Medicaid/Medicare reimbursement rates for charges that should have been under worker’s compensation.

 5) Cost-shifting of worker’s compensation system to taxpayers, via Medicaid/Medicare. 

Just as the above, with the allowance for private settlements, we will see an exponential increase in claims being closed sooner than in the past.   A closed claim immediately shifts the costs for future medical care to the worker’s own health insurance, including Medicaid and Medicare.  There is no denying an increase in taxpayer-funded health care costs if the current proposal moves forward.

ACTION IS REQUIRED.  Why “fix” a nationally-recognized system that is not broken?  If you favor the continuation of Wisconsin’s worker’s compensation system, contact your Wisconsin legislators now.

The Bill is Dead: Worker’s Compensation Agreed-Upon Bill Fails

Unfortunate news in the world of Wisconsin worker’s compensation: the agreed-upon bill is dead.  A post-mortem can be found at WisconsinWatch.org (“Titans clash, worker’s comp changed die“).  It is a near certainty that no changes to the worker’s compensation law will happen this year.

We previously discussed — in this blog–the historical efforts and incredible value that the Worker’s Compensation Advisory Council provides to the comp system in our state.  For four decades, the Council–made up of equal members from labor and management representatives–essentially create a collectively bargained bill that is presented to the legislature regarding potential changes to the worker’s compensation act.  This Council process involves hearings held across the state, and the Council requests and includes input from other affected groups (like medical providers).  Every two years, the Council process results in an “Agreed-Upon” bill that the legislature historically approves without signficant debate.

The sucess of the Council is known throughout our state’s comp system–often recognized as a national model (and even a source of jealousy from practitioners in other states).  The agreed-upon bill process stabilizes the worker’s compensation system, producing a beneficial result for all players in the system.  We hear, time and time again, the value of stability and known costs from employers, insurance companies, and medical providers.

Unfortunately, in 2014, antagonism for the Council process arose from an unlikely source and the agreed-upon bill failed (The bill never made it out of committee and to the legislature for a vote).  While the representatives for injured workers, employers, and insurance companies agreed to the comp law changes, the opponents of the bill largely came from the medical community and medical providers.  The full text of the agreed-upon bill can be found here.  The bill contained a number of benign or historically “normal” changes, like increases in the permananent partial disability (PPD) rate for injured workers and some other procedural fixes.  The bill, however, contained some additional, significant changes to the law.

One provision involved the continuation of an injured worker’s health insurance during a healing period. Currently, there is no obligation for an employer to continue a worker’s health insurance after being off work following a work injury.  The provision would benefit workers (and their families) by keeping health insurance coverage after suffering an injury through no fault of their own.  Additionally, it likely would benefit employers and insurance carriers by allowing a worker to get the necessary medical treatment and back to work quickly, even in disputed claims.  Despite the provision’s benefits, in the current political climate, any suggestion of “mandated” insurance receives a cool reception from certain politicians.  This provision, however, did not kill the bill by itself.

Arguably the biggest change involved a future, potential medical fee schedule in hopes of lowering the cost of medical expense reimbursement.  The drumbeat for change has grown over the years as insurance carriers have noted the rising costs of medical bills in the comp system.  As a colleague noted, about 20 years ago, 2/3 of the benefit payments in a worker’s compensation case went to the employee, with 1/3 to health care providers.  Now, the opposite holds true–with almost 2/3 of every worker’s comp “dollar” going to reimburse medical providers.  The Council process was tasked with addressing the rising costs of medical bills in the system.

Medical provider organizations were present throughout the advisory council process. The organizations were asked to present proposals regarding reining in medical expenses.  The agreed-upon bill resulted in a proposed future medical fee schedule that would be developed by the Worker’s Compensation Department.  The Department would address the details, but in general, the fee schedule would be tied to average group health insurance reimbursement rates plus 10%.  

We will leave the discussion for another day about the nature of the fee schedule and whether it was generous, draconian, or somewhere in between.  Certainly the medical provider community overall rejected the proposal.  Lobbying efforts ensued.  The agreed-upon bill–for the first time in historical memory–was never even presented for a vote.

The future remains uncertain.  Many needed changes for injured workers are collateral damage from the failure to pass the bill.  Rising medical costs will remain an ever-present danger to the viability of the worker’s compensation system.  Presumably, the Advisory Council will reconvene and start the stabilizing process anew–with hopes for better success ahead.

 

 

 

Message to Wisconsin Legislators: Hands Off the Advisory Council

For the last 40 years, the Wisconsin Worker’s Compensation Advisory Council advises the Worker’s Compensation Department and the Legislature on policy matters concerning the development and administration of the worker’s compensation law.  Overall, the Council has been an unequivocal success.  Unlike the volatility found in other states, the Wisconsin Council maintains the overall stability of the worker’s compensation system without regard to partisan changes in the legislative or executive branches of government.  The Council provides a vehicle for labor and management representatives to play a direct role in recommending changes in the worker’s compensation law to the legislature.  This year Republican legislators have already muddled up the Unemployment Compensation Advisory Council, making recommendations that have rolled back unemployment compensation standards which have been in place for decades. 

Recent news indicated that Republican legislators are questioning the use of the Council in the worker’s compensation system.  These Republican politicans, including Dan Knodl, the Chair of the Legislature’s Labor Committee, have indicated they plan to send recommendations to the Council on possible cost saving changes.  Those “cost savings” were part of the budget process in which the legislature made changes to the Unemployment Compensation program, reducing benefits to employees without the support of the Labor and Management Advisory Council. 

 

The Worker’s Compensation Advisory Council, composed of five management, five labor, and three non-voting insurance members appointment by the Secretary of the Department of Workforce Development and chaired by a Department employee, meets regularly at different sites around Wisconsin.  The public is welcome at these meetings to offer their concerns.  The Council obtains input from various worker’s compensation constituents including interested members of the legal, medical, labor, management, insurance, and employer communities.  Hearings on proposed changes are held followed by Advisory Council deliberation.  With input from all of these sources, the Council attempts to produce a well-balanced bill.    

As a general rule, business and insurance interests thrive on stability and known costs.  The Council’s work provides this certainty for the players in the worker’s compensation system.  In the interests of appearing “business friendly”, a Republican end run outside of the Council may actually produce the exact opposite effect—uncertain and fluctuating premiums, costs, and legal issues.The Council has always produced an “agreed upon bill” which results in annual changes in benefit rates and substantive law.  The bill proceeds to the Labor Committees and the Wisconsin Assembly and Senate where, after passage, the Governor signs the bill into law.  This process has worked and created stability in Wisconsin for many decades, a system that other states can only envy.  The successful Advisory Council process should not be altered by outside influence from the legislature. 

Making A Difference In Washington – The Medicare Secondary Payer and Workers' Compensation Settlement Agreement Act

Today’s post comes from guest author Catherine Stanton from Pasternack Tilker Ziegler Walsh Stanton & Romano.

In addition to helping our clients receive the benefits they are entitled to through the courts and other adversarial means, we are prooud to work with our elected officials to produce legislation that will benefit working people. A few days ago, a bill we support, the Medicare Secondary Payer and Workers’ Compensation Settlement Agreement Act, was formally proposed. We encourage you to call and email your representatives and let them know that you support this law.

The press release with additional background follows:

 

Reps. Reichert and Thompson Introduce Bipartisan Medicare Secondary Payer and Workers’ Compensation Settlement Agreement Act

Washington, D.C. – Today, U.S. Reps. Dave Reichert (R-WA) and Mike Thompson (D-CA) introduced the Medicare Secondary Payer and Workers’ Compensation Settlement Agreement Act, H.R. 1982 into the House of Representatives.

The legislation aims to protect injured workers whose workers’ compensation claims overlap with Medicare coverage. Far too often, these claims are subjected to lengthy and cumbersome reviews by the Centers for Medicare and Medicaid Services (CMS) to determine appropriate set-aside amounts to pay for future medical costs in which Medicare may have an interest. The delays associated with this review place unfair burdens upon the injured party.

“This is a common-sense measure to ensure that hard-working Americans are not left in limbo because of inefficient bureaucratic procedures,” said Rep. Reichert. “Injured workers must have the confidence that their heath care claims will be processed in a fair and timely manner. By introducing this bill, Rep. Thompson and I aim to do just that: protect our hard-working citizens by making sure our systems serve them and their families.”

“The last thing injured workers should have to worry about is if needless bureaucracy is going to prevent their medical bills from being paid,” said Thompson. “This bill will make sure hard working families’ medical claims are processed efficiently and quickly, it will reduce bureaucratic headaches for businesses, and it will save taxpayers money. I will continue working with Congressman Reichert to get this bipartisan bill signed into law.”

Background

The Medicare Secondary Payer and Workers’ Compensation Settlement Agreements Act establishes clear and consistent standards for an administrative process that provides reasonable protections for injured workers and Medicare. It would benefit injured workers, employers and insurers by creating a system of certainty, and allows the settlement process to move forward while eliminating millions of dollars in administrative costs that harm workers, employers and insurers.

The legislation has widespread support from groups such as the American Insurance Association, the American Bar Association, the National Council of Self-Insurers, Property Casualty, Insurers Association of America, UWC-Strategic Services and the Workers Injury Law and Advocacy Group (WILG).

Let OSHA Do Its Job

OSHA is being prevented from fulfilling its mission.

Today’s post comes from guest author Paul J. McAndrew, Jr. from Paul McAndrew Law Firm.

In 1970, Congress passed the Occupational Safety & Health Act (the Act), which created the Occupational Safety & Health Administration (OSHA). Among other things, the Act requires every employer to provide a safe workplace. To help employers reach this goal, OSHA promulgated hundreds of rules in the decade after it was created. OSHA’s rulemaking process has, however, slowed to a trickle since then.  

While the National Institute for Occupational Safety & Health recently identified over 600 toxic chemicals to which workers are exposed, in the last 16 years OSHA has added only two toxic chemicals to its list of regulated chemicals. This is because Congress, Presidents and the courts have hamstrung OSHA. For example, in March 2001 the Bush Administration and a Republican Congress effectively abolished OSHA’s ergonomics rule, a rule the agency had worked on for many years. 

These delays and inactions have caused more than 100,000 avoidable workplace injuries and illnesses.

These delays and inactions have caused more than 100,000 avoidable workplace injuries and illnesses. Workers are being injured and killed by known hazardous circumstances and OSHA can’t act.

Congress and the President need to break this logjam – we need to free OSHA to do its job of safeguarding workers.

Hurrah for the Wisconsin Workers' Compensation Advisory Council

Every time I read an article about the extreme contentiousness between employers and employees that manifests itself in many States’ legislatures concerning worker’s compensation legislation, I am again reminded of the workings of Wisconsin Workers’ Compensation Advisory Council. Recently, the Republican-controlled Washington State Senate passed three contentious measures intended to save businesses money by changing worker’s compensation rules. Essentially, the bills would overhaul compromise settlement agreements, lowering the age of eligibility from 55 to 40, and allow businesses to schedule medical evaluations so that business can move injured workers through rehabilitation more quickly. Republicans took the Senate in Washington.

The Council aims to maintain the overall stability of the workers’ compensation system without regard to partisan changes in the legislature or executive branches of government

The Wisconsin Workers’ Compensation Advisory Council was created in 1975 to advise the Department and legislature on policy matters concerning the development and administration of the worker’s compensation law. The Council aims to maintain the overall stability of the workers’ compensation system without regard to partisan changes in the legislature or executive branches of government (given the contentiousness of recent Wisconsin executive and legislative elections, this is a real blessing for injured workers and for worker’s compensation practitioners). The Council provides a vehicle for labor and management representatives to play a direct role in recommending changes in the worker’s compensation law to the legislature.

The Council, composed of five management, five labor, and three non-voting insurance members appointed by the Secretary of the Department of Workforce Development and shared by a Department employee meets regularly at different sites around Wisconsin. It occasionally assigns special topics to study committees on such issues as medical cost, permanent disability rates, and attorney fees. The medical committee assigned in the mid-1990s to report on minimum permanency percentages for surgical procedures, for example, issued its findings which resulted in the schedule contained in the Administrative Code. The Council obtains input from various worker’s compensation constituents including interested members of the legal, medical, labor, management, insurance, and employer communities. Public hearings on proposed changes are held, followed by Advisory Council deliberation. The Council has always produced an “agreed upon bill” which results in annual changes and benefit rates and substantive law. This system works in Wisconsin and would be a good template for other states as well.