Category Archives: Workers’ Compensation

Cost Shifting: Worker’s Compensation Dirty Little Secret

Today I taught worker’s compensation “Offsets” in the course I teach at Marquette Law School. The students were aghast at the amount of “cost shifting” that occurs in worker’s compensation: that is, medical costs paid by a variety of sources other than worker’s compensation for medical expenses that should be paid by the worker’s compensation insurer.

We all pay an additional price for medical costs borne by group health insurance carriers, Medicaid, and Medicare that should in fact be paid by worker’s compensation insurers. This “cost shifting” occurs in two significant ways. First, if the claim is denied by the worker’s compensation insurance carrier, medical costs may be paid by the worker’s group health insurance or other private insurance company, or through State Medicaid or federal Medicare programs (the cost of which we all pay in taxes). When those claims are settled, the worker’s compensation insurer routinely saves money by reduced negotiated payment contracts with medical providers, between the provider and the group health carrier, Medicare, or Medicaid (rather than the “full boat” payments that should be paid by the worker’s compensation insurer). If the treatment is deemed work-related after a hearing, the worker’s compensation insurer will pay the other insurer, but at reduced rates.

Second, since only about one in ten cases involves any kind of litigation, workers who are not represented routinely bill their group or other insurance carrier for medical treatment that should be paid by worker’s compensation. Bolstering this notion is a recent article in the Insurance Journal. In the article Jonathan Gruber, Professor of Economics at M.I.T. was quoted indicating that worker’s compensation carriers should see fewer claims as a result of more Americans obtaining health insurance under the Affordable Care Act. He said “As more people have health insurance there is less need for them to have injuries covered by worker’s compensation and this should lower worker’s compensation costs.” Nowhere in this analysis is the notion that the appropriate payor for a worker’s compensation injury should be a worker’s compensation insurer, not health insurance premiums (which are shared by us all) nor Medicare and Medicaid (again shared by us all in the form of taxes).

Workers hurt on the job should have their medical treatment paid by the worker’s compensation insurer, who has received a premium for that risk from the worker’s employer. Cost shifting may increase worker’s compensation profits, but it hurts both the employers’ and the employees’ bottom line.

Health Care Testing: A New Frontier for Worker’s Comp

As a worker’s compensation lawyer, I see many news stories through the prism of how the news event or trend will affect injured workers in the worker’s compensation system. A federal judge in Minnesota has ruled that Honeywell, Inc. can begin penalizing workers who refuse to take medical or biometric tests. 

The EEOC had claimed Honeywell’s policy violated the Americans With Disabilities Act and the Genetic Information Nondiscrimination Act. They filed a lawsuit in Minneapolis on behalf of two Minnesota employees of Honeywell.

The tests Honeywell required their employees to take measured blood pressure, cholesterol, and glucose, as well as signs that employee had been smoking. Employees who declined to take the test could be fined up to $4,000 in surcharges and increased health costs. Honeywell said the program is designed to “encourage employees to live healthier lifestyles and to lower health care costs.” Honeywell says the testing promotes employee well-being. Management also indicated “We don’t believe it’s fair to the employees who do work to lead healthier lifestyles to subsidize the healthcare premiums for those who do not.”

The ramifications of such testing for worker’s compensation immediately come to mind. In any kind of an occupational exposure claim, such tests could be used to help deny worker’s compensation claims for employees who smoke, are overweight, have diabetic condition, claims involving occupational back conditions, carpal tunnel claims, and any kind of respiratory complaints. Another “slippery slope” may be the use of these kinds of testing to actually screen prospective employees, since the employer rationale would be that hiring folks with those pre-existing conditions would cost the employer more money.

Does Workers’ Compensation Cover Ebola?

Today’s post comes from guest author Brody Ockander, from Rehm, Bennett & Moore, in Nebraska. The law in Wisconsin would be similar for a healthcare worker who contracted Ebola during the course and scope of their employment.

The recent news of Ebola in the United States has given me pause to think whether the nurses in Texas who contracted the Ebola virus are covered under the workers’ compensation system.

Here in Nebraska, the nurses with Ebola would almost certainly be covered. In Nebraska, occupational diseases are covered as long as the illness or injury was peculiar to the particular trade or employment. Generally, regular diseases that the general public is exposed to are not covered occupational diseases. For example, influenza, colds, or even MRSA (a type of antibiotic-resistant infection) would probably not be covered for a healthcare worker. Those diseases could be contracted in limitless places or circumstances. However unlike those diseases, I would think that Ebola coming from one single, easily identifiable source would be covered and would easily be proven to have come from the job of being that patient’s nurse.

Let’s just hope we never get to a point where Ebola becomes widespread enough that it would not be a covered occupational disease. If it does, we will have more problems than the compensability of a workers’ compensation claim. 

Worker’s Compensation Benefits Increase; Employers Costs Historically Low

A new study released by the National Academy of Social Insurance (NASI) indicates worker’s compensation benefits rose by 1.3% to $61.9 billion in 2012 while employer costs rose by 6.9% to $83.2 billion. Even though total benefits and costs increased in 2012, worker’s compensation benefits and costs per $100 of covered payroll have been lower from 2007 to 2012 than at any time over the last 30 years. In 2012 benefits were 98 cents per $100 of covered payroll while employer costs were $1.32 per $100 of covered payroll. 

Over the last 30 years medical benefits have accounted for an increasing share of total benefits from 33% in 1984 to nearly 50% in 2012. Medical benefits accounted for almost 50% of the $61 billion in total benefits paid. In Wisconsin medical benefits exceed cash benefits, indicating that medical cost containment is a significant issue.

The Academy’s report Worker’s Compensation: Benefits Coverage and Costs 2012 is the 17th in an annual survey. The report provides the nation’s only comprehensive data on worker’s compensation benefits coverage and employer costs.

Death Of A Client

The circle of life always moves forward, with death as the single, inevitable constant. Despite that knowledge, I am always taken aback when I receive word that one of my clients has passed away. Unfortunately, this happens on numerous occasions throughout the year.  Some individuals pass away from the effects of a work injury, and of course, others for a variety of causes both known and unknown.

A worker’s passing is always difficult for family and friends, including myself and our office staff who represented the worker. For many workers, our office has a profound and intimate involvement in their case, including a multitude of in-person conversations and phone communications (many involving significant and meaningful conversations related to the individual’s family and health, well-being, and status for the future).

When an injured worker dies, there is some potential relief for that worker’s dependents in the form of a death benefit claim. While no monetary compensation can be sufficient for a worker’s death, the Wisconsin Worker’s Compensation Act does provide the potential for some benefits for those left behind. 

Specifically, if a worker dies from the effects of a work injury or if a permanently totally disabled employee dies, there is the potential for a death benefit equal to four times the worker’s annual earnings. Statutory “total” dependents are determined by the law: a surviving spouse, a domestic partner who lived with the deceased, or a surviving child under the age of 18 years old (or older if physically or mentally incapacitated). Other rules apply if there are no statutory dependents for those deemed “partially” dependent on the deceased injured worker (partial dependency is capped at two times the deceased’s annual salary). 

Other rules apply under the Worker’s Compensation Act if an injured worker – who has permanent partial disability (PPD) left to be paid – dies with some PPD still owing. Unaccrued permanency disability benefits can be payable to dependents as death benefits, as well. 

Additionally, burial expenses (up to $10,000) are payable in all cases where an employee dies from a work injury, regardless of whether or not there are dependents. 

The rules for dependency benefits, admittedly, are convoluted and difficult to decipher. The rules about who is a total or partial dependent can be confusing and difficult to follow. Competent worker’s compensation counsel is necessary to navigate the ability to pursue a death benefit.

Courthouse Door Slammed Shut for Workers

The Wisconsin Supreme Court held that an injured worker can be forced to accept an offer from a third-party if his employer’s worker’s compensation carrier wants to accept the deal, even if the injured worker wants to try to the case in court.

I was interviewed by Work Comp Central regarding that claim.

I labeled the decision a travesty, indicating it diminished the right of all workers in Wisconsin who, for over 100 years had an unfettered right to sue a third party.  This case,  Adams v Northland, reverses that.  I was dismayed because the decision indicates the worker’s compensation insurer can call the shots and take a deal the worker finds unacceptable.  Essentially, the worker’s compensation insurance carrier should stand in the shoes of the injured worker.  This case allows the insurance carrier not only to stand in its own shoes but to throw away the worker’s shoes.

The worker’s compensation insurance carrier had paid about $150,000 to Adams in medical benefits and compensation after he injured himself while driving a snowplow for the Village of Fontana.  He hurt his neck and spine when his head struck the cab ceiling.  He sued the Northland Equipment Company for putting in the wrong shock-absorbing springs on the plow, which he says would have precluded his injury.

Northland offered to pay $200,000 to settle Adams’ claim and the worker’s compensation insurance carrier asked a judge to compel Adams to accept this settlement.  The Judge did so and the Court of Appeals and Supreme Court affirmed that Judge’s decision.  Justices Bradley and Abrahamson dissented, indicating there was nothing in the deal struck in 1911 when workers gave up their right to sue their employers suggesting that workers would also give up their right to sue a negligent third party.  This decision essentially takes away the right of an injured worker to proceed to trial against the negligent third party if the employer’s worker’s compensation insurance carrier wants to settle.

“Coming and Going” Rule Revisited

The Kansas Supreme Court has just reversed a State Appeals Court finding that an oil field worker was not entitled to worker’s compensation benefits after he was injured while riding home from his workplace.  The case is David C. Williams v. Petromark Drilling, LLC and Ace Fire Underwriters Ins. Co.  The Court reasoned that the nature of field work where an employee has no permanent place of employment but must travel from place to place to perform his duties was an exception to the “Coming and Going” rule.  That rule in most State Statutes indicates an employee is not entitled to worker’s compensation while coming to work or going home from work.

In Wisconsin case law and statutory provisions have extended coverage to the employer’s designated parking lot, travel between the parking lot and employer’s premises, injury off premises from a “spilled over danger” and commuting to work in an employer-provided vehicle used from time to time for job duties.  Wisconsin courts have etched away at the “Coming and Going” exclusion.  While a typical commute is not covered until the worker reaches the company parking lot, if the employer pays wages for the travel time or commute (“on the clock”), an injury during the trip is compensable.  The worker is also covered during the entirety of a special errand or overtime trip required by or for the benefit of the employer.  Also, where the use of a company truck was a “substantial part of the employment contract” a worker killed while commuting to work was found to be in the course of employment. An argument can be made that an employee commuting to work should be covered if required by job duties to have access to the car while at work, even if not compensated for the expense of commuting.

Wisconsin’s Commission and Courts have also wrestled with the distinction between a “traveling employee” who receives statutorily broad coverage, and a regular commuter whose trip to work is barred by the “Coming and Going” rule.

What’s the Connection Between Worker Safety, Employer Profit, and Voting?

Today’s post comes from guest author Rod Rehm, from Rehm, Bennett & Moore.

A recent newspaper article about a Nebraska lawyer fighting against imposing OSHA regulations on small businesses and farms that handle grain illustrates an age-old conflict between Worker (human) safety and Business (corporate) profit. The lawyer argued OSHA compliance is too expensive for small businesses and farms.

I couldn’t disagree more. From my point of view, worker safety is immeasurably more valuable to society than business profit. Human beings are the most important component of any activity, including business. Viewing safety as a cost ignores the cost to the human beings who are burned and maimed by grain explosions, whether they happen at a small business/farm or a huge corporate grain facility.

Farms in Nebraska and Iowa are not required to provide workers’ compensation for their employees. This is justified on the grounds that farms can’t survive such government intervention. I find this an interesting argument from businesses that have long received subsidies from the government. It seems that farm profits are more important than the human beings who do the work to earn those profits.

Our society needs more laws to protect human beings from injury and to compensate them if injured for the profit of others. Candidates for public office need to be asked what matters more to them: Is it human beings or profits that matter more?

Justice Louis Brandeis of the U.S. Supreme Court wrote long ago: “We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”  

If we keep electing representatives who favor the concentrated wealth, then human beings will likely be protected less. These are scary times as the divide between the “haves” and “have nots” continues to grow. Ballots are the only way to tell our representatives that the health and welfare of human beings is paramount. Voting is essential, or we will see more and more concern for profit and less and less concern for human beings.