The U.S. Department of Labor recently expressed its top three concerns for the future of workers’ compensation
The U.S. Department of Labor published an article last week articulating its top three workers' compensation concerns. While the National Academy of Social Insurance (NASI) data showed troubling numbers, the DOL emphasized that the research could not fully capture “the uncompensated economic and human costs of work-related injuries, illnesses and fatalities borne by workers, families and communities.” Top issues singled out by regulators include:
The number of U.S. workers covered by workers' compensation has decreased.
After nearly a decade of incremental growth in coverage, covid-19 decimated the little progress that had been made. The National Academy of Social Insurance (NASI) recorded the most significant decrease in covered jobs in a single year, with coverage declining in all but just 12 states. These numbers illustrate the danger of misclassifying workers and the rise of independent contractor status in the “gig economy.”
States are paying fewer total benefits to injured workers.
Benefits paid out to injured workers from 2016-2020 decreased in 40 states. While covid can be blamed for this number partially, total benefits paid were declining in 21 states before the pandemic took hold. DOL officials took concern, especially with the “considerable cross-state differences” in benefits to injured workers.
Some states consideration of making workers’ compensation optional.
While states like Texas are a lone star when it comes to workers’ compensation being optional, certain states are removing requirements for specific occupational coverage, as seen in South Dakota and Wyoming. Meanwhile, legislative proposals in Arkansas, Oklahoma, South Carolina, and Tennessee over the past decade would have allowed for alternative workers’ compensation schemes or options for employers to “opt out” of workers’ compensation.National Academy of Social Insurance’s (NASI) annual report indicates that total benefits paid to injured workers have fallen and that less workers are covered by workers’ compensation compared to previous years.
Claim frequency may be down; however, injury severity is increasing with specific industries such as construction more prone to severe accidents. Experts from the 42nd International Risk Management Institute Construction Risk Conference say that medical advancements continue to make strides, although costs do accompany innovation. Before modern medical advances, injured workers facing catastrophic accidents did not have favorable odds. While the fatality rate of catastrophic incidents is well improved, many of these injured workers are debilitated, which can incur high medical costs. Data from the panel indicated that catastrophic injury expenses have increased by 30 percent in just the last three years. One example includes that of prosthetics, where functional technology has improved capabilities for an injured worker. Before such developments, a prosthetic would cost on average $5,000 now this number can be seen at $40,000.
Claim frequency may be falling; however, injury severity is on the rise in certain industries
The National Academy of Social Insurance (NASI) released its latest annual report regarding the state of workers’ compensation. General findings show that total benefits paid fell between 2016 and 2020 and that workers’ compensation insurance covers fewer workers than in previous years. More than half of U.S. states saw benefit declines of 20 percent or more, with seven of those states witnessing decreases of over a quarter. Only Hawaii saw benefits increase. In terms of medical coverage, standardized medical benefits fell by almost 25 percent during the study’s observation period.A state appellate court ruling concluded that the state’s Workers’ Compensation Commission exceeded their authority
A state appellate court ruled that the state Workers’ Compensation Commission exceeded its authority by imposing conditions on a worker’s future medical treatment. In this particular case the injured worker experienced an injury on the job in 1994 when a forklift hit another forklift while in operation for Caterpillar Logistic Services. Subsequently, the worker suffered chronic neck, shoulder, and right arm injuries. Caterpillar entered into an $86,000 settlement providing that the injured worker waived all rights under the state workers’ compensation act except his right to future medical treatment. Fast forward to 2011, the injured worker filed a formal complaint against Caterpillar as he alleged wrongful denial of medical treatment. The Commission's review found that the radiculopathy from the worker could not be causally related to the worker’s 1994 accident, although gastrointestinal issues could be. Commission officials also said that the care needs for the injured worker to be under one doctor and not be his primary physician. Both parties appealed the Commission’s determination. While a circuit court affirmed the Commission's decision, the appellate court ruled that the circuit court lacked jurisdiction remanding the case back to the Commission, which eventually ended in another settlement. The appellate court emphasized that the state workers’ compensation act does not contain a provision empowering the Commission to attach conditions to its findings of whether future medical care is necessary and reasonable. Due to this precedent, the court concluded that the Commission lacked statutory authority to order the designation of a central treating physician or to disqualify the injured worker’s primary physician from that role.
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