I thought of this yesterday morning in the shower, and admittedly have not had the opportunity to fully flesh the idea out. Fortunately, failing to think something completely through has never prevented me from writing about it, so what the hell. I might as well let this one rip.
I participated Tuesday in a Twitterchat with a number of knowledgeable people from the workers' comp theater. A Twitterchat is when a collection of people get together via Twitter to discuss a topic using a common hashtag; in this case it was #workcompchat. It was a moderated conversation of invited panelists, with questions being asked of the group about every five minutes. The unique thing about a Twitterchat is the audience may also interact and contribute. In addition to panelist input, you have comments from other participants. Then everyone begins retweeting everything everyone else just said. The moderator welcomes newcomers, and everyone retweets the welcome extended by the moderator to the newcomer. Eventually everyone begins retweeting the retweets of both the welcomes and everything everyone else just said. The end result is not dissimilar to a room full of people all talking at the same time. Except that with the severe 140 character limitation of Twitter, it is more like stilted outbursts of patients suffering Turrets syndrome. So it is a very large room full of people with Turrets syndrome all shouting at the same time, as well as repeating what every other patient just shouted.
And that is a Twitterchat. But I digress…..
One of the questions posed to the group was related to Exclusive Remedy, and how it may be impacted in the year 2015. Exclusive Remedy, for those of you who happened by this blog while desperately searching for anything to help you complete tomorrow's school report assignment on workers' compensation, is the tenet that says employees may only be compensated for workplace injuries and illness through the workers' compensation system. The benefits are generally limited to medical treatment and lost wages, and they cannot sue for damages, including pain and suffering. This is available in exchange for a “no fault” injury system that is supposed to care for the employee regardless of who or what caused the accident. It was called the “Grand Bargain”, and replaced a chaotic situation early last century where injured workers were left with nothing but a long fight ahead of them, and litigation costs and financial liabilities were open ended for the employer.
The Grand Bargain fixed that by establishing workers' compensation as a no-fault safety net, and the exclusive remedy for injured workers' in our nation.
There has been a great deal of discussion about this in recent months, as some of us, including yours truly, have been warning that changes in both the industry and societal expectations are working to undermine the concept of exclusive remedy. A number of court cases around the country, most notably in Florida and Oklahoma, have put the topic front and center for the industry. I wrote recently that general threats to exclusive remedy are coming from 3 evolving areas:
- The assignation of guilt, or blame, in a no-fault system.
- The erosion of benefits provided injured workers' to the point they are no longer adequately protected by the system.
- Increasing burdens on employers now responsible for co-morbidity and social issues not of their making.
I covered in that article how each of these three categories is influencing, in its own way, the erosion of exclusive remedy in workers' compensation. What I had not covered, indeed had not even really given much thought to, was how these three areas are influencing each other, and collectively how they must all be addressed in order for workers' comp as an exclusive remedy to remain viable for its second 100 years.
Since those three trends have clear contradictions and conflicting effects, the answer is clear.
We need another Grand Bargain in workers' compensation.
Starting with the final bullet point and working backwards, please allow me to explain. Employers are under tremendous cost pressures having to pay for conditions and societal expectations not foreseen in the original Grand Bargain. Co-morbidities caused by an aging workforce are bringing tremendous expense to a system that now must treat obesity, diabetes and more before it can address the actual workplace injury. Additionally, employers find that socioeconomic expectations (entitlement mentality) are increasing cost burdens even further. This can be recognized in requests and demands for smoking cessation treatments, supplemental and specialized equipment, as well as the relentless drive (for some) to permanent total disability.
The second point, the erosion of benefits provided injured workers', is often the result of a political push to reduce cost burdens on employers. Those employers, affected by the trends previously noted, are pushing for cost savings wherever possible, and the result can be the elimination of base benefits; actions that courts are now finding unacceptable, and indeed outside the spirit of the original grand bargain.
The first point, the assignation of guilt, or blame in a no-fault system, is also a result of pushback on a system that has become both expensive and overly process intensive. Courts and legislatures across the land have started chipping away at benefits by either assigning fault to an employee and subsequently denying benefits, or establishing parameters that limit or eliminate benefits if certain criteria, related to such things as safety or drug use, is not met.
So on one hand we have exorbitant costs related to many factors not connected to the injury, and on the other hand we have cost control efforts resulting in the reduction of benefits and the associated safety net through both legislative action and judicial decree. How can a new Grand Bargain reconcile those?
The answer lies in those aforementioned socioeconomic changes and expectations. Workers’ compensation operates in a different world than the one in which it was initially established. We must acknowledge those changes, and form an agreement that is based on today’s realities. That means that the hugely successful and wildly popular (sarcasm intended) healthcare reform, the ACA, commonly known as Obamacare, must play a key role in this new Grand Bargain.
The requirement to own health insurance is now the law of the land. Everyone is required, by law, to possess a government approved health insurance policy, whether purchased through a heavily subsidized exchange, on the open market, or through an employer who, in many cases, is now required to provide it. Medicaid has been greatly expanded in many areas to cover the gap created by the poor and unemployed. In theory, and according to law, almost everyone in the nation should now have adequate health insurance coverage.
That means, theoretically anyway, that medical treatment for non-work related conditions such as obesity, diabetes and smoking cessation should be available to all. There is no need (theoretically anyway) for workers’ compensation to any longer absorb the cost of treatment for these unrelated conditions that stand in the way of addressing the actual work associated injury.
Therefore, the first standard of the new Grand Bargain should be this:
Conditions unrelated to the actual work injury will no longer be paid for by workers’ compensation. They will be the responsibility of the individual and their associated health plan. Failure to secure appropriate health coverage as required by law shall not become the burden or obligation of the employer.
The argument might be made that an employer who is required, but fails, to offer insurance should not benefit from this arrangement. However, the employer will be paying hefty fines for that action, and the individual is not absolved of their obligation to secure coverage. They are no different in that respect from the almost 50% of the workforce that toils for small employers in this country, who are not legally obligated to provide coverage.
Of course every successful bargain, every compromise, must have a commensurate offering that balances the equation. In this case, the second standard of the new Grand Bargain, which includes two parts, will be:
- Workers’ compensation becomes once again a true no fault system.
Employers could treat violations of rules and policies as disciplinary actions, but not as a basis for denying benefits. If a lineman fails to use a required safety glove or a metal worker injures himself while under the influence, write them up or fire them for the act, but as far as workers’ comp is concerned, no fault is no fault.
- Provide benefits adequate to properly care for injured workers.
Some states have pared benefits to the point where even workers’ comp professionals question their efficacy. Florida’s (currently challenged) 104 week cap on TTD benefits is an excellent example. Benefits must be provided that give adequate medical care and proper indemnity.
And that, quite simply, is the new Grand Bargain we should consider. I have never advocated that workers’ comp should be a 100% income reimbursement plan; that notion is ridiculous for reasons most will understand. Yet workers’ comp is supposed to be a safety net, and as such we should make sure the holes in it are not so big as to allow injured workers to fall through.
I recognize severe pitfalls lie ahead with this idea. First off, despite glowing media reviews to the contrary, millions of people in the United States remain uninsured. Even many of the much ballyhooed group who have successfully used the exchanges are people who had coverage but lost it due to the same law that required them to buy it. The net gain in numbered of insured's has been disappointing to all but the most ardent of ACA supporters. That, of course, means that the new Grand Bargain could imperil those who have never secured health insurance.
Of course, another way to say that is that the new Grand Bargain could imperil those who have never obeyed the law regarding health insurance. We can make exceptions for those people in regards to workers' comp, but frankly we either follow the law or we don't. Making exceptions to people who imperil themselves by selectively not purchasing health insurance would only start the same degradation of the new Grand Bargain.
My simple point is that the existence of this system, mistakenly viewed by many as “universal coverage”, can be leveraged to remove burdensome unrelated costs from workers ' compensation, and allow us to focus those savings into benefits and coverage for actual work related issues.
I'll need to head to the showers to cogitate a bit more on this, but in my early assessment, that is a grand bargain worth making.