I was at the 2015 National Council of Self-Insurers Conference in St. Petersburg, FL earlier this week, and one of the sessions I attended was entitled “Federal Intrusion into Workers’ Compensation”. It was presented by Robert Minor of Vorys, Sater, Seymour & Pease out of Ohio.
Minor spent some time reviewing past intrusions into the workers' compensation space by the Federal Government over the last 40 or 50 years. Those points were competently covered by the Safety National Conference Chronicles blog, which appeared on our site on Monday.
Far more relevant today, however, is the lingering feeling that the Feds, through OSHA, are trying to impose greater control or involvement over the myriad of state workers' comp systems in the nation. It might be paranoia, but the suspiciously coincidental release of the highly critical ProPublica/NPR report and the equally scathing OSHA report on workers' compensation raised many eyebrows in the industry. One only need review the titles of these two reports to get the gist of their content. The ProPublica report, entitled “The Demolition of Workers' Comp”, was the first in a series of articles looking at many “worst case” scenarios within the comp system. The OSHA report title, “Adding Inequality to Injury: The Costs Of Failing To Protect Workers On The Job”, pretty much says it all regarding the intent and outcome of the report. This balanced work, produced with our tax dollars, and using wholly scientific phrases such as “Statistics are People with the Tears Washed Off”, eviscerated employers and workers' comp, alleging that we essentially renege on up to 80% of injury costs across the nation.
The statistics and assumptions are up for debate, but few questioned that there was a coordinated effort afoot to push for greater Federal involvement within the workers' compensation system. One of Robert Minors best lines, that “One size fits all rarely does”, best outlines the fallacy of a federally driven system.
Yet, published on our site Monday, the same day as the session on Federal Intrusion in comp and the related discussions about potential Fed interference, was an article about the Obama Administrations attempt to cut workers' compensation benefits for Federal workers. On the surface, this action is strangely parallel to the reduction of benefits at the state level; actions scathingly condemned by ProPublica/NPR and OSHA.
As you delve deeper you will realize the comparison may not be all that equal, but the timing of the action still belies conventional wisdom about the Federal Governments overall intent with regards to the workers' compensation industry.
First, of course, is the fact that Federal benefits are considered by many to be too high in the first place. As the Employment Law Academy article published Monday explained:
Currently, the compensation level for injured workers with no dependents is two-thirds of their pre-injury wages. For employees with dependents, about 64 percent of the recipients, the compensation level is 75 percent. Among several proposals, including some Democrats like, the Labor Department is calling for one rate, 70 percent for all, which would mean reduced benefits for the majority of future recipients.
Benefits paid at 75% tax free essentially means that some Federal workers injured on the job generate greater take home pay when they are off the job than when they are working. As everyone knows (except the idget brains opposing the move), that makes no sense.
Proving that politics makes strange bedfellows, the administration is allied with Republicans in proposing these benefit reductions, and are being vehemently opposed by many Democrats. Even more starkly shocking is that I find myself, possibly for the first time ever, agreeing with the Obama Administration.
Stop the world. I want to get off. Clearly I can't have all the information. Paduda must be (maniacally) laughing his ass off.
Still, the timing is not what I would have expected, if in fact there was a coordinated Administration attempt to inject itself into the realm of workers' comp. To cut Federal benefits at the same time you are accusing an industry of unfairly cutting their benefits would make no sense whatsoever. It would be a silly and incompetent thing to do.
Wait a minute. I see it now.