During a panel discussion last week at the SAWCA All Committee Conference in Colorado Springs, Georgia State Workers’ Compensation Board Chairman Frank McKay told the room that his agency had just received a request from the Social Security Administration. They are asking for the states claim data so that they may cross index it with their Social Security Disability records.

It is a request that should get the attention of the workers’ compensation industry.

Prior to the last presidential election in 2016, there was significant concern in the workers’ comp industry regarding potential interference from the federal government. The industry had been under assault by media interests and seemed to become the focus of interest for Secretary of Labor Tom Perez. A scathing report issued by his DOL made numerous assertions regarding the shortcomings of the industry. Many believed that some sort of federal action, ranging from minimum standards to outright federalization of the system, was imminent.

And then Donald won, Hillary lost, and the threat seemingly dissipated overnight. At least, that is how many people reacted at the time. While I never believed that the workers’ comp industry was at risk for a federal takeover, I have never been convinced that we are “out of the woods.” People have become too complacent, and do not (IMHO) appreciate the continued threats we face.

I have maintained for years that the true possibility for federal interference in workers’ comp lies in the dichotomous relationship between our benefits provision system and the Social Security Disability Income program. The workers’ compensation system has been alleged to have been responsible for as much as twenty percent of the SSDI recipient pool. As many as 17 states have direct offsets within their statutory language that clearly transfer eventual responsibilities to SSDI. My concern has been that the feds, moving to protect SSDI in the same manner that they have tried to protect Medicare, will eventually force another complex and inefficient overlay on our industry to protect the taxpayer’s interests.

The request for data sounds like an early volley in that effort. If all the states eventually receive that, we can be sure that this is exactly what the federal government may be looking to do.

As a taxpayer myself I don’t mind the concept. I am just concerned that whatever action they take will resemble the MSA process established by CMS; bloated, confusing, expensive and largely ineffective. 

Frankly, it would be easier in the long run to fix the issues that appear to be funneling people into the federal disability system. Doing so would allow us to better assess the risks and rate the premiums necessary to manage the expense. Waiting for the feds to pile on with some unknown “fix” just leaves us at risk of another MSA-like debacle.

Legislators should look at language within their statutes in states that currently reduce indemnity payments where SSDI is in the picture. Unrealistic benefit caps should also be under scrutiny in the states where they exist. Mississippi, for example, has a 450-week cap on PTD benefits. While I have never been one to encourage needless disability dependence (and would argue that disability itself needs to be redefined), this is unreasonable in some instances. Imagine that you are a twenty-year-old roofer who fell three stories and wound up with a severe TBI. You require twenty-four-hour care for the rest of your life, but your indemnity payments will stop in under 9 years. 

Where will you end up, and who will ultimately absorb the cost for your daily living expenses? 

Right now, the answer is the US taxpayer, through the mechanism known as SSDI. 

Something will eventually be done to address this shortfall. We can either as an industry face the issues and fix them or wait for a solution to be foisted upon us. If the thought of another federal “fix” gives you a winter chill, then the answer should be obvious.

We need to eliminate the problem before the “solution” makes it worse.

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