10-20-2020; Stumbling Along In IL Work Comp—A New Permanency Concept of “Loss of Job???”; Marsh Publishes an Amazing and Informative Update on COVID-19 and Workers’ Comp and more
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Synopsis: Stumbling Along In IL Work Comp—A New Permanency Concept of “Loss of Job???” Thoughts and commentary from Gene Keefe, J.D.
Editor’s comment: Probably around a decade ago, someone or three of the IL WC Petitioner’s bar was successful in getting IL Arbitrators to award “loss of trade” to firefighters and police officers who could not longer be in the fire or police department due to a work-related event. To my mind, this was happening as a “going-away-present” as such workers receive line of duty disability pensions that provide lifetime benefits. You may not know but when police/fire officers get line of duty disability benefits, the IL Pension code doesn’t allow them to also seek wage loss differential or total and perm benefits at Work Comp. In this setting, the “loss of trade” concept could get the appropriate worker $100K+ in tax-free “going away” money when they left their respective departments and moved into retirement or other work. In some States that are more government economical, the lifetime benefits of a line of duty disability pension would be all such a worker might receive.
This “loss of trade” concept also occurred for the construction trades to provide lots of money to electricians, plumbers, iron workers and others who had restrictions and didn’t choose to take wage loss differential benefits for any number of reasons.
Please note the “loss of trade” concept does make some sense in the context of the language of Section 8(d-2) of the IL WC Act that indicates that section of the IL WC Act contemplates increased benefits for an accidental injury that results in a lifetime loss of income. That said, please note no provision in the IL WC Act says or uses the words “loss of trade.” In short, that concept isn’t defined anywhere. When an IL WC hearing officer uses the term “loss of trade,” one can attach whatever legal meaning you like to what I respectfully feel is a “made-up” legal and claims term. In my view, we do that a lot in the IL WC system. Making up benefit concepts renders IL WC very unpredictable and wildly challenging to accurately set PPD reserves.
I am now advised most IL WC Arbitrators are looking at any claim where Claimant is changing jobs to merit dramatically increased permanency/impairment under Section 8(d-2). There is no requirement from the IL Arbitrator that an employer first exhaust all efforts to return the worker to the same position with accommodation, as the ADA requires. Basically, the Arbitrators are looking at “loss of job” claims and reacting. Again, as a WC veteran in this State, I don’t agree with any undefined concept that mandates an increase in reserves for the insurance carriers, TPA’s and self-insured employers in both the private and public sector. Please also note if a given Claimant has a leg or shoulder or wrist injury and they are compensated for “loss of job” under Section 8(d-2), IL employers and governments get no credit for paying such benefits if the employee injures the same body part repeatedly.
Case in point--we have an active claim in the office where the worker was working for around $15 an hour. She has purported restrictions making keeping her existing job a challenge—she may need to change to a lighter job.
Due to the giant and staged increases in our IL minimum wage, everyone who has any job in this nutty State will soon be making $15 an hour. The Illinois minimum wage goes up on 1/1 every year for the next five years. There is no question this worker, if she gets a job doing anything, sedentary/light or medium work, she will be making $15 an hour or more at some point in her life. In my respectful view, she isn’t going to suffer a loss of income.
Regardless, the Arbitrator in the claim is saying her needed job change is “loss of job” due to the work injury and OC is asking for 45% LOU BAW for a single injury to one body part. Ouch. We are countering at about half of the demand, which is still a lot of money. In my view, it isn’t the same when someone like Claimant has “lost her job” to change from a minimum wage job to a different minimum wage job. And, as our IL Supreme Court has just expanded IL WC to make us a “positional risk” state, if we are going to provide giant “loss of job” settlements and awards for anyone who might need to change jobs after an injury, the cost of IL Work Comp poker is going to go way up.
As I indicate above, please also note this “loss of job” concept runs directly contrary to ADA or the Americans with Disabilities Act. When Claimants can do some but possibly not all of the essential tasks of a job post-injury, all U.S. employers are supposed to reasonably accommodate them and bring them back. Some employers treat WC claimants as pariahs and won’t bring them back and let the insurance carrier or TPA deal with it. This can subject the employer to an ADA claim for not providing an “interactive meeting” as ADA and the EEOC requires—if you need help with this concept, please send a reply.
In short, it is my hope the defense WC bar in this State is going to start to push back on “loss of job” awards and settlements to try to keep the lid on things. Understanding Illinois is a one-party State and will be for years to come, this may be challenging to do.
I appreciate your thoughts and comments. Please post them on our award-winning blog.
Synopsis: Marsh Publishes an Amazing and Informative Update on COVID-19 and Workers’ Comp. We consider this a must-read for U.S. risk and claims managers.
Editor’s comment: The U.S. work comp matrix is not experiencing the worst-case scenarios stakeholders predicted at the start of COVID-19, though employers and injured workers aren’t out of the woods yet, according to a new study from a global insurance broker and risk adviser, Marsh.
The workers’ comp insurance market is still competitive, as COVID-19 OccDisease claims have been balanced by declines in other categories of occupational injuries, Marsh announced in its recent study, COVID-19’s Impact on Workers’ Compensation Market Is Minimal, but Challenges Persist. If you want to read the study—click on the link “recent study” above.
As the pandemic continues, employers are likely to face obstacles such as payroll management, changing worker classifications and new legislation that could make it easier for employees to claim they caught Covid-19 on the job, according to the study. “At the same time, new tools such as telemedicine and a more collaborative approach to claims management can present opportunities for employers to stay ahead of the curve,” the study’s summary states.
The climate for WC insurers has shifted after years of growth and favorable workers’ comp trends, and systems saw that progress continue into early 2020 before the pandemic began. Despite an unstable labor market and forecasts that workers’ comp premium volume could fall by as much as 10% to 20% by the end of 2020. Longer-term impacts on WC carriers’ profitability should end up being less dramatic, according to the study.
Industry watchers predicted that a tidal wave of COVID-19 claims would enter U.S. workers’ comp systems. But aside from the health care sector, no such influx has happened, according to the study. Data analysis reveals average severity of COVID-19 claims is lower than anticipated.
As KCB&A has advised our clients and friends, there are two sorts of COVID-19 claims:
Folks who get test positive and get mildly sick or not but recover in a week or so and
Folks who get very ill and possibly pass from the exposure/disease.
In our experience, Category 1 above is basically the “flu.” Workers who recover from the COVID-19 “flu” go back to work just like folks that recover from Influenza A. The medical and lost time costs are minimal. Such COVID-19 claims haven’t been very expensive, with one survey reporting about 96% of claims cost less than $3,500, according to the Marsh study.
Category 2 claims can involve long stints in the ICU and dramatic and six- and seven-figure exposures for WC/OD death benefits. The Marsh study indicates 4% of COVID-19 WC/OD claims have been very costly, creeping into the hundreds of thousands of dollars per claim to cover extensive procedures and hospital stays.
The Marsh study indicates “With the frequency of non-COVID-19 claims remaining lower than expected, the workers’ compensation line is expected to be less affected by the pandemic.”
Marsh says employers still need to be diligent when it comes to managing coverage and maintaining work site safety protocols. Many elements can dictate premium costs, including calculating payroll, classifying workers based on assumed risk while conducting normal job duties, and a company’s experience rating modification. A shift toward telecommuting and working from home has also created challenges for employers — as some employees must be temporarily reassigned classification codes — although the trend is likely to contribute to fewer workplace injuries, according to the study. To avoid missteps when it comes to reporting, Marsh says employers should keep separate records for payroll given to workers for time not worked in relation to the pandemic, instead of rolling into paid time off or another category. Employers should also keep payroll records for workers who continue to work but have assumed new roles in a way that the payroll could be split based on workers’ comp class codes, according to Marsh. Maintaining separate overtime records related to COVID-19 and recording the start and end dates of employee furloughs should also be helpful to employers, according to Marsh.
Workers’ comp claim trends have varied by industry, according to the study. While many industries have seen lower frequencies since the pandemic began in March, the health care sector is experiencing an uptick in year-over-year claims, and retail businesses have seen an increase in claims volume after seeing declines in the early days of the outbreak. The mix of claim types has changed since March, even while overall claims frequency has dropped, according to the study.
Before COVID-19, about 21% of all claims were for indemnity. But since the pandemic began, the share has risen to between 24% and 35%, according to a study by Marsh and consulting firm Oliver Wyman that looked at data through June 30. More uncertainty could be on the horizon, according to Marsh’s most recent study. Unemployment, furloughs and employees who are hesitant about filing WC/OD claims because of unclear job prospects could send new injury claims tumbling by as much as 20% by year’s end.
“As the economy continues to reopen, however, these trends may gradually be reversed,” the study states.
Despite the trend toward enacting new COVID-related workers’ comp laws, “many COVID-19 claims have ultimately not met compensability requirements,” according to the Marsh study. Industry estimates show that only 20% to 30% of all COVID-19 claims have been accepted, with most coming from the health care sector, according to the study. “In contrast, about one-third of all claims have been denied for various reasons, including a lack of diagnosis and/or symptoms, refusal by claimants to be tested for COVID-19, and the fact that some claimants have largely been working from home,” the study states.
We salute Marsh for this interesting analysis. We hope the pandemic is going to end, as it has to. We appreciate your thoughts and comments. Please post them on our award-winning blog.
Synopsis: Annual IL State Chamber WC Conference Goes Virtual—Shawn Biery & John Campbell to present.
Editor’s comment: The 14th Annual Workers' Compensation & Safety Conference set for November 4th is being held virtual this year. The 8:30 am to noon program features John Ruser, President & CEO of the Workers' Compensation Research Institute (WCRI) and Michael Brennan, Chairman of the Illinois Workers' Compensation Commission.
The program also will include the following breakout sessions:
Advances in the Diagnosis and Treatment of Carpal Tunnel Syndrome - Presented by Dr. Andrew Zelby and Dave Rusch, Vice President of Business Service Development, Ovation Hand Institute;
Medical Marijuana in the Workplace - Presented by AJ Sheehan, MVP Law
The Covid-19 Rebuttable Presumption - What is it and What Does it Mean for You? - Presented by Peter Stavropoulos, Brady Connolly and Masuda
2020 Workers Compensation Case Law Update - Presented by Shawn Biery and John Campbell, Keefe Campbell Biery & Associates
Snakes, Leaches, and Tobacco Enemas - The Case for Evidence-Based Medical Treatment Guidelines - Presented by Patrick Robinson, Vice President, Government Affairs, ODG, an MCG Health Company
OSHA Updates for 2020 and Beyond - Presented by Matthew Horn, SmithAmundsen LLC
For more information and to register: