6-11-12; Understanding Jurisdiction and Multi-State/Federal Coverage in U.S. Workers’ Compensation Claims

When we are discussing or teaching jurisdiction in workers’ compensation class, we are basically discussing “coverage”—which state or federal or other workers’ compensation system applies to or covers WC benefits due for a given work injury. We are regularly asked the following questions:

·         Can an injured worker get WC benefits from two or more states or the federal government and a state?

·         Assuming an injured worker can get benefits under different WC systems, which one should we reserve for and pay?

·         Before a work injury occurs, can we have our union or non-union employees agree to only get benefits from a single government system?

The answers aren’t always clear but we assure our readers it is important to understand WC jurisdiction issues. If you don’t know or understand what to do in a complex claim, please feel free to send an email now or at any time to get detailed answers and research to such questions from the 15 lawyers defending claims in IL, WI, MI and IN at Keefe, Campbell & Associates.

We feel a main point of confusion in understanding jurisdiction goes to the basic concept of how legislation is supposed to work. If the legislation from three different states in the United States allows a worker to get benefits for a work-related injury out of their state’s WC system, the employee may be able to do so. The injured workers are entitled to precisely what each system provides and their employers have a statutory duty to pay what is owed.

Federal WC Systems are Usually Exclusive—Sort of

Most federal workers’ comp systems are exclusive—for example, a postal worker for the U.S.P.S. will only receive federal benefits if they suffer an injury while in federal employ. Such a worker might be able to get state WC benefits if they were to “moonlight” and get injured while working in a part-time or full-time job that didn’t involve postal work. But for injuries while they are doing their postal job, they can’t get concurrent state benefits.

This same rule applies to most of the other federal programs with a few exceptions. Members of the U.S. armed forces only get military benefits for injuries suffered in the service of our country. Nuclear or “energy” workers are also limited to their specific benefit system. Black Lung benefits for coal miners may provide concurrent coverage.

Longshore workers are men and women who either load or fix vessels that operate on navigable waters. In Illinois, Longshore workers may get both federal and state benefits but only if they are injured working on land—in contrast, Longshore workers in Indiana and most states are limited to federal LHWCA benefits only whether they are injured on land or over navigable waters.

In summary, federal WC benefits typically look to two factors—status and situs. We apologize a little for using the Latin term “situs” but you have to bear with us. By “status, we mean the worker is performing federally defined service. Please note a Longshore worker isn’t a “federal employee,” they are simply doing work for a private company involved in interstate commerce for which our U.S. Congress provided federal benefits.

By situs, we mean it is possible for the federally defined Longshore job to also provide concurrent state benefits if the situs of the injury is not over navigable waters but on land.

Reserving WC Claims with Multi-State or State-Federal Coverage

If you have a worker with concurrent coverage, we feel the worker will get the highest benefits of the two systems but not “double” benefits—if you pay a WC medical bill under either state or federal coverage, you should only have to pay it once. If TTD is paid under state and not federal coverage, you only have to pay your worker once and get credit for what you pay under the other system.

We have told our students and readers of this limitation and we usually cite the Full Faith and Credit Clause of the U.S. Constitution as the source of law for it. As a caveat, we are only aware of a very few decisions that specifically outline it. We are also aware very few claimant lawyers would want to fight this esoteric concept. We are also certain most hearing officers are going to quietly enforce the concept, as a common sense approach.

We feel “best practices” in reserving such claims is to initially reserve it in the state where benefits are accepted and first paid. If the employee seeks benefits in a second or third WC system, you will then have to update your reserves to include the highest level of each of the three main WC benefits—medical, lost time and permanency. If you don’t update reserves, you may face a challenge in demonstrating you have accurate reserves if and when claims go to hearing and are finally decided.

So Which State is It? From Which State Do I Owe and Pay WC Benefits When a Worker Gets Hurt?

The three main WC jurisdiction concepts are relatively easy to understand. Every WC adjuster and corporate risk manager should memorize them. They are

1.    Place of the Injury

2.    Place of Hire for Out-of-State Injuries

3.    Place Where the Worker Hired Out-of-State Commonly Works for Out-of-State Injuries

First and most important, just about every state, province, country that has a workers’ compensation system provides for coverage/jurisdiction if the injury occurs within the statutorily defined boundaries of that government body.

We recently had a client with a truck driver who lived outside IL, worked almost 99.9% of the time outside IL but suffered an undisputed injury in a very short drive across the bottom of our state. The client reported the claim in the worker’s home state and started paying benefits based on that state’s WC system. The worker hired a lawyer in IL and the IL claimant attorney filed the requisite Application to get benefits in this state for the worker. Our client asked us to file a motion to dismiss the claim. In response, we had to advise the valued client we didn’t think we had any chance to do so because of the situs or place of the injury. Actually, the first full sentence of the IL WC Act confirms the legislation was created to provide benefits for injuries occurring within this state.

Either way, the important point for an adjuster or our readers to understand is dual or treble WC coverage is possible—it is possible for an injured worker to be entitled to benefits in Indiana and Wisconsin and Illinois at the same time for the same injury. Workers’ comp benefits aren’t mutually exclusive—in fact, they can be mutually inclusive.

Following what we said in the earlier section above, we do feel the worker would not get “double benefits” and the employer should receive credit for any medical, lost time or impairment benefits paid in the other state or states at any current or future time. That said, as Illinois is one of the more generous of U.S. WC systems, we usually have to advise the client to reserve and pay most WC benefits at the higher IL level.

Please also note there is a built-in conflict in handling medical care and possibly TTD that does cause some confusion in multi-state jurisdiction claims. For a simple example, please note the Indiana and Iowa WC systems allow the employer to pick the doctor. In such a setting, the employer has to pay not only the cost of the medical care but mileage expense to get to the care.

In contrast, the Illinois WC system allows the injured worker to pick at least one doctor and all the doctors to which the first doctor refers them. Medical bills may be accepted by the employer or its insurance carrier/TPA but medical care is also subject to utilization review and IME’s. We do not advise our clients to pay mileage expense for an injured worker to get to or from medical care under the Illinois WC system because the IL WC Act and Rules do not provide for it. All of this may be further confused when PPP’s are implemented in this state.

The main point we are trying to make is no one truly knows how to resolve interstate rights to medical care when a worker is injured but can make a WC claim in more than one state. Our vote for clients who have to deal with such challenges is to try to insure you are doing the best you can for the injured worker and seek out legal advice on how to best resolve conflicts. Where the claims are filed, most hearing officers across our country will provide informal but clear direction to the claimant, attorneys on both sides and the adjusters on how to best handle any medical issue—get the dispute to the hearing officer who will decide it for their focus and guidance earlier rather than later.

WC Jurisdiction based on Place of Hire for Out-of-State Injuries

It is possible for a worker to be injured in Minnesota but hired in IL and assigned to work in Minnesota. This fact situation occurred in an IL Supreme Court ruling named Twice Over Clean v. IWCC. In that claim, Petitioner was hired in IL and traveled to Minn to perform removal of hazmat materials. While taking bags out of a building he suffered a heart attack. The dispute in the claim had nothing to do with jurisdiction; claimant clearly had a right to benefits in both IL and Minn; he prosecuted and eventually won the claim in IL.

In Illinois, the main issue in determining place of hire is the “last act” necessary to create the employment relationship. This was started by Illinois by our aggressive labor unions where a worker was called in a union hall from any of our sister states and asked to take a job in the other state. When the worker said “yes” that statement of acceptance was felt to create the employment contract and provide IL jurisdiction for the worker even though they didn’t do any work of any kind in our state. Lots of employers have figured out this rule and will post jobs available for hire in their state but they make the employee go through a full hiring process before the “last act” occurs in the other state.

Place Where the Worker Hired Out-of-State Usually Works as the Source of Jurisdiction for Out-of-State Injuries

Perhaps the most confusing of the various jurisdiction concepts is this last one of “principal localization.” The risk manager or adjuster has to answer this question—what do I do if the worker is injured in Texas, hired in Minnesota but did most of their work in Illinois? Well, it is possible for the worker to have a bona fide WC claim in all three states!

In this setting, there is Illinois case law all over the block on what “most of their work” or “principally localized” might mean. Some cases appear to indicate the worker has to spend most of their work hours within IL with an occasional road trip elsewhere. Some cases focus on “central reporting point” for workers who are on the road regularly without any true home base but report into a specific place to get assignments.

In our view, this concept provides a knowledgeable employer the ability to anticipate legal coverage and decide the state best for your organization. Again, if you need thoughts and advice, send a reply.

Before an Injury, Can We have Our Union or Non-Union Employees Agree to Only Get WC Benefits from a Single Government System?

This one is an interesting concept—we are certain there is a major Illinois employer who agreed in their national collective bargaining agreement that all WC claims anywhere in the U.S. would be treated as Illinois WC claims or injuries. We assure our readers this was a very expensive management-labor decision for management. We are also pretty confident the employer didn’t “cost-out” the decision when it was made. We are sure the employees got the highest level of WC benefits they might be due and didn’t the workers didn’t challenge the concept before the NLRB or in federal court. We aren’t sure what might happen if the employer got the union to agree to take WC benefits based upon the least expensive state WC system in the union but we are confident there would be numerous challenges to such a plan. We also feel the same thing might happen if a collective bargaining agreement allowed an employer to “opt-out” of state WC coverage in a state that didn’t allow employers to “opt-out.” Whatever happens, if employees aren’t happy, assume lots of very expensive litigation might follow.

In contrast to the collective bargaining agreement above, we had a number of trucking clients across the U.S. who were asking all their non-union job candidates to sign a written agreement indicating if anyone were to become injured at a later time, they could only bring a WC claim in a single defined state. There was no true legal “consideration” for that agreement other than the fact of hiring and continued employment.

We were not aware of this contractual concept being litigated to a conclusion but we are aware most states have a provision in their legislation indicating the rights given under a given state’s workers’ compensation act cannot be abrogated or limited other than with approval of the respective WC Board or Commission.  We are confident pre-injury agreements to limit jurisdiction to a single state or government body would be in direct conflict with that legislative provision and would almost certainly be ignored and/or stricken.

We were also asked if an employer could implement the purported agreement to accept jurisdiction in a single state for all injuries occurring across the country. The employers were asking if this would “work” if a newbie worker would accept benefits in the agreed state and not institute litigation in other states to get multi-state benefits. We do feel that might “work” for your non-sophisticated employees with an important caveat—we feel such a plan could arguably be found to mislead or defraud workers from seeking a given state’s WC benefits to which they might otherwise be due. If the right class action attorney picked up several such claims, you could be looking at a national class action or even a RICO action to recover triple benefits and attorney’s fees. In our view, that risk isn’t worth the moderate savings you might achieve.

To summarize, we hope we have covered your major questions and concerns about WC jurisdiction and multi-state coverage. If you have further inquiries or concerns about specific jurisdiction in any state or for federal issues, send a reply and we will get you the needed research and clear answers to assist in handling your claims.

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