Synopsis: Obamacare is Causing Major Medical Confusion—It Is Certain to Impact WC Claims.
Editor’s comment: We were mildly amazed to hear Abbott Laboratories CEO Miles White quoted last Tuesday to confirm there are "clear incentives for companies to drop their health care plans and move people onto the [federal health insurance] exchanges." Basically, what U.S. executives are starting to understand is they may cause millions of unexpecting American workers to be blindsided with the news they'll be forced into this dysfunctional government online marketplace. If and when this might happen, many U.S. workers and their families will face higher healthcare premiums or dramatically higher deductibles. All such workers will be required to share private medical and financial information on a website with a questionable security firewall, opening their personal and health information to frauds, hackers and scam artists.
Abbott Labs CEO White also confirmed his view most employees of his companies will be very unhappy to be cut adrift from corporate healthcare coverage they have enjoyed for decades to then be forced to figure out these national exchanges. When this occurs, the outcry against our current President and Democratic leaders may hit a fevered pitch. Most people employed by large companies are used to having the coverages laid out by the veteran and experienced HR managers who understand the nuances of healthcare coverage(s). If/when that ends, we are all going to have to figure out the best plan from these creaky and confusing federal healthcare exchanges with little assistance. We are confident lots of folks are going to make a mess of things and not understand what they have signed up for until they are injured or sick.
President Obama's "fix" last week would allow insurers to renew old individual healthcare policies for one year, if state insurance regulators are on board. Last Friday, Illinois insurance officials announced they would allow the temporary remedy to leave existing programs in place for the time being. Now we'll see how Illinois healthcare insurers may respond. Whatever happens, this move is merely stalling for a real answer and to quiet lots of screaming voices, for now. Many observers are confident a complete renovation of the sweeping federal law is still urgently needed.
Many observers also note workers who gain coverage through smaller employers, like law firms, TPA’s, nurse case management companies and physician’s offices are at risk of getting cancellation notices next year. Here's why--businesses with 50 employees or less buy healthcare coverage in the small-group market. These plans can temporarily keep offering coverage that doesn’t meet expensive Obamacare requirements. When that ends next year, though, many employers may cancel policies because Obamacare coverage may shockingly boost group healthcare coverage costs for employers and the opt-out penalties aren’t a sufficient disincentive.
As medical providers, hospitals and large clinics are bracing for significant financial turbulence, they note out-of-pocket deductibles for treatment, surgeries and diagnostics are dramatically rising. Workers will find themselves liable for more of their medical bills before healthcare insurance even starts coverage. In past experience, U.S. hospitals could count on healthcare insurers to pay 80-90 percent of most medical costs—the 10-20% balance would then become a reasonable cost for patients and their families. For patients who will now be dealing with high-deductible government exchange plans that may cost workers as much as $6,000 per year, the healthcare insurer's share of many medical procedures may drop as low as 60 percent on average.
Workers who have healthcare coverage through large American companies are benefiting from a one-year reprieve from the Obamacare mandate to provide coverage or pay penalties. The reprieve ends by 2015 and employers like CEO White of Abbott are already carefully calculating what to do. Some employers may cut jobs or workers' hours to avoid the requirement of offering costly insurance coverage. Other companies may dump everyone into the federal exchanges and pay penalties that are almost certain to be less than what coverage would cost.
What Does All This Mean to Workers’ Compensation?
Always remember WC medical coverage is close to being every human’s impossible dream—injured workers want 100% on-demand coverage of unlimited medical care for work injuries and illnesses. There are no deductibles, contributions or co-pays in WC medical care. Workers who suffer injuries or illnesses on the job are also provided lots of information and choices on how to get the best possible care; you don’t have to figure it out for yourself. In major and medium WC claims, employers/insurance carriers may assign telephonic or on-site nurses to provide hard-fought expertise and assist with all aspects of medical care and bill processing.
As a limiting factor to the basically unlimited, on-demand WC treatment model, the IL WC PPP network is a program designed to provide some cost-sharing and limitations on medical care. We have no idea what the downside to this approach might be and we feel ACA is going to put lots more pressure on WC adjusters and claims. If you have interest in joining an IL WC PPP network, please send a reply.
We are also predicting lots of “repetitive working” claims for employers in IL and across the other states where we provide defense—Wisconsin, Michigan and Indiana. The reason we feel such claims will arise is to force employers to pay medical benefits under WC that they won’t owe under ACA. The high deductibles of the Affordable Care Act are going to push workers to try to seek the unlimited, on-demand WC coverage of questionable illnesses and injuries. If you need help defending “repetitive working” claims, send a reply.
In further contrast, many WC observers felt there might be less utilization of workers’ compensation medical treatment because ACA requires group coverage for pre-existing conditions. However, the expansion of such coverage under ACA is clearly offset by dramatically higher deductibles that may push more pre-existing conditions back into the workers’ comp arena so workers aren’t faced with paying those initial costs. We also feel workers may choose to obtain WC medical handling of their care because it comes with a great deal more certainty in providers, coverage and cost.
The coming changes in Medicare reimbursement levels are expected to result in cost impacts for those states that use Medicare as a basis for reimbursements in their respective state workers compensation fee schedules for medical treatment/billing. For our Illinois readers, this won’t have any direct impact on our state or its WC medical costs.
Another result of ACA is in the Black Lung Benefit Entitlement provisions which will make it easier to file claims for and to obtain benefits; increases the benefits payable for such claims; and will increase future insurance premium costs for affected industries. As higher costs hit, premiums are certain to go up.
Further, promotion of wellness initiatives under ACA may reduce the incidence and duration of workers’ compensation claims. We hope our IWCC and reviewing courts don’t make every bump and bruise in a wellness program work-related but we will have to wait and see what our “activist” reviewing courts may do with this concept. If you need a document confirming participation in such programs is voluntary and hopefully non-work-related consistent with Section 11 of the IL WC Act, send a reply.
We are also sure provisions making generic drugs more available sooner in the process may result in lowered pharmaceutical expenses in workers’ compensation claims. Please note this is the area of medicine that is rising fastest in overall cost.
We are also certain new taxes are expected to be levied on drug manufacturers, medical device manufacturers, and health insurance companies—when the new taxes land, there can be an expected trickle-down to employers and consumers.
We appreciate your thoughts and comments. Please post them on our award-winning blog.
Synopsis: Wow, Are We Confused—IL WC Fall-Down Reversed to Provide Benefits to Worker With NO Mention of “Traveling Employee” Concept.
Editor’s comment: In Suter v. Illinois Workers' Compensation Commission, 2013 IL App. 130049WC, issued November 14, 2013, our Appellate Court, Workers’ Compensation Division was faced with a denial on Arbitration, denial before the IWCC panel and denial at the Circuit Court level. Despite the earlier denials, the Appellate Court unanimously reversed, finding the fall-down compensable “as a matter of law.”
Claimant Suter was a staffing worker from Manpower. She was loaned to the State of IL by that temporary services company. While exiting her car to go to into her workplace, she slipped and fell on ice on a parking lot. Both the building and the parking lot were being rented by the State of Illinois but were not owned or managed by the State. There is no question the building manager provided a specific parking space for this worker at her request.
Please note assigned parking spots or even assigned parking areas aren’t a good idea, if you want to avoid IL WC coverage of parking lot fall-downs. We advise our clients not to assign spots and let folks park wherever they want, rather than face expanded coverage for fall-downs. Our advice to IL Attorney General Lisa Madigan moving forward—tell all the building managers for properties rented by State government to immediately stop assigning parking spaces and avoid this exposure. We provide parallel advice to any staffing company risk manager that reads this article—tell your accounts not to assign parking spaces on their parking lots to your staffing workers. If you let them park wherever they want, you may avoid WC liability.
In this claim, the IL WC Appellate Court ruled claimant's ability to use the parking lot was derived from her status a temporary State of IL employee. They also noted use of the parking space was customary and permitted. Accordingly, injuries caused by the fall-down arose out of claimant's employment as a matter of law.
What is mildly to wildly unusual is this is a Manpower temporary worker who clearly would not have been working on Manpower’s premises. That makes her a “traveler” in relation to her main employer. Please also note the State of IL was dismissed as a party to the appeal, as WC claims against the State cannot be appealed past the IWCC. You may also note the facts of the accidental injury in this claim closely parallel the fall-down suffered by Claimant Stanislawa Mlynarczyk in her fall-down-going-to-work-but-not-on-the-premises-of-her-employer claim that was ruled compensable in Mlynarczyk v. IWCC by the same five members of the Appellate Court panel in the unanimous ruling. Feel free to compare:
As Claimant Suter was a “traveler” in relation to Manpower only, she would be covered without any of the arguably challenging analysis involved in this “We-are-Illinois-and-any-parking-lot-fall-down-involving-an-assigned-space-is-covered-as-a-matter-of-law” ruling. We don’t know why they wouldn’t simply deem Ms. Suter to be a “traveler” and thereby cover her under that much more sweeping concept and not worry about any issues, like “arising out of and in the course of employment.” We are also starting to become concerned the august members of this Court want to end all WC litigation with their new “matter of law” WC coverage approach to lots of formerly fact-based legal concepts.
We can only guess to think the members of this Court know what the Supreme Court may be doing with the hotly-expected ruling in Venture-Newberg-Perini Webster & Stone v. IWCC but we find it difficult to contemplate they don’t even mention their four prior “traveling employee” rulings that would apply to these facts and dramatically streamline their ruling in this case.
On a final note, please remember we are strong, strident and respectful opponents of the “traveling employee” expansion of IL WC benefits. In our view, almost all staffing workers are covered for all reasonable/foreseeable injuries and illnesses all day during travel to and from work and on all breaks because 99% of them don’t work “on the premises of their employer.” It is our strongest hope this unsustainable workers’ compensation coverage concept is abandoned by our courts or forever eliminated by our IL General Assembly. In rulings such as this where the members of what is typically our highest WC reviewing court don’t even mention this sweeping and game-changing coverage concept, it leads to confusion and chaos. We feel it becomes impossible for Arbitrators, Commissioners, lower courts, adjusters, risk managers and attorneys on both sides to accurately predict what to do in handling, trying, settling and otherwise resolving such claims.
We appreciate your thoughts and comments. Please post them on our award-winning blog.
Synopsis: Strict Compliance Required to Compel Child Support Withholding and Initiate the Daily $100 Penalty. Analysis by James F. Egan, J.D.
Editor’s comment: In Schultz v Performance Lighting, Inc., the Illinois Supreme Court ruled individuals seeking to compel IL employers to withhold child support under the Income Withholding for Support Act, 750 ILCS 28/35 (West 2010), must strictly comply with the notice requirements of the statute. Failure to do so could leave Plaintiff, in this case the mother, left without child support.
Under Section 35 of the IWSA, an employer who fails to withhold to meet its employee’s court-ordered child support obligations may face a $100/day penalty if the employer knowingly fails to withhold income after receiving notice under the Act. This penalty applies to payment of workers’ compensation benefits, including both TTD and settlements.
The payments must be made to the IL State Disbursement Unit if the party seeking support meets the unequivocal statutory requirements for supplying notice to an employer. While the instant matter did not involve a workers’ compensation case, at KCB&A we routinely advise our clients to act with great caution and consult our defense team when settling any GL, WC or EPLI matter with an outstanding child support lien or withholding child paying benefits from TTD payments in an ongoing matter. If you aren’t sure about whether to deduct child support in an ongoing claim, send a reply.
In Schultz, the wife alleged her ex-husband’s employer knowingly failed to make child support payments to the State Disbursement Unit, so Plaintiff filed a lawsuit under the Act. She contended Defendant’s breach triggered the daily penalty. Unfortunately Plaintiff had failed to supply the social security number of her ex-husband and other pertinent information in court documents served on the employer.
The IL Supreme Court determined the notice provision was invalid based on the omission of the required social security number from the notice and rejected Plaintiff’s position she had substantially complied with the notice provisions. Emphasizing the rules of construction, the court held, by singling out the lack of a signature as an omission that would not affect the validity of notice, the General Assembly had expressed its intent that the other 11 requirements of the statute absolutely were required. The Supreme Court also observed the statute provides a safe harbor for an employer complying with the withholding obligation only to the extent the notice contains the statutorily required information. The employer could face a Catch-22 if the statute were interpreted as Plaintiff urged; an employer faces civil liability for withholding wages unless the request to do so meets the statutory requirements.
The IL Supreme Court did note a troubling lack of communication between the party who sought but, for two years, did not receive payment, and the employer who had notice, albeit defective notice. Recent amendments to the statute requiring follow-up notice and response address this concern to some extent, requiring the recipient of support to timely contact the employer as to why support is not being withheld. This then triggers a required response from the payor to notify the obligee.
This article was researched and written by James F. Egan, J.D. Please feel free to contact Jim about it at email@example.com.
Coming events from KCB&A
Happy Thanksgiving to All Our Readers and Clients! Be Careful Out There!!
Synopsis: The KCB&A Monday law updates are archived on the KC&A blog!
Editor’s comment: If you are looking for any article previously written in this update, or just want to browse through a host of insightful articles dealing with our Illinois Comp system, stop on over to http://keefe-law.com/kcablog.html and take a look. The blog currently includes archived articles dating back to August 2008.
Synopsis: Top Twelve Free (or almost free) and Truly Handy Claims/Risk Management Stuff from Keefe, Campbell, Biery & Associates to our readers.
Editor’s comment: We do lots of things for this industry that you may not know about. Let us know if you have interest in any of these services.
- First and most important, send your claims inquiries and toughest questions to firstname.lastname@example.org for 24/7/365 answers to your toughest Illinois claims questions. Give us 24 hours and we will get back to you with reasoned thoughts and suggestions, recommendations on pro se settlements and best practices in handling difficult and complex claims concerns.
- Next, take a look at actual winning results from the top defense firm in Illinois, Wisconsin, Michigan or Indiana by going to this link:
- Shawn R. Biery does a continuously updated and very handy Illinois Workers’ Compensation Rate Sheet. It is available to anyone upon request. If you want it, send a reply or email Shawn directly at email@example.com.
- We have a one-page document free to the industry called Keefe, Campbell, Biery & Associates Rules of Thumb that provides a quick reference for adjusters and risk managers with Illinois claims. Again, if you have interest, send a reply.
- We have a free book on the 2005 Amendments to the Illinois Workers’ Compensation Act. It is also available in a condensed form. If you would like a copy, send a reply.
- We also have a free book on all aspects of Illinois Workers’ Compensation Law and Practice. If you are unfamiliar with the Act and Rules and want a resource book, please send a reply.
- We provide answers to questions adjusters have about appropriate reserves on your claims, usually within 24 hours. We employ WestLaw© research in rendering our evaluation for your complete file. If you have interest in a legal opinion to support your reserve calculations, email firstname.lastname@example.org.
- We obtain rapid approval of pro se settlements in Chicago for the low price of $250.00 and outside the Chicagoland area at $350.00. If you have interest in such services, again, email email@example.com. We can turn such approvals around in days with cooperation from claimant.
- We are happy to provide a free legal audit of up to ten of your worst litigated claims. Our goal is to advise how to best bring such claims to rapid closure within authority. We have had solid outcomes from such reviews. All of our handling is attorney-client privileged. If you have interest in a legal audit, send a reply to firstname.lastname@example.org.
- We have a strong list of medical, diagnostic, pharmacological, vocational, utilization review, nurse case managers, surveillance, accident reconstruction, ergonomics, safety and other top-notch experts for your consideration to use in Illinois workers’ compensation, general liability and employment law defense litigation. Such recommendations are free. We update such lists continuously. We can also provide research backing up the credentials of such experts. If you have a need for an expert, send a reply.
- We are the only defense firm that has several workers’ compensation law professors on staff—we have read and analyzed every single IL WC appellate ruling for over three decades. For any of our readers, if you have a complex (or even a simple) question about any aspect of Illinois workers’ compensation law and practice, please send a reply and we will advise within 24 hours. If you have interest in attending or auditing the best workers’ compensation course in Illinois at one of our top law schools, let us know and we will provide details.
- Need a calculator for your desk? Send a reply and we are happy to send a free one that works!
Last week’s questions with answers in red:
John Fitzgerald Kennedy passed away on November 22, 1963, fifty years ago this week. Here is some JFK trivia.
v How many significant similarities are there between the passing of JFK and Abraham Lincoln? At least 16, many of them mildly eerie.
v While John Kennedy was considered a very popular President, what IL politician was instrumental in helping him to win or what some observers felt was “steal” the 1960 Presidential election? Chicago Mayor Richard J. Daley who held the ballots until some veterans felt the ballot boxes were properly “stuffed.”
v As our country seemingly refused to believe one misguided gunman could shoot our President in the fashion that it occurred, is there any compelling evidence to the contrary? Not that we ever heard—it is sort of like not believing the U.S. had a man on the moon; if you don’t believe it, that doesn’t mean it didn’t happen.
v What building in Chicago helped make the Kennedy family zillions and helped to elevate several of them, including JFK to high political office? The Merchandise Mart that was developed by his father.
v What was the 120-year curse for U.S. Presidents that ended with the passing of John Kennedy and was broken by Ronald Reagan?? Six Presidents, elected every 20 years, died in office. Ronald Reagan was shot but survived to break the weird curse.
This Week’s KCB&A Trivia questions. The first one to get them right, gets a $25 Starbucks Gift Certif:
Ø What are we giving thanks for on “Thanksgiving?”
Ø Is there actually a rock named Plymouth Rock and why do we still remember that place?
Ø Why were the folks who landed in the U.S. in 1620 called “Pilgrims?”
Ø What were the settlers of 1620 initially called?
Ø What part of the Thanksgiving turkey is saved and snapped as a superstitious good luck custom?