Legal Trends

Update on Workers’ Comp Rulings, Regulations and Reform

A recent webinar offered an outline of legal and regulatory changes that employers should be aware of.
By: | July 20, 2017 • 5 min read

Workers’ compensation rulings are starting to see trends, which is why Marsh & McLennan Companies urges employers to stay on top of the evolving legal decisions being made. Court rulings and changes to workers’ comp law not only affect employers but can also affect the workers’ compensation program itself.

During the July 19 webinar “Workers’ Compensation’s Evolving Legal and Regulatory Landscape,” Marsh’s Workers’ Compensation Center of Excellence hosted a panel of risk experts keen on discussing the recent legal and regulatory changes seen on the workers’ comp front, from unconstitutional practices to OSHA regulations.

Legal Rulings and Workers’ Comp Reform

Dennis Tierney, director of workers’ compensation claims at Marsh, and Scott Lefkowitz, a partner at Oliver Wyman Actuarial Consulting, spoke on the effects recent court cases may have on workers’ comp nationally.

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Florida, Alabama, Kentucky and Pennsylvania have all seen rulings that could spark a trend for other states, noted Tierney. He said that in these recent cases, each state’s justice system ruled pieces of its existing workers’ comp law unconstitutional.

In Florida, the Supreme Court found it unconstitutional to cut off disability benefits after 104 weeks to a worker who is totally disabled yet has not reached maximum medical improvement. Alabama ruled that the $220 a week cap in compensation was unconstitutional. Kentucky now requires all permanent partial disability income benefits be paid a full 425 or 520 weeks regardless of an employee’s age at time of injury, and Pennsylvania removed employer access to impairment ratings evaluations.

So, what does this mean for employers?

In Florida, companies have already seen a 14.5 percent rate increase in workers’ comp. Tierney said that while Alabama’s impact is still pending, Kentucky’s decision could be a game changer. Now, employees near social security retirement age are entitled to the full 425 or 520 weeks of permanent partial disability.

So far, the state has seen a 5 percent increase in claims costs. In Pennsylvania, the panel suggested employers seek an alternative practice to modify claimants’ statuses.

Tierney said these rulings show that judges are looking at workers’ comp programs and are listening to what other states say. Employers could see workers’ comp costs increase, he added, so it’s a good idea to work with claims adjusters, brokers, TPAs, attorneys and everyone involved to keep workers’ comp plans up-to-date and in compliance with state regulations.

As for reform bills, Tierney and Lefkowitz point to a few decisions of interest to employers:

  • New York State Senate Bill S4520: Any difference in compensation rate paid during a period of temporary disability and the rate of payment after classification of permanent disability will be paid by the employer in weekly installments.
  • Virginia Workers’ Compensation Commission: To create a more even payment plan, Virginia split its state into six unique medical communities in order to set up a medical fee schedule. The schedule outlines maximum fees for health care services for injured workers.
  • Iowa House File 518: Six major changes were made to the Iowa workers’ comp laws. Most notably, late fees have been minimized for employers who fail to pay benefits on time, limitations were placed on how much an attorney makes in legal fees, PPD payments are not made until the employee reached MMI, and more.
  • New Mexico Senate Bill 155: This bill limits workers’ comp temporary total disability and permanent partial disability benefits for injured workers who leave their current employers or fail to accept a job offer.
  • California Senate Bill 1160: All liens in the state of California have added requirements to verify that each lien is legitimate, filed only by the lien holder and the liens owned by providers who have been indicted or charged with crimes be held until the disposition of criminal proceedings.

Tierney added that it is important for employers to know about any changes to workers’ comp laws and how they could potentially affect their workers’ comp programs. Be flexible to implement new changes, he said.

OSHA Rulings and Regulations

When it comes to worker safety and OSHA, Allen Gilley, managing director at Marsh, said the focus and priorities have not changed within the organization since inauguration day six months ago.

Trump’s proposed budget would not significantly affect OSHA, and Gilley noted that the tone of the organization has not altered since the new administration took office.  He cautioned, however, that employers could see a change in OSHA enforcements when the new Assistant Secretary of Labor is appointed.

In the meantime, Gilley said employers should be focused on the existing expectations from OSHA. A handful of rules and regulations established under the Obama administration are in effect or will be within the next few months, most notably:

The final ruling on crystalline silica dust. Construction sites have until September 23 to comply with OSHA’s ruling on silica dust. The permissible exposure limit was reduced to 50 micrograms per cubic meter of air, which requires employers to use engineering controls to limit exposure, provide respirators, develop a written exposure control plan, offer medical exams to highly exposed workers and increase training on how to avoid silica exposure.

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And, the final ruling on tracking workplace injuries. In its continued effort to improve safety for workers across the nation, OSHA changed the way injury and illness are tracked in the workplace — through electronically submitted records.

Organizations employing more than 250 workers must submit electronic records of onsite OSHA Injury and Illness forms. Though many employers believe this is a breach of employee privacy, OSHA stands firm that the practice will motivate employers to focus on safety in the workplace.

The electronic system is set to go live August 1, with a compliance date of December 1.

Marsh held this third webinar in a four-part series on Wednesday, July 19, 2017. The next webinar in the series will take place Wednesday, November 8, 2017.

Autumn Heisler is the digital producer and a staff writer at Risk & Insurance®. She can be reached at [email protected]

More from Risk & Insurance

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The Profession

For This Pharmaceutical Risk Director, Managing Risk Means Being Part of the Mission to Save Lives

Meet Eric Dobkin, director, insurance and risk management, for Merck & Co. Inc.
By: | September 28, 2018 • 5 min read

R&I: What was your first job?
My first job out of undergrad was as an actuarial trainee at Chubb.I was a math major in school, and I think the options for a math major coming out are either a teacher or an actuary, right? Anyway, I was really happy when the opportunity at Chubb presented itself. Fantastic company. I learned a lot there.

R&I: How did you come to work in risk management?
After I went back to get my MBA, I decided I wanted to work in corporate finance. When I was interviewing, one of the opportunities was with Merck. I really liked their mission, and things worked out. Given my background, they thought a good starting job would be in Merck’s risk management group. I started there, rotated through other areas within Merck finance but ultimately came back to the Insurance & Risk Management group. I guess I’m just one of those people who enjoy this type of work.

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R&I: What is risk management doing right?
I think the community is doing a good job of promoting education, sharing ideas and advancing knowledge. Opportunities like this help make us all better business partners. We can take these ideas and translate them into actionable solutions to help our companies.

R&I: What could the risk management community be doing a better job of?
I think we have made good advancements in articulating the value proposition of investing in risk management, but much more can be done. Sometimes there is such a focus on delivering immediate value, such as cost savings, that risk management does not get appropriate attention (until something happens). We need to develop better tools that can reinforce that risk management is value-creating and good for operational efficiency, customers and shareholders.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?
I’d actually say there hasn’t been as much change as I would have hoped. I think the industry speaks about innovation more often than it does it. To be fair, at Merck we do have key partners that are innovators, but some in the industry are less enthusiastic to consider new approaches. I think there is a real need to find new and relevant solutions for large, complex risks.

R&I: What emerging commercial risk most concerns you?
Cyber risk. While it’s not emerging anymore, it’s evolving, dynamic and deserves the attention it gets. Merck was an early adopter of risk transfer solutions for cyber risk, and we continue to see insurance as an important component of the overall cyber risk management framework. From my perspective, this risk, more than any other, demands continuous forward-thinking to ensure we evolve solutions.

R&I: What’s the biggest challenge you’ve faced in your career?
Sticking with the cyber theme, I’d say navigating through a cyber incident is right up there. In June 2017, Merck experienced a network cyber attack that led to a disruption of its worldwide operations, including manufacturing, research and sales. It was a very challenging environment. And managing the insurance claim that resulted has been extremely complex. But at the same time, I have learned a tremendous amount in terms of how to think about the risk, enterprise resiliency and how to manage through a cyber incident.

R&I: What advice might you give to students or other aspiring risk managers?
Have strong intellectual curiosity. Always be willing to listen and learn. Ask “why?” We deal with a lot of ambiguity in our business, and the more you seek to understand, the better you will be able to apply those learnings toward developing solutions that meet the evolving risk landscape and needs of the business.

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R&I: What role does technology play in your company’s approach to risk management?
We’re continuing to look for ways to apply technology. For example, being able to extract and leverage data that resides in our systems to evaluate risk, drive efficiencies and make things like property-value reporting easier. We’re also looking to utilize data visualization tools to help gain insights into our risks.

R&I: What are your goals for the next five to 10 years of your career?
I think, at this time, I would like to continue to learn and grow in the type of work I do and broaden my scope of responsibilities. There are many opportunities to deliver value. I want to continue to focus on becoming a stronger business partner and help enable growth.

R&I: What is your favorite book or movie?
I’d say right now Star Wars is top on my list. It has been magical re-watching and re-living the series I watched as a kid through the eyes of my children.

R&I: What is the riskiest activity you ever engaged in? When I was about 15, I went to a New York Rangers versus Philadelphia Flyers game at the Philadelphia Spectrum. I wore my Rangers jersey. I would not do that again.

Eric Dobkin, director, insurance & risk management, Merck & Co. Inc

R&I: What is it about this work you find most fulfilling or rewarding?
I am passionate about Merck’s mission of saving and improving lives. “Inventing for Life” is Merck’s tagline. It’s funny, but most people don’t associate “inventing” with medicine. But Merck has been inventing medicines and vaccines for many of the world’s most challenging diseases for a long time. It’s amazing to think the products we make can help people fight terrible diseases like cancer. Whatever little bit I can do to help advance that mission is very fulfilling and rewarding.

R&I: What do your friends and family think you do?
Ha! My kids think I make medicine. I guess they think that because I work for Merck. I suppose if even in a small way I can contribute to Merck’s mission of saving and improving lives, I am good with that. &




Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]