Legal Trends

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 a staff writer at Risk & Insurance. She can be reached at [email protected]

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