Government Watch

Industry Watchers React to Calls for Federal WC Intervention

Noted workers' comp bloggers share their thoughts on the recent call for federal oversight of the workers' comp system.
By: | November 30, 2015

“As members of Congress who are concerned about a pattern of detrimental changes to state workers’ compensation laws and the resulting cost shift to public programs like Social Security Disability Insurance, we are writing to express our interest in working with the administration to strengthen the safety net for workers injured on the job and improve the oversight of state workers’ compensation systems.”

Thus begins a letter to U.S. Labor Secretary Thomas E. Perez from 10 ranking members of Senate and House committees, including presidential hopeful Sen. Bernie Sanders, D-Vt.  The authors say their concerns stem partially from recent reports critical of the industry.

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The reports from National Public Radio and ProPublica said benefits are not adequate to support and compensate injured workers. One recent report cited in the letter noted efforts to allow employers in some states to opt out of the traditional workers’ compensation system.

“The race to the bottom now appears to be nearly bottomless, as some states are adopting ‘opt-out’ laws which enable employers to set up their own ERISA-based workers’ compensation programs where employers can establish certain exclusions, heightened thresholds for casualty and abbreviated time periods for employees to report an injury,” the letter states.

“We would welcome a report from the department on how it will reinstate oversight of state workers’ compensation programs, what areas it intends to address, and whether added authorities are needed to better ensure that the interests of injured workers and taxpayers are protected.”

The members of Congress say the situation for injured workers has deteriorated since 2004 when the DOL ended a 32-year practice of reporting on states’ compliance with national standards recommended by a presidential commission. They say the DOL “should take a renewed interest [in] strengthening oversight of state workers’ compensation programs by using the agency’s expertise and authorities. In particular, we would welcome a report from the department on how it will reinstate oversight of state workers’ compensation programs, what areas it intends to address, and whether added authorities are needed to better ensure that the interests of injured workers and taxpayers are protected.”

Workers’ comp bloggers expressed skepticism about the chances of a total federal overhaul of the state-based workers’ comp system. However, they also suggested the increased scrutiny of the industry should serve as a wake-up call.

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“Some of the people clamoring for Federal oversight do not, in my opinion, understand the fundamentals of workers’ comp,” wrote Robert Wilson, president and CEO of workerscompensation.com. “That is not to say our industry does not have flaws. We absolutely do. … We also have some culpability in the SSDI mess, as we are a prominent feeder system to that program.” He suggested the industry should revamp its attitude “and focus away from claims management towards that of recovery and return.”

Another blogger advised industry practitioners not to take offense “that some might like to see a federal review of state work comp or that there might be some heavy handed federal position taken. I don’t really see that happening any time soon,” wrote David DePaolo, founder, president, and CEO of WorkCompCentral.com. “But if reviews and discussions lead to better balance, more efficiency, greater understanding, then we’re the beneficiaries.”

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]