Risk Insider: Tim Liberty

What Does Your State Want for Its Injured Workers? It Will Dictate WC Reforms

By: | October 2, 2018 • 2 min read

Tim Liberty is a senior claims consultant with Baldwin Krystyn Sherman Partners and has nearly a decade of risk management experience. He can be reached at [email protected]

Legislatures are constantly under pressure from lobbyists for both employer and worker advocate groups pushing for workers’ compensation reforms that benefit their causes. While considering alterations to state laws, it is important for lawmakers to understand their state’s underlying goal for their workers’ compensation system.

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Most in the industry know of the “grand bargain” and the workers’ compensation goal of granting medical treatment and lost wages to injured workers while providing exclusive remedy to the employer. But when you can declare “mission accomplished” on a claim depends.

Laws vary greatly state by state, and these variances often alter the underlying goal of workers’ compensation. Although there are many possible outcomes of a claim, I would argue that there are only two underlying goals of the system: for the injured worker to return to work (RTW) in the same capacity or for the injured worker to achieve maximum medical improvement (MMI).

I would argue that there are only two underlying goals of the system: for the injured worker to return to work (RTW) in the same capacity or for the injured worker to achieve maximum medical improvement (MMI).

Often these two outcomes are achieved simultaneously, but not always. A common occurrence is an injured worker being placed at MMI with some sort of permanent restriction that does not allow them to return to work. The laws of the benefit state dictate these goals.

Looking at two states, Florida and North Carolina, we can see the difference.

Let’s say a truck driver suffers a lumbar injury and needs surgical intervention. After surgery and weeks of post-op treatment he is placed at MMI and given a permanent restriction of lifting no more than 15 pounds, which does not allow him to return to his job as a truck driver.

If he were in Florida, he would be paid out his impairment rating and the claim would essentially be resolved. These claims generally settle or may stay open for palliative treatment, but for the purposes of this exercise, let’s say that he does not settle. He would be paid out an impairment rating and sent off on his way to find a new job or not. It would be no concern of the carrier anymore.

As legislatures continue to amend their laws, they need to understand their current underlying goal and enact laws that are consistent with their desired identity.

If he were employed in North Carolina, his indemnity benefits would continue until he gets a new job. When he does, he is still entitled to compensation if his new job does not pay what his old one did for up to 500 weeks.

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Therefore, I would argue that the goal of Florida’s system is to have an injured worker achieve MMI while North Carolina’s is to return an injured worker to work. There are some caveats to this; for instance, Florida does have a state vocation rehabilitation program, but is difficult to get accepted into.

A thorough dive into each state’s laws would be needed to determine if it is a RTW or MMI state, but that classification could be illuminating in identifying best practices in order to improve the workers’ compensation system across the board. As legislatures continue to amend their laws, they need to understand their current underlying goal and enact laws that are consistent with their desired identity.

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