One of the crucial aspects of the pending financial reform legislation involves strengthening requirements for banks to have more cash reserves on hand. Here’s a quick summary from John Waggoner at USA Today: “The legislation would give regulators more information on mortgages and derivatives, which are complex agreements whose value depends on the level of interest rates, indexes or other financial instruments. Financial companies would have to keep bigger cushions against losses. And the government would be able to seize failing institutions and liquidate them or sell them off, as it can with commercial banks.”

The entities that finance the monetary benefits awarded to injured workers face similar issues and constraints. When employers game the system, by, say, under-reporting headcount or by claiming employees as subcontractors, there’s less funding in the account than there should be. This is why states wrangle with so many permutations of systems to legitimately address treatment for injured workers.

So what happens when the regulators or the fund  itself get things out of whack?

MIMRA deep in the hole

Such is the case in Connecticut, where, according to theday.com, “The Municipal Interlocal Risk Management Agency (MIRMA) was formed in 2002 by the towns of Chaplin and Willington to provide an alternative risk management pool through which towns and other public entities could buy workers’ comp and other insurance.

“But MIRMA has racked up deficits in every year since its formation and now teeters so close to insolvency that a recent report by an external auditor questioned how long the agency would continue to exist.”

Since its creation, designed to provide competition with the Connecticut Interlocal Risk Management Agency (CIRMA), MIMRA has grown to include more than 60 towns and other public entities. Apparently, there’s been warning signs before, but recently the client towns have have had to digest the disturbing news that they are on the hook for more than $9 million.

Creating risk?

Instead of managing risk, MIMRA has been running deficits and was planning on tapping its clients via increased fees, distributed among its 60-plus clients in varying schedules–which could hit some towns to the tune of several hundred thousands of dollars.

According to an April 24 piece at insurancenewsnet.com, “Among the affected towns are North Branford, which will have to pay $600,000 to the agency, and Westbrook, which will pay $158,000, officials said.

” ‘Obviously we were very surprised to hear about this assessment. …. Somehow or other [MIRMA] fell short with projected revenue and had a variety of issues,’ Westbrook First Selectman Noel Bishop said.”

Legislators to the rescue

But facing a major deadline resulting from prior legislation, state legislators have intervened. According to The Day: “But on Wednesday, the state Senate stepped in, voting 33-0 for a measure that postpones by six years the date when MIRMA must bring itself into compliance with the contingency fund requirements. The House of Representatives had earlier passed the bill by a vote of 145-2. The bill awaits action by Gov. M. Jodi Rell.”

In an opinion piece April 25 in the Hartford Courant, Kevin Rennie takes everybody to the woodshed.

“A compelling example of why we don’t trust government to use its authority wisely has been unfolding in the General Assembly. It is a cautionary tale about a small insurance company, bad decisions and legislators who ignore startling facts.”

MIMRA has a “straightforward mission,” Rennie writes,  “and it’s a failure. If MIRMA were a private insurance company, it would have been shuttered long ago. MIRMA, however, enjoys friends and advocates in the legislature, so it careens on toward an expensive abyss. Its financial health has never been robust.”

A series of mistakes

If Rennie’s right, the whole mess is a chain of bad decisions, dating back at least several years, when “the legislature took away the state Department of Insurance’s authority to regulate MIRMA, according to frustrated officials in that agency.

“It has power to review the condition of MIRMA but it cannot act when it sees trouble, and there’s plenty. The department raised the prospect of MIRMA shutting down five years ago. Instead, the legislature passed a bill exempting it from prudent financial standards that require reserves to pay expenses — the medical bills of injured workers.”

Apparently, MIMRA was begun with state-provided capital, unlike its competitor, but by 2004 was running $2.2 million in the hole and about $10 million by the end of 2009. In its most recent audit, an independent outfit found MIMRA’s fiscal condition shaky enough to raise doubts about its ability to continue.

“These bare facts ought to be enough to prompt the legislature to authorize state regulators to intervene,” writes Rennie, adding that, “Instead, a bill extending MIRMA’s exemption from sound business practices sails through the legislature. Swaddled in isolation, the legislature’s Insurance and Real Estate Committee ignored terse February testimony from the Insurance Department describing MIRMA’s troubles.”

Workers’ Compensation Commission Chairman John Mastropietro, “sent a searing letter to MIRMA chairman David Denvir of Killingworth,” says Rennie, “telling him MIRMA must pay the medical bills for the injured workers it insures.” He quotes the chairman: “If doctors and hospitals were to opt out of treating injured employees due to your failure to compensate them in a timely manner, our Workers’ Compensation System would be severely compromised.”

According to The Day, at least part of the impetus in creating MIMRA was because “fully private insurers were not often serving the municipal market, [Rep. Craig] Miner said, noting that MIRMA’s primary approach had been to try to beat CIRMA, its primary competition, on price.”

Co-sponsor claims ignorance of bill

This next revelation from Rennie demonstrates the depth of chaos and confusion. He says he asked one of the new bill’s co-sponsors about the criticism from the WCC chairman–but she said didn’t know about the bill.

“This came as a surprise to one of the co-sponsors of the MIRMA bill, state Rep. Marilyn Giuliano, R- Old Saybrook. She sang the praises of MIRMA and its mission to provide affordable insurance coverage to small towns, when I spoke to her last week. She appeared not to have a clue that the reason it’s affordable is that the premiums it collects don’t cover the cost of paying claims, and haven’t for years.

“When asked why she co-sponsored the bill to exempt from state regulators a company that isn’t paying medical bills incurred for the care of injured workers, she went wobbly. ‘I don’t know where this [bill] might have come from,” she claimed. Perhaps in my research I might ask, she suggested.”

The Day piece closes with a quote from Insurance Commissioner Thomas Sullivan, describing both the way MIMRA was created as well as the dangers of not requiring enough reserves: “This bill is an illustration of the dangers of legislative carve-outs,” said Sullivan. “When companies are permitted to operate with less money than they need, the taxpayers in those towns could be asked to pay more money in taxes to keep the company afloat.”

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Whether you’re an injured employee or an  aggrieved employer, if   you’re facing legal problems regarding workplace  injuries, be sure to   seek counsel with attorneys trained and experienced  in workers’   compensation. Here’s some resources:

Workers compensation basics

Injury on the job

Choosing an attorney

In an April 6 article, The New York Times reported on what was then an under-the-radar, developing story involving the NFL and workers comp benefits in California.

At the time, apparently only a few league insiders and legal types were following the developments of what was being cast as “the Bengals situation,” involving hundreds of retired, injured players getting better benefits by filing under California’s surprising set of rules:

Hundreds of players pursuing claims

“California provides the only workers’ compensation system that allows retired pro athletes to file claims for long-term injuries sustained on playing fields years or even decades before. Quietly, hundreds of football players have received awards or settlements worth at least $100,000 and 700 more players are pursuing claims, many of them by satisfying California’s unique requirement that they played at least one game within state borders.”

That “one game” thang seems to be the crux of the dust-up.  So much so, that some NFL teams have challenged the status quo:

“ ‘It was the sheer number of claims that really started to get the attention of certainly the Bengals and, I think, of other clubs as well; it became an extreme cost,’ said Sam Duran, a lawyer based in Cincinnati who represents the Bengals in workers’ compensation matters. ‘These players have workers’ compensation rights. Those rights happen to be in Ohio.’ ”

In other words, NFL teams are pushing to bring the cases back to their states of origin: If you played for a team based in Ohio, file in Ohio, etc.

The problem, of course, is that the “home states’” benefits that get awarded are often meager, compared to what the former players can get by filing in California.  So injured players have often ignored contract clauses that were “aimed at restricting workers’ compensation option” and filed in California, leading teams to sue players in state court.

A legal maze

The result? “The Bengals situation, as it has become known among the few people paying attention to it, has developed into a knot of legal strings, cases, venues and precedents that even those involved have difficulty untying.”

For example, the Miami Dolphins are taking the tack that such matters must be decided via the arbitration regs in place as part of the players union’s collective bargaining agreement. (Florida law, apparently, does not recognize professional athletes as “employees.”)

From the union’s point of view, contract clauses such as used by the Bengals and Titans are legally unenforceable because of certain California statutes; furthermore, neither “could the union itself bargain away those rights on behalf of players collectively in current negotiations over a new labor agreement.” Perhaps even more compelling, union attorneys contend that the players are backed up by decades-old U.S. Supreme Court rulings that allow “employees from states with limited workers’ compensation benefits . . . [to] file in any state that will accept them.”

The cases of dozens of former Bengals’ players started in state court but got moved to federal court (still in Ohio) and may be decided later this month.

In some cases, state courts have even crossed swords: “After an Ohio judge granted the Bengals’ motion to vacate the California awards pursued by Wilson and other Bengals, the California workers’ compensation judge Joanne M. Coane rebuked not only the team but the Ohio court for issuing the ruling, saying the [Ohio] court was ‘not legally empowered’ and that the ruling ‘has no legal effect.’ ”

Proposed bill could affect all Louisiana workers

More recently, the “Bengals situation” has lost its low-key status. From the April 16 BusinessWeek: “An attempt by the New Orleans Saints to lessen its workers’ compensation costs for injured players mushroomed Thursday into an issue that would apply to all businesses and employees in Louisiana.”

From an April 15 nola.com piece via the Times-Picayune: “A bill that started out trying to lower the New Orleans Saints’ payouts of workers compensation benefits to injured players was expanded in a House committee Thursday to apply to all employers and employees in the state.”

Wow–how’d that happen?

BusinessWeek says, “The Saints were pushing a bill by Rep. Cameron Henry that would require professional athletes for Louisiana teams to be subject to workers’ compensation benefits under Louisiana law if they are injured in a game or practice.”

The Times-Picayune piece says, “Because of possible ‘legal infirmities’ of carving out a niche in the law only for professional athletes, Henry got the panel to amend it to apply to all Louisiana companies whose workers are injured while working out of state.”

Players union disputes bill’s legality

BusinessWeek also makes a distinction not found in the NYT article, which mentions the Dolphins’ preference for arbitration via collective bargaining. According to BW, the players union favors arbitration, too, and in fact disputes the legitimacy of the bill: “The NFL Players Association argued that the claims complaints should be addressed in the collective bargaining agreement between players and team owners and that Henry’s bill will end up in court if it passes.

” ‘With all due respect to Louisiana and any other state, you can’t deal with our issues in California. Only we can deal with that,’ said players union general counsel Richard Berthelsen.”

Some question the need for filing claims for injuries that may go back decades. Berthelsen is indirectly quoted in the BW account, indicating that “many of these claims are being filed decades later because the teams didn’t properly notify players of their workers’ compensation rights to make those claims.”

Another state rep wants to slow down, according to the TP: “Rep. Herbert Dixon, D-Alexandria, the committee’s vice chairman, urged Henry to delay action on his bill since the amended version deals ‘with all employees in Louisiana’ who work out of state, not just athletes. Ponti [another state rep, who voted against the bill] agreed: ‘It leaves a lot of questions unanswered.’ ”

‘Unintended consequences’

BW quoted Ponti:  ” ‘I’m concerned about passing something that we don’t know the unintended consequences of. Is this not something the players and owners could work out in their contract negotiations?’ said Rep. Erich Ponti, R-Baton Rouge, chairman of the committee.”

Sounds like this complicated issue will take quite a while to work through the courts, so it just may be up to collective bargaining to address it in the next NFL-players union negotiations.

Meanwhile, oddly enough,  Rep. Henry’s out-of-date Web page makes no mention of House Bill 1097, but a copy can be found here.

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Whether you’re an injured employee or an aggrieved employer, if you’re facing legal problems regarding workplace injuries, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources:

Workers compensation basics

Injury on the job

Choosing an attorney

As we’ve mentioned before, the stereotype of the scheming worker is not a myth. Insurance investigators frequently bust idjits and ne’er-do-wells who fake injuries and file false claims–only to be caught in videos performing activities too vigorous for their supposed injuries–curiously, some get caught when they themselves post the damning material online.

Nevertheless, judging from news stories, anyway, it seems the reverse is more often true. That is, it seems some employers just can’t stop themselves from trying to game the system by misreporting employee head-counts, denying or discouraging treatment or delaying the process any number of ways. We’ve covered some such actions here and here.

Well, here’s some more.

After all the horrible news about catastrophes in various mines through the years, wouldn’t you think a mine operator would be one of the last to get charged with safety or workers comp violations?

Obviously, the most recent case to grab headlines is the explosion in West Virginia, reported on April 6 in The New York Times and commented on the same day in an NYT editorial. No telling what sorts of legal actions and lawsuits may arise from such a well publicized tragedy.

Hiding mine employees in ‘trucking company’

But what about the smaller, “less volatile” cases?  For instance, According to an April 5 post at ClaimsJournal.com, Pamela Allen, “listed as the sole officer of Sly Branch Energy, an underground coal-mining operation” in Kentucky “has been indicted on charges stemming from an alleged scheme to avoid paying workers compensation insurance.

“A federal grand jury in Lexington has charged Pamela Allen with five counts of mail fraud.”

The allegations center around a fake trucking company, apparently created on paper in order to show mine employees as trucking company employees instead.

“The indictment charges that by hiding employees this way she was able to pay less than she should have for workers compensation insurance.”

Former Smurfit-Stone managers plead guilty

In California, two brainiac, ex-managers for Smurfit-Stone have pleaded guilty to charges involving a slapdash plot to dodge the workers’ comp system by allegedly, for instance, steering  injured workers to a physician’s assistant instead of using the proper medical channels; attempting to fudge leave time; and denying time off to recuperate.

If  it’s the same large company that uses the Smurfit-Stone name throughout North America and a couple of overseas locations, the problem may trace to the company’s pursuit for an exemplary safety record.

News accounts say the employees were managers at Smurfit-Stone’s Salinas, CA, factory, and the Smurfit-Stone Web site indicates that it does have a facility there.

The Insurance & Financial Advisor Web news site posted April 5 that subsequent to an investigation begun in 2006, “[t]wo former managers of a California-based container company pleaded guilty to conspiring to deny injured employees workers’ compensation benefits.

“David Lawrence Polk, 53,  . . .[and] Douglas Minoru Tateoka, 61, both former managers of the Smurfit-Stone Container Corp. plant in Salinas, Calif., recently entered the pleas, according to the California Department of Insurance.”

Between the IFA’s account and a late-March report in the The Herald of  Monterey County,  the picture that emerges is a twisted take on Dumb and Dumber, but instead of unintentionally intercepting a load of ransom money, the principals were intentionally misrouting injured workers away from bona fide medical treatment–and from the injury-reporting system.

Workers steered to physicians assistant

The local DA’s office was contacted in October 2006 by a pair of Smurfit-Stone employees, says The Herald, complaining that workers were discouraged from filing workers’ compensation claims at the Salinas plant.

“The original complaints . . . [reported] that workers were taken to the company doctor, who actually was a physician’s assistant.”

The IFA report says that Polk and Tateoka even managed to insert themselves into the examination area where they tried “to influence the diagnosis and treatment of injuries.

“Polk and Tateoka allegedly concealed workers’ injuries, tried to prevent leave time from being medically prescribed and denied injured workers time off to recover, officials said.”

Effort to reduce reporting injuries

Furthermore, in an apparent effort to keep from reporting time lost due to injuries, the affected employees were reassigned to answering phones, shown training videos, and in some cases relegated to “even remaining in their vehicles in the parking lot . . . .”

In 2007, officials from the DA’s office and state insurance regulators arrived with a search warrant and found that workers were being handled outside the system–so much so, according to The Herald, that “[o]ne employee was given a prescription written in the manager’s name, with the understanding the medication could be given to other employees at the manager’s discretion without medical consultation.”

Perhaps the  larger issue is whether Polk and Tateoka are competent managers who were pressured by a too-stringent company policy, or were they simply a pair of goofballs who overzealously interpreted a strong-but-good-faith effort by the company?

The prosecutor is on the record for the company’s sharing blame, according to The Herald: “Part of the motivation, said the DA, was an incentive program that paid bonuses to managers and other employees if the number of reported injuries was minimized.”

Certainly, we’ve such issues before, which we mentioned in our “Report Cards” post in September 2009, describing the concerns of Colorado legislators over reports of bonuses for state agency workers who denied workers comp claims.

And there’s little doubt that Smurfit-Stone with this homepage takes pride in its claims to safety. On the Web site’s “About our company” page, this is third paragraph: “When it comes to our people, safety is at the core of our operating culture. We are proud to have been recognized as the industry’s safety leader every year since 2001.”

Then, there’s a separate “Corporate Safety” page, with six paragraphs about goals, meeting objectives and so forth, including this: “We are proud to have led the industry in safety since 2001, and our performance continues to improve year after year. Our 2008 corporate safety goal was met by achieving a recordable case rate (RCR) of 0.94, making 2008 Smurfit-Stone’s safest year yet.”

Below a link to Pandemic Preparedness (with a specific bullet point admonishing workers to “stay at home” rather than coming to work sick) are three paragraphs that emphasize the RCR highlights of different divisions.

Unanswered e-mails

But what role the case that resulted in these guilty pleas played in the company’s emphasis on safety–if any–is unclear. Two separate e-mails requesting clarification from media relations personnel remained unanswered at post time.

According to The Herald and IFA, Polk and Tateoka are set to be sentenced May 20.

Charlotte workers who have been injured at work may be eligible to receive medical benefits and lost wage compensation under North Carolinas workers’ compensation. Workers compensation eliminates the need for workers who suffer an injury at work to file a personal injury lawsuit to receive compensation for their work injury. North Carolina employers, without accepting liability or claiming negligence, avoid an expensive protracted lawsuit by paying the injured employee limited monetary benefits.

Not all work injuries are covered by workman’s compensation. Work injuries which are covered must have occurred while the employee was engaged in their regular job duties and while performing them in the required manner. Work injuries which are the result of drug or alcohol intoxication or horseplay are not covered. Work injuries which occur while travelling to and from work or during voluntary, recreational work activities also may not be covered.

There are a variety of work injuries or occupational diseases which are covered by workers comp insurance. Some of the most common are:

• Back and neck injuries
• Abrasions and burns
• Amputations of arms or legs
• Concussions
• Heart attack or strokes on the job
• Carpel Tunnel
• Diseases caused by inhalation of chemicals or other toxins

Charlotte Workers Compensation Benefits

• Medical Benefits – Charlotte workers who sustain an injury at work are entitled to medical benefits. The Charlotte employer is responsible for paying all medical costs which can include: doctor’s bills, surgical costs, medications and rehabilitation services.
• Vocational Rehabilitation Services- If a Charlotte worker sustains an injury at work and is unable to return to their job, they may receive certain types of vocational rehabilitation services which can help them find another job which they can do given their current work capabilities.
• Temporary Total or Temporary Partial Disability Benefits – Temporary total disability payments can be awarded if the injured employee is unable to work at all for a specific period of time. Work injury compensation for total disability payments is 66 2/3% of the workers average weekly earnings. There is a minimum and maximum allowed under North Carolina’s workers compensation law. If an employee is allowed to return to their job, but because of their disability, they are on restricted duty, workers compensation may award temporary partial benefits.
• Permanent or partial disability – If a work injury causes a permanent disability or if the worker loses the function of a specific body part, work injury compensation is paid according to a schedule as outlined by North Carolina’s workers compensation law. If the work injury causes severe disfigurement to the face, head or damage to vital organs the worker may receive additional work injury compensation.
• Death Benefits – Dependents of a Charlotte worker who dies from a work injury or occupational disease may be eligible to receive workman’s compensation for death benefits which equals 66 2/3% of the workers average weekly wage. Benefits are generally paid for 400 weeks, but for spouses (meeting certain requirements) they may be paid until death or remarriage and for minor children they may be paid until the child reaches age 18. Funeral benefits are also allowed up to $2,000.

Do I Need a Charlotte Worker’s Compensation Attorney?

Charlotte workers who suffer an injury at work have the choice of filing their workers compensation claim themselves or hiring a worker comp attorney to help. Unfortunately, Charlotte employers, who may be more focused on company costs and less on the worker’s welfare, will have their own work injury lawyers helping them.

Charlotte workers who have suffered discrimination or harassment due to the work injury or who have been injured by a third party may want to contact a worker’s compensation lawyer.