Monthly Archives: April 2011

Ohio governor seeks reduction; Texas court rules against fired worker

Liberty Mutual hunts more damages from AIG workers’ comp case

Yesterday we covered, among other things, a potentially huge workers’ comp rate in California and discounted rates offered to members of the National Federation of Independent Business (NFIB).

Today we see in BusinessWeek and Forbes articles that say the Ohio governor wants lower workers comp rates for his state.

Governor’s goal: 4 per cent reduction

From BusinessWeek: “Ohio’s governor wants the state to lower the premiums employers pay for workers’ compensation by 4 percent for a total cut of about $65 million a year.”

From Forbes: “Gov. John Kasich’s office said the goal is to reduce the cost of doing business in Ohio and make the state more competitive. His proposal was submitted Thursday to the board of the state Bureau of Workers Compensation. If adopted in May, employers would first see premium changes in February.”

Rates determined by sector and claims history

According to the Cleveland Leader, “Presently, rates for specific businesses are determined by the industry that it is in and its claims history. Steve Buehrer, BWC Administrator and CEO, said that the goal is to reduce costs for all employers in Ohio, and one of the factors in the decision to reduce rates is a trend of decreasing claims frequency and positive investment returns.”

Texas high court says state immune from worker-comp retaliation suits

In Texas, the state Supreme Court delivered a setback to workers who are improperly fired in retaliation for filing workers’ comp claims.

An April 29 piece at Business Insurance says, “The state of Texas, including its political subdivisions, is immune from workers compensation retaliation lawsuits, the Texas Supreme Court ruled Friday.

Terminated ‘shortly after’ workers’ comp filing

“According to the decision in Travis Central Appraisal District vs. Diane Lee Norman, Ms. Norman went to work for the district as a probationary employee in January 2006. She was terminated six months later, shortly after filing a workers compensation claim, and sued for retaliation under Texas’ workers compensation statute.”

Opinion reverses earlier ruling

An Austin American-Statesman article says, “An earlier Supreme Court ruling said state law waived sovereign immunity, which protects government from being sued over most issues, for claims under the Texas Anti-Retaliation Act.

“But Friday’s opinion held that recent changes in law stripped the sovereign immunity waiver for cities, counties, school districts and other local governments.”

‘Ruling weakens employee protection’

A Statesman blog adds: “Plaintiffs lawyers say the ruling weakens employee protection and gives local governments free rein to fire workers’ comp recipients without proper cause.

Attorney says workers still have ‘ADA Act and grievance procedures’

“But Jennifer Powell, who argued the case on behalf of the appraisal district, said fear of lawsuits has kept governments from firing workers’ comp recipients for legitimate but unrelated reasons. Employees who believe they were improperly fired can still seek protection under the Americans With Disabilities Act and internal grievance procedures, Powell added.”

Liberty Mutual fights AIG settlement

Liberty Mutual is fighting a proposed settlement in the AIG workers’ comp premiums case.  A Bloomberg piece in The Boston Globe says, “American International Group should pay more than $1.5 billion to rivals to settle a lawsuit alleging the insurer cheated industry-funded pools that cover injured workers, Liberty Mutual Holding Co. said.

Liberty seeks more than triple AIG agreed to

“The proposed damages are more than triple the $450 million that AIG agreed to in a preliminary settlement advocated by seven insurers, including Travelers Cos. and Ace Ltd. in January. The higher payout is justified because the settlement didn’t account for the full scope of AIG’s underreporting of premiums, Liberty Mutual’s Safeco and Ohio Casualty subsidiaries said in federal court documents filed in Chicago.”

Was under-reported amount $2 billion–or $6.1 billion?

Marketwatch reports that “Liberty Mutual is challenging a key component of the proposed settlement, arguing that AIG had underreported its workers’ compensation premiums by $6.1 billion, instead of the roughly $2 billion outlined in the settlement agreement.

“The putative class-action case–and another lawsuit that preceded it–concern payments insurers are required to make, based on their market share, to support state-mandated pools for workers’ compensation coverage. The state pools cover workers who can’t get coverage from the private sector.”

AIG calls proposal ‘a desperate attempt’

Business Insurance weighs in with a look at both perspectives:

In a statement, Liberty Mutual called the proposed settlement “detrimental to the class of over 500 insurance companies victimized by AIG’s admitted wrongdoing.”

Judge Gettleman is scheduled to hear Liberty Mutual’s challenge to the settlement in June, sources said.

The insurers that agreed to the settlement are: ACE INA Holdings Inc., Auto-Owners Insurance Co., Companion Property & Casualty Insurance Co., Firstcomp Insurance Co., Hartford Financial Services Group Inc., Technology Insurance Co. and Travelers Indemnity Co.

AIG said in an emailed statement, “The settlement before the court is fair and reasonable, and Liberty’s opposition is the latest in a long line of desperate attempts to derail a settlement supported by the 50 state insurance departments and the other insurance companies in the litigation. We are confident that the settlement will be approved despite Liberty’s repeated efforts to prevent the parties from reaching a resolution.”

“Liberty has made this claim to regulators, experts and other insurance companies and been rejected by them all.”

Frequently enough, a worker’s compensation case may be so complex as to demand legal representation. However, sometimes what seems like a cut-and-dried situation to an injured worker may result in a smaller award than envisioned–or even a denial. Have you, a friend or a loved one been injured on the job? Whether you’re merely seeking answers about your rights or believe a lawsuit may be necessary, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources:

Workers compensation basics

Injury on the job

Filing a claim

Maine proposal for ‘reform’ draws ire of first reponders

Supporters of N. Carolina proposals hope to cut TTD benefits

Last time we mentioned workers’ comp problems in Maine but focused on the legislative battle in Washington state. Today we’ll look at Maine and North Carolina.

An April 14 article in The Portland Press Herald says, “Firefighters, police officers and other first responders turned out for a public hearing Wednesday to oppose a bill that would curb eligibility for permanent coverage for mental illnesses under Maine workers’ compensation law.

Bill’s author: it’s needed to cut litigation, ‘unreliable’  claims

“State Rep. Kerri Prescott, R-Topsham, who proposed L.D. 1065, said it is needed to reduce litigation and avoid ‘unreliable’ workers’ comp claims.

“The measure, which came before the Legislature’s Labor, Commerce, Research and Economic Development Committee, was supported by the Maine State Chamber of Commerce, the Workers’ Compensation Coordinating Council and the Maine Council of Self-Insureds.”

One case involves officer who found girl killed in oven

Another April 14 piece is at the Maine Public Broadcasting Network (where you can also listen to a four-minute audio file of the original broadcast):

Businesses and insurers have long been critical of Maine’s workers’ compensation law, which they say is burdensome, and vulnerable to frivolous claims. Now with a governor who said in his inaugural speech he wants to bring down workers’ comp costs, and Republicans in control of the Legislature, supporters of efforts to restrict the law are hopeful. But labor leaders and workers, from EMTs and police officers, to mill and steelworkers, are fighting hard against these bills.

“I did my job and I did it right,” says Bill Fournier, a former Auburn police officer whose life went into a tailspin after he began working on the 1984 Angela Palmer case. Fournier was among the first to find the little girl burned to death in an oven by her mother’s boyfriend.

Fournier told the Legislature’s Labor Committee that a bill to deny permanent worker’s comp coverage for emotional injury is wrong. He was denied worker’s comp, and says he suffer nightmares and flashbacks to this day.

“One particular incident: My wife who was a school teacher for Auburn school department was sitting down correcting papers in the living room. She heard a commotion in the dining room, which was me–screaming. I had my service revolver loaded at my head and the handle was cocked,” Fournier testified.

Injured workers deserve full treatment

It’s too obvious to much discuss that soldiers deserve treatment for the shock and stress of war. It seems obvious that workers could face similar damages from their jobs, especially  emergency workers such as police, firefighters and EMT personnel. A vote is supposed to be scheduled in a few weeks.

Business lines up against worker advocates in N. Carolina

In North Carolina, workers and business leaders have teed off on similar issues, invoking language similar to the Maine controversy. From an April 25 account at Insurance Journal: “Business groups last Thursday praised proposed legislation that changes workers’ compensation laws in ways that lower employer costs, while workers and the lawyers who represent them complained the victims of workplace accidents could be cut off from their only income.

Trying to stop ‘open-ended, lifelong’ claims

“Employers want to limit a system that now has the potential to turn a workplace injury, no matter who was at fault, into ‘a multi-million-dollar event with no legal means to ever end or settle the open-ended, life-long claim. This is not what good and fair workers compensation systems do around the country and it should not happen here,’ said Bruce Clark, president of Capital Associated Industries, which advises companies on employment issues.”

Worker advocates concede that some cheats try to game the system but maintain that insurers do, too,  by forcing injured workers on a carousel of doctor visits, shopping for the cheapest diagnosis.

As proposed, the measure supported by business would extend some benefits: death-benefit payments for dependents from 400 weeks to 500 weeks and burial benefits that max out at $10,000-the first increase in years.

TTD eligibility would be capped

However, TTD (so-called temporary total disability) eligibility would be greatly diminished: injured workers in North Carolina are eligible for lifetime awards in severe cases, but the proposal would cap TTD at slightly more than nine and a half years.

Stop fraud, not earned benefits

We deplore any act of fraud against the system, whether it be committed by the worker, the medical provider, the company, the commission or the insurance carrier. But the whole point of workers’ compensation is to provide treatment for injured workers. In return, companies in compliance don’t get sued for workplace injuries.

If workers aren’t going to be covered, fully covered, then why should businesses get to keep full immunity from lawsuits?

Frequently enough, a worker’s compensation case may be so complex as to demand legal representation. However, sometimes what seems like a cut-and-dried situation to an injured worker may result in a smaller award than envisioned–or even a denial. Have you, a friend or a loved one been injured on the job? Whether you’re merely seeking answers about your rights or believe a lawsuit may be necessary, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources:

Workers compensation basics

Injury on the job

Filing a claim

Workers’ comp battles rage in state halls from Maine to Washington

‘Lump-sum’ a major sticking point in Washington state

We’ve been following legislative battles over workers’ compensation system in several states, especially Washington, Montana and Illinois, and also in West Virginia.

Around the nation, workers’ comp impasses abound

An April 22 piece at Huffington Post picks up on the topic, focusing on a battle in Maine over psychological injuries received in the line of duty (a particular concern for first responders), but concluding with an overview of nationwide perspective:

There’s a flurry of legislative activity around the country — notably in Maine, North Carolina, Illinois, and Montana — geared towards reining in the costs to employers of workers compensation claims. Maine Governor Paul LePage (R), who’s already sparked a high-profile battle with the state’s labor groups, went so far as to mention workers comp reform in his inaugural address. Illinois Governor Pat Quinn (D) recently told his state’s enthusiastic Chamber of Commerce that workers comp reform will happen “this year.”

While some bipartisan efforts exist, Republicans generally push the reforms, which business groups and insurance trade associations support. And though many of these discussions have been brewing for years, the ongoing efforts seem to dovetail nicely with the anti-labor zeitgeist fostered in Wisconsin and Ohio, as stories of able-bodied workers gaming the system now abound in legislative halls.

Evergreen State battles over budgets and ‘lump-sum’ proposal

In Washington state, legislators are struggling with three huge, interrelated issues–the state’s operating budget, its construction budget and workers’ comp reform. House and Senate leaders are so divided that they failed to reach agreement last week when the regular term ended, so Gov. Chris Gregoire has called a special session to revisit the issues beginning April 26.

A ‘permanent battleground’

An April 23 article in the Seattle Post-Intelligencer had this to say about the longstanding feud:

A permanent battle ground for organized labor and business groups, the fight to reform the state’s compensation system for injured workers is heading into overtime after Gregoire deemed it a special session issue and the Senate backed that by putting a bill they want to move forward in their budget. Indeed, business groups and the Senate aren’t giving up a measure that would establish the option of lump sum settlements to the system — a move they will save hundreds of millions of dollars in costs. But labor remains opposed any kind of settlement, saying it undermines the point of the system — one created in 1911 to provide injured workers with money as they heal. The House has proposed its own package of bills that nip-and-tuck the system to streamline it, and they say those changes would add up to about half a billion in savings in the next six years.

Workers’ comp system faces insolvency

As we wrote in earlier in the year, “The Seattle Times calls “one of the most contentious issues in the legislative session.” In February, an emergency rate hike was pushed through, and in January the governor was being praised for a ‘bold plan’ to revamp the system.

“Now, despite progress on different bills, officials are saying hard choices loom ahead, with chances of having a bankrupt system within five years, according to a Feb. 26 piece in the Seattle Post Intelligencer, which reports that the governor, ‘the head of the state Department of Labor and Industries and the state auditor have all said the system is heading toward bankruptcy. In a December report, the auditor’s office said the state’s fund for workers compensation has a 95 percent chance of becoming insolvent in the next five years.’ ”

According to the DLI, about 8 per cent of workers’ comp claims account for nearly 85 per cent of costs, due both to injuries requiring longterm recovery and rehab and also for those awarded lifetime pensions.

Editorial calls for letting workers decide

An editorial in today’s Tacoma News Tribune argues that organized labor has stubbornly drawn a line in the sand and that the lump-sum option has plenty of worker safeguards:

Unions’ attacks on the proposal have a decidedly paternalistic tone. Critics essentially argue that workers don’t know what’s good for them and if given the option of settling their claims for about 80 cents on the dollar, they might just foolishly take it.

Lump-sum settlements would no doubt prove popular here, just as they have in the 44 states that offer them. Many injured workers prefer to get their money upfront rather than have it dribble out in regular checks. In some places, labor has embraced the choice as a worker benefit, which it is.

The settlements would be strictly voluntary, and several safeguards are built into the proposed system to ensure workers make the decision with their eyes open.

The new House proposal improves worker protections even further. Workers would have to wait six months to settle their claims to ensure that they weren’t pressured into premature decisions. Settlements couldn’t be offered to workers who already have pensions, and lump-sum settlements would be allowed for lost earning power only, not medical claims.

Those changes reduce the possible savings to the workers’ compensation system while still retaining a settlement option that would lend the system greater predictability.

Doing nothing should be out of the question. The status quo – a system in which Washington grants lifetime pensions at an unrivaled clip and where about 85 percent of compensation costs come from only 8 percent of all claims – is not sustainable without huge increases in payroll taxes.

Maybe the Governor can push the lege to finally reach consensus and get this problem solved for the workers of Washington State.

Next time: an update on other battles around the country.

Frequently enough, a worker’s compensation case may be so complex as to demand legal representation. However, sometimes what seems like a cut-and-dried situation to an injured worker may result in a smaller award than envisioned–or even a denial. Have you, a friend or a loved one been injured on the job? Whether you’re merely seeking answers about your rights or believe a lawsuit may be necessary, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources:

Workers compensation basics

Injury on the job

Filing a claim

Will Illinois scrap its workers’ compensation system?

News-Democrat reportage leads to unprecedented legislation

The situation in Illinois is really heating up. According to an April 7  Bloomberg Businessweek article, “The Illinois House is considering a plan to scrap the state’s much-criticized workers’ compensation system, leaving businesses and their employees to battle in court over payment for each workplace injury.

“Legislation ending the system was given tentative approval in a voice vote Thursday. Rep. John Bradley, D-Marion, said he plans to hold a final vote as soon as possible.

” ‘Let’s give the courts a chance. Let’s try something else. Because we know what we’ve been doing isn’t working,’ Bradley said in debate.”

The story started with a convicted former state trooper

We’ve  been following the mess in Illinois since last year, when the story broke about the former state trooper who was seeking workers’ comp benefits for being injured during the wreck when his vehicle jumped the median and sliced through another vehicle, killing two teenaged sisters. The Belleville News-Democrat subsequently unearthed a passel of questionable activities in their state’s worker’s comp system, resulting in the suspension of two arbitrators. If you’re interested in the background, you can start here.

Governor says his plan would save $500 million a year

According to this blog, “Last week Governor Quinn proposed a plan to reform the worker’s compensation system in Illinois, saying that his ideas would save employers money and cut down on abuses. The Chicago Tribune reported Quinn’s office estimated the changes would save $500 million a year.

“Quinn’s plan, however, isn’t enough for some Illinois House legislators. This week, Rep. John Bradley (D-Marion) proposed to completely eliminate worker’s compensation in Illinois. Yesterday, the General Assembly debated Bradley’s measure, which he touted would save the state $3 billion. The Bloomington Pantagraph reports Bradley instead would send worker’s compensation cases to state circuit courts. Federal prosecutors have been investigating the system after several reports of fraud and bias.”

News-Democrat rakes system in editorial

At, where much of this sordidness was first reported, an April 7 opinion piece slams the state’s workers’ comp system:

Illinois is a paradise for those claiming they were hurt and can’t work. It’s so bad that we are losing jobs as surrounding states actively market against us.

You can get drunk, get hurt on the job, and get workers’ comp in Illinois.

You can hurt your shoulder bowling, claim you can’t work, and get workers’ comp in Illinois.

You can get benefits calculated past your retirement age, or despite winning the lottery, in Illinois.

The last time the state tried to rework its workers’ comp system was in 2005. That effort was so botched that we now have the nation’s second-highest medical fee schedule.

We’re so far ahead of No. 3 that if we cut the rates paid for specific injuries by 30 percent, we’d still be in second place.

As Quinn points out, making that 30 percent cut would save Illinois’ employers $500 million a year. That money could pay people for performing work and growing the economy instead of paying people for not working and being a drag on the economy.

Premiums, medical fees too high, says another editorial

This re-post of a Chicago Sun-Times editorial gets into specifics:

The problems are clear. The premiums Illinois companies pay for workers comp insurance are significantly higher than in many other states, and the fees paid to medical providers through workers comp are the second highest in the nation. Many businesses pay more for workers comp insurance than they do in state income taxes.

High workers comp costs are a disincentive to set up a business in Illinois — or to stay in business here. As Caterpillar CEO Doug Oberhelman said in a March 21 letter to Quinn, Illinois must take big steps to improve its image as business-friendly.

How much of a mess is our state’s workers comp system? Consider that a majority of employees at one Downstate prison, the Menard Correctional Center, have applied for, or already have received, workers comp disability payments.

As the Belleville News-Democrat has reported, more than $10 million has been paid to 389 prison employees since 2008.

It’s time to get real or watch businesses say goodbye.

But while easing the onerous burden of workers comp for employers, it’s every bit as important to protect the benefits, rights and quality health care for legitimately injured workers. And the rules must be strict enough to encourage employers to provide safe workplaces.

It’s also important not to simply slash fees paid to medical providers without reforms elsewhere in the system. Because workers comp cases require substantially more paperwork and review by doctors and hospitals — and payment is sometimes held up for years — the best medical providers would drop out of the system that reduced payments too much.

Quinn’s proposal, which retains some elements of a bill that failed in the previous legislative session, is a thoughtful effort to navigate a complicated problem and to spread the pain among various stakeholders.

What a mess. Can you imagine being injured on the job in Illinois, without having a trained, experienced attorney to help guide you through the system? As always, we’ll continue to monitor the developments.

Frequently enough, a worker’s compensation case may be so complex as to demand legal representation. However, sometimes what seems like a cut-and-dried situation to an injured worker may result in a smaller award than envisioned–or even a denial. Have you, a friend or a loved one been injured on the job? Whether you’re merely seeking answers about your rights or believe a lawsuit may be necessary, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources:

Workers compensation basics

Injury on the job

Filing a claim