When you see a headline such as “Workers comp premiums drop fifth straight year: Analysis” in this Oct. 4 Business Insurance post, your first thought might be, “Oh, good–my employer’s costs for workers comp are going down.”

But such is not the case.

As explained in this Bloomberg.com post, also from Oct. 4, declining prices are a factor in the overall picture, but what’s really going on is that fewer companies are buying workers comp policies. The data are from an industry group, A.M. Best Co.

2009: Policy sales down 15 %

Bloomberg says, “Workers’ compensation policy sales dropped 15 percent in 2009, to the lowest in 10 years, as unemployment depressed demand, A.M. Best Co. said.

“Policy sales slid to $12.3 billion in 2009 for companies in A.M. Best’s workers’ compensation composite index. Revenue has declined for five straight years, falling 41 percent from its 2004 high of $21 billion, the Oldwick, New Jersey-based insurance ratings firm said today in a statement.”

Highest industry ratio since 2002

The BI account, citing the same report, wrote, “At the same time, the workers compensation insurance industry’s composite combined ratio deteriorated 8.8 percentage points to 120%, the highest composite combined ratio since 2002, when it reached 118.6%.

“ ‘The deterioration was driven primarily by the downward spiral in premium volume as the economy continued to take its toll on exposure levels and competitive pricing remained widespread,’ ” Best said in a statement.

NCCI report found similar rates

InsuranceJournal.com says the report echoes findings of another industry group: “The report is consistent with findings from the National Council on Compensation Insurance (NCCI), annual report that also painted 2009 as a difficult year for workers’ compensation providers.”

According to Bloomberg, Travelers beat Warren Buffet’s Berkshire Hathaway in this sector but that Travelers’ success was a rarity: “Berkshire Hathaway Inc., Warren Buffett’s company, posted a 37 percent decline in policy sales, the steepest fall of the largest 25 companies by premiums in the composite. Travelers Cos., the insurer added to the Dow Jones Industrial Average last year, was the only company in the top 25 to increase its policy sales, gaining 1.2 percent.”

‘Jobless recovery’

BI quoted A.M. Best about the economy and provides links for more information: ” ‘As the economy moves slowly from recession to recovery, the consensus anticipates a jobless recovery; and therefore, sluggish premium growth, meaning the workers compensation segment’s underwriting performance is not expected to rebound over the near term,’ Best said.

“BestWeek subscribers can download a PDF of the special report, “U.S. Workers’ Compensation—2009 Market Review,” at https://www3.ambest.com/MemberCenter/sMC/Cust_Existing.aspx?URATINGID=&fs=0&altnum=0&altsrc=0&tl=7&b=0&nextpage=http://www3.ambest.com/bestweek/purchase.asp?record_code=178548 target=”_blank”. Nonsubscribers can access an excerpt of each special report and purchase individual reports with spreadsheet data.”

‘Stunning’ Michigan case reaches U.S. Supreme Court

Another BI post deals with a Michigan case that earlier in the year had astonished industry observers and legal minds alike . Hearing the case for a second time, a federal judge has once again barred a RICO suit from proceeding against employers accused of conspiring against workers.

“A federal judge has ruled that an attempt by a group of workers to sue their employer under federal anti-racketeering law is pre-empted by Michigan’s workers compensation law’s exclusive remedy,” writes Mark A. Hofmann in an Oct. 4 post.

Plaintiffs invoke RICO

“The case, Paul Brown et al. vs. Cassens Transport Co. et al., was brought by several employees of Edwardsville, Ill.-based Cassens. The plaintiffs alleged that self-insured Cassens and its third-party administrator, Crawford & Co., used unqualified doctors to give fraudulent medical opinions supporting denial of workers comp claims. The plaintiffs filed suit alleging mail and wire fraud violations under the federal Racketeer Influenced and Corrupt Organizations Act, which allows triple recovery of damages.”

Ruling from the 6th Circuit

Here’s a description of the case as it stood during February, from InsideCounsel.com:

Forget gambling, drug trafficking and prostitution.

The latest organized “crime,” according to the 6th Circuit, is conspiring to defraud injured employees of their workers compensation benefits.

In the first decision of its kind, the appeals court recently stunned employment attorneys across America by holding that employers alleged to have schemed with their insurance carriers and/or physicians to wrongfully deny workers compensation benefits can now be sued for treble damages and attorneys fees under the civil fraud provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO).

Although RICO originally targeted criminal organizations such as the Mafia and Hells Angels, counsel warn that Brown v. Cassens Transport Co. exposes legitimate businesses to RICO litigation and intrusive discovery into their handling of workers compensation claims.

“I was frankly quite surprised,” says Robert Abell, a solo employment law practitioner in Lexington, Ky. Abell suggests the ruling should “raise a flag of caution” for any self-insured employers, insurance adjusters and doctors who might appear to reflexively deny workers compensation claims.

Judge said No in 2005

Judge Borman originally rejected the RICO claims in 2005, but a subsequent appeals court allowed them in 2008.

From there, the case proceeded to the U.S. Supreme Court. According to a LexisNexis blog, “The United States Supreme Court vacated that judgment, however, and remanded for further consideration in light of Bridge v. Phoenix Bond & Indemnity Co., — U.S.—, 128 S. Ct. 2131, 170 L. Ed. 2d 1012 (2008), which held unanimously that a civil-RICO plaintiff did not need to show that it detrimentally relied on the defendant’s alleged misrepresentations.”

Argument comes full circle

The LN blog says, “Judge Borman also held that the plaintiffs lacked standing to sue under RICO because their claims for medical expenses and related pecuniary loss did not constitute injury to business or property under RICO and were too speculative to confer standing under RICO” and that  “. . . the court was essentially being asked to decide whether the workers were entitled to workers’ compensation benefits. That decision was exclusively for the state administrative agency under the WDCA.”

In one sense, it seems as though workers comp law should be fairly simple: Was the worker injured on the job? If so, let the workers comp insurance pay the bill.

However, as we’ve seen repeatedly, these cases can be so complex as to wind up in the highest court in the land–whether they get heard there–or not.

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Frequently enough, a workmen’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

One thing about workers comp cases–the issues can be so broad that you never know what oddity may pop up.

For example, regular readers are aware that most states include undocumented workers in workers comp protection. We discussed a couple of such cases here, one from Michigan and one from Nebraska.

Undocumented workers protest in Michigan

Now Michigan is back in the news. Posted March 11 at WILX.com, this brief describes a protest at the state Capitol, including “[s]ome [who] were illegal immigrants, rallying for the state to grant them rights to workers’ compensation.”

State Rep. Rashida Tlaib (D-Detroit) has introduced a bill that would grant such coverage and was quoted as saying, “We’re only one of two states in the nation that does not allow workers that are undocumented to compensate when they are injured on the job.”

As might be expected, not all her colleagues agree with the idea, indicating its passage has a snowball’s chance…

Rep. Rick Jones (R-Grand Ledge) said, ““The only thing we should be giving illegal immigrants is a bus ride home.”

Jones, taking a “Michigan-workers-first” stance, brought up bogus Social Security IDs and the expense to companies to pay into the workers comp system.

But Tlaib “and others” countered with a point to ponder: pointing out “that requiring companies to pay workers’ comp might discourage them from hiring illegal immigrants in the first place.”

Ex-Deputy Warden cites nepotism as stressful

Now here’s a doozy, from a March 10 post with a Wilkes-Barre (PA) dateline: everybody knows somebody who’s felt disadvantaged by on-the-job nepotism. But in this case, former Deputy Warden Sam Hyder,  Luzerne County Correctional Facility, says nepotism was a major reason for the workplace problems that should leave him eligible for $800 a week in workers comp benefits.

“Hyder claims he suffers from work-related stress due to pressures brought on by” County Commissioner Chairwoman Maryanne Petrilla’s “hiring requests and threats, the suicide of a co-worker, his attendance at an inmate’s autopsy and the publicity he received for outing a drug-dealing prison guard.”

Petrilla has denied not only pushing Hyder to hire unqualified cronies but also says she did not single out Hyder for political reprisal.

According to the article, “Hyder was on medical leave from Aug. 28, 2009 until he was laid off from his $74,263 job in late January 2010. He testified Feb. 2 about how he ‘blacked out’ one day at work from the stress and suffers from anxiety, panic attacks and nightmares. On Tuesday, the county countered with five defense witnesses.”

At least one other employee, a secretary promoted to assistant business manager, seems to back up Hyder’s version, indicating that a “hiring list of the politically connected trumped applications from other qualified candidates.”

Said Jaqueline Grimes: “Everybody, commissioners, judges, magistrates, police officers, would be saying, ‘Give this person a shot. (Prison management) wanted to know, whose person it was. ‘John Doe is my guy, this one is (former Manager/Chief Clerk) Sam Guesto’s.’”

Fired workers say boss pushed her religion on them

And from Ohio, a March 3 AP account reminds us that freedom of religion just might encompass freedom from religion:

“After a sweeping scandal nearly five years ago that cost the state’s insurance fund for injured workers $300 million because of investments in Beanie Babies, rare coins and other risky assets, Ohio beefed up oversight and created a panel to help lawmakers look out for the health of the fund.

“Now, three years after lawmakers created the Ohio Workers’ Compensation Council to advise them on bills involving workers comp issues, the council finds itself entangled in chaos with a director accused of firing the entire staff amid allegations that she pushed her religion on employees.

“The three fired workers each sent letters to council members Tuesday accusing Director Virginia McInerney of wrongful discharge, religious discrimination and harassment, age discrimination and retaliation.”

Described as an occasional guest on “The 700 Club” who also was active in a large evangelical church,  McInerney was said to have led prayers at work and to have passed out religious CDs and at least one religiously themed book.

The piece quotes a former staff attorney as writing in a letter that “It became increasingly clear that the Director was judging employees not on professional performance but on the quality of their faith, according to her beliefs.”

McInerney denies the allegations and says she can’t comment on an ongoing case, but “that she saw no alternative under the law but to fire them.”

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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

Denial of benefits

Choosing an attorney