The first edition of the It’s Complicated blog began an exchange of ideas about what workers’ compensation is and what it could be. The dialogue started with four questions. The responses to the questions were thought-provoking and raised even more questions. The responses are summarized below.
The Definition of “Injury”
The first question was basic ? what is a workers’ compensation injury? ? and it had four possible answers. The “something else” option received the largest share of the votes (31.82%), which supports this blog’s title. An injury that occurs when an employee would not have had the injury “but for” the job received 27.21% of the votes. An injury that occurs primarily because of the job received 22.73%, and an injury that occurs solely because of the job received 13.64%.
Over half of the respondents commented on this question, which was the purpose of all the questions. Many said that a compensable injury must arise out of and in the course and scope of employment, which is the definition of injury in many states. In other words, the employee was engaged in an activity that was related to the employer’s business, and the injury occurred during the time that the employee was “on duty.” One responder commented, “If an injury happens at work, it should be covered, period, end of story.”
But this approach doesn’t give us all the answers. Does the definition include occupational diseases? It does in some states, but not in others. Also, now that hybrid working arrangements are more common in the wake of COVID-19, how do we determine whether a virtual worker’s injury at home arises out of and in the course and scope of employment? If an employee is working on a project at 8:00 p.m. and trips over their dog in the kitchen when they go to get a cup of coffee, is the injury covered?
When the grand bargain is discussed, it is described as a no-fault system for employees in exchange for workers’ compensation becoming the exclusive remedy for work-related injuries. But is it a no-fault system if coverage is denied to a worker who violates a safety rule or a drug/alcohol policy? If exceptions exist to the no-fault basis of workers’ comp, should exceptions to exclusive remedy face a lower bar than an intentional tort or gross negligence?
What effect should pre-existing conditions have on whether a claim is compensable? One respondent wrote that “we cannot exclude injuries that would otherwise not have occurred due to the job – even if there was an underlying condition.” Responses to this seemingly simple question raised more questions.
One of the respondents made a valid point in any conversation about what workers’ compensation should be. “Workers’ compensation is not so much a grand bargain as it is a fragile balance of the interests of injured workers, employers, and society. If benefits swing too much one way or the other, fractures will occur in that balance.”
Compensation for Permanency
The second question was about benefit adequacy: what is the most appropriate method to compensate an employee for losses due to a permanent injury? The largest number of respondents (45%) chose the method based on loss of an injured worker’s earning capacity.
Benefit adequacy was one of the major issues addressed in the 1972 report of the National Commission on State Workmen’s Compensation. The Commission’s report stated that injured workers should have protection against interruption of their income and that benefits should be tied to loss of income. Surprisingly, the report went into detail about temporary total disability (TTD), permanent total disability (PTD), and death benefits but did not address permanent partial disability similarly. Perhaps it was because TTD, PTD, and death benefits are easier to define in a formula.
One responder, who chose the option to base benefits on a loss of earning capacity, commented that “lost wages alone do not accommodate actual financial loss.” Another said, “A person’s capacity to earn wages can be diminished long-term by an injury. When that happens, they need compensation based upon the difference between their ‘pre’ and ‘post’ injury capacity to earn wages.”
Some of the responders, who did not choose a benefit based on loss of earning capacity, spoke to the complexity of a fair balance among options. One wrote, “Impairment is the closest thing we have to an objective determination, and it is a problematic tool at best. Lost wages and earning capacity are highly subjective and result in huge variations from tribunal to tribunal even within jurisdictions.” Another wrote, “Physical impairment is not the same thing as economic impairment. There are cases where the physical impairment is huge, and the lost wages are minimal or none at all.”
Also, recognize that physical impairment may not be “huge” but could end the worker’s career, as in the oft- cited case of the pianist. Another said, “Both the amount of impairment and lost wages need to be included in the equation. But to include earning capacity is far too subjective and would bog down administrative systems in litigation.” Another wrote, “I support one (method) that is based on lost wages with a requirement that the injured worker makes a good faith effort to find alternate employment that would provide a salary of 80% or more of their pre-injury wage.” This approach would answer employers’ concerns about fairness in the benefit for a permanent impairment.
And the response that wins the It’s COMPlicated award for getting to the point was, “There is no answer that appropriately applies to any and all instances. There will be unfairness in any model in some situation. The evidentiary challenges with wage loss and capacity are onerous. The impairment model compensates with amazingly inappropriate outcome in each direction.”
The third question ? who should be covered by workers’ compensation? ? had the fewest comments and the most agreement. But they didn’t go as far as the National Commission report, which stated that states’ workers’ compensation laws should be compulsory for all employees. Ironically, the Commission’s report remarked that, while the trend to cover more classifications had been improving in the years going up to 1972, progress was slow, and it would probably be fifty years before all occupations were covered! Today those fifty years have passed, and compulsory coverage for all employees has not occurred.
Many responders thought all three categories of employees in the question (domestic workers, agriculture, and workers in the gig economy) should be covered, although domestic workers received a smaller number of votes (51.35%), compared to agricultural workers (75.69%), and workers in the gig economy (62.16%). On the other side of opinions, almost a quarter of responders voted that none of the classifications should be covered.
So, the question is whether the grand compromise is only for employers of a certain size and certain occupations. If that is the case, what responsibility does society have to aid those who do not have the means to pay for medical care, or rent, or other living expenses when they are injured in the course and scope of their employment? These are the workers who have the fewest resources to deal with injuries.
One responder commented that “if there is an employer-employee relationship, there should be workers’ comp coverage.” But is it that simple? If workers’ compensation were compulsory for all employees, would there be unintended consequences? Would a significant number of jobs at the lower end of the pay scale disappear, and the means of earning a living with it? It is COMPlicated.
Controlling Medical Care
The last question was about the most expensive component of workers’ comp, medical care ? how much control should an employer have over medical care? The comments were thoughtful and expressed the concerns about the issue that are often heard today. One person said it well: “The whole aim is to return a person to as near as possible to pre-injury health and at the same time keep the workplace family unit in place, so that the employer and the injured worker both understand that return to work is the only acceptable outcome.”
The option that received the most votes was a panel provided by the employer from which an employee could choose his/her doctor. However, many of the comments discussed the advantages of having some type of hybrid process to determine the treating physician. “Employer choice does not lead to employee satisfaction. When an injured worker chooses the medical provider, he/she does not get the best result, but the employee reports higher satisfaction. Perhaps employee choice with employer approval would work well. I know of no system that uses that model. We have to keep in mind that in some parts of the country there are not a lot of opportunities to have choices.” Another responder wrote, “I have seen too many abuses when the absolute right to control medical rests in one party or the other.” Another wrote, “Coming from a state that provides for employer control of medical through a panel of physicians, my answer may be surprising, but I have seen too many abuses when the absolute right to control medical rests in one party or the other…A hybrid choice with input and agreement from both employer and employee might be a nice alternative.” One responder commented, “Being a believer in checks and balances, I would choose a system that allows the employee to select the physician with the approval of the employer.” And finally, someone said it succinctly: “I think in order to create trust and a good claims process, both parties should play a role in the health care provider.”
Respondents were almost evenly split between those who favored the employer making the decision about the physician and the employee making the decision. Interestingly, both opinions supported their view with references to research that supported their opinions. So much for relying solely on statistics!
Others brought up real problems with medical care, whether the employee or the employer controls medical care. Among the problems mentioned were the difficulties in finding appropriate specialists who would accept workers’ compensation patients. Another mentioned the importance of using providers “who understand the need for recovery and return to work goals to improve the condition of the worker.” As Bob Wilson says, it is all about recovery.
Conclusion: Looking Forward
Comments like those in response to this blog’s first questionnaire are important during this year commemorating the fiftieth anniversary of the report of the National Commission on State Workmen’s Compensation Laws. It’s also significant, considering the United States Department of Labor’s report during the Obama administration, “Does the Workers’ Compensation System Fulfill Its Obligations to Injured Workers?” That report said the states were moving further from the recommendations in the Commission’s report and were not addressing the issues that have arisen since then.
As written in this blog last month, just because the “right” workers’ compensation system has been discussed for fifty years without a clear answer, doesn’t mean it can’t be done. The answer could start with a simple blog.
Thanks to all who contributed so far to a robust dialogue. Let’s keep the conversation going.