austin, texas july 14 - 18, 2007 general session touching the future general session touching the...
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AUSTIN, TEXAS JULY 14 - 18, 2007
GENERAL SESSION
Touching the Future
GENERAL SESSION
Touching the Future
Southern Association of Workers Compensation Administrators
GENERAL SESSION
Touching the Future
GENERAL SESSION
Touching the Future
Garry G. Mathiason, Esq.Garry G. Mathiason, Esq.
Southern Association of Workers Compensation Administrators
Five Windows Into the Future: Agenda
This is not a summary of Current Legal Developments
Story of Legal Initiatives
Five Windows Into the Future: Agenda
Mandatory Wellness
Safety Incentives
Immigration Reform
The Exclusive Remedy
A Footnote on ERISA
The Crisis of WellnessAnd Workers’ Compensation
The Crisis of WellnessAnd Workers’ Compensation
The FutureThe Future
The Crisis of WellnessThe Crisis of Wellness
The Crisis of WellnessThe Crisis of Wellness
The Crisis of WellnessThe Crisis of Wellness
• The CDC has declared obesity a national epidemic
• The CDC has declared obesity a national epidemic
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 1985
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 1986
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 1987
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 1988
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 1989
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 1990
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 1991
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14% 15%–19%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 1992
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14% 15%–19%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 1993
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14% 15%–19%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 1994
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14% 15%–19%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 1995
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14% 15%–19%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 1996
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14% 15%–19%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 1997
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14% 15%–19% ≥20%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 1998
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14% 15%–19% ≥20%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 1999
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14% 15%–19% ≥20%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 2000
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14% 15%–19% ≥20%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 2001
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14% 15%–19% 20%–24% ≥25%
Source: Behavioral Risk Factor Surveillance System, CDC.
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
Obesity Trends* Among U.S. AdultsBRFSS, 2002
No Data <10% 10%–14% 15%–19% 20%–24% ≥25%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 2003
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14% 15%–19% 20%–24% ≥25%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 2004
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14% 15%–19% 20%–24% ≥25%
Source: Behavioral Risk Factor Surveillance System, CDC.
Obesity Trends* Among U.S. AdultsBRFSS, 2005
(*BMI ≥30, or ~ 30 lbs overweight for 5’ 4” person)
No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%
Workplace Wellness InitiativeWorkplace Wellness Initiative
• Smoking continues to be the number one cause of preventable death in the US
• Smoking continues to be the number one cause of preventable death in the US
Health Care Costs Health Care Costs
• Health Care costs will reach $4.2 trillion by 2016
• Since 2000 employment-based health insurance premiums are up 87%.
• Medical Costs Now Exceed Indemnity Costs for WC (Over 55%)
• Notwithstanding NY, Calif., and Florida “Reforms” Workers’ Comp. Medical Costs Increase at 3X Inflation
Health Care CostsHealth Care Costs
• Starbucks spends more on health care than it does on coffee beans
• Starbucks spends more on health care than it does on coffee beans
Health Care CostsHealth Care Costs
• Employers have almost exhausted the options for modifying coverage to control costs (from co-pays to unitary plans)
• Aon Estimated Managed Care Could Control Up To 10% of WC Costs—Most Measures Have Been Taken
• Employers have almost exhausted the options for modifying coverage to control costs (from co-pays to unitary plans)
• Aon Estimated Managed Care Could Control Up To 10% of WC Costs—Most Measures Have Been Taken
Health Care CostsHealth Care Costs
• 25% of the 5.3 billion GM spent on health care in 2005 could be traced back to unhealthy habits such as overeating, lack of exercise, cigarettes, and alcohol
• 25% of the 5.3 billion GM spent on health care in 2005 could be traced back to unhealthy habits such as overeating, lack of exercise, cigarettes, and alcohol
Health CostsHealth Costs
• Obese Workers Filed Twice The # of WC Claims and 7X higher medical costs
• 13X More Days Lost From Injury Or Work Illness Than Non-Obese Workers
• Duke Medical Center Analysis, Archives of Internal Medicine, April 23, 2007 (NIOSH Grant)
• Obese Workers Filed Twice The # of WC Claims and 7X higher medical costs
• 13X More Days Lost From Injury Or Work Illness Than Non-Obese Workers
• Duke Medical Center Analysis, Archives of Internal Medicine, April 23, 2007 (NIOSH Grant)
Health Care CostsHealth Care Costs
• Smokers Have Twice The Accident Rate of Non-Smokers—Economist Marvin Kristein, Ph.D., Am. Health Foundation
• Four Year Study at Xerox with 3,338 employees—Smokers Averaged $2,189 Workers’ Comp. Costs vs. $176 For Nonsmokers.
• Smokers Have Twice The Accident Rate of Non-Smokers—Economist Marvin Kristein, Ph.D., Am. Health Foundation
• Four Year Study at Xerox with 3,338 employees—Smokers Averaged $2,189 Workers’ Comp. Costs vs. $176 For Nonsmokers.
Health “Benefits”Health “Benefits”
• Health is essential in the workplace for productivity, attendance, reduced turnover, and reduced work related injuries and illness
• Health is essential in the workplace for productivity, attendance, reduced turnover, and reduced work related injuries and illness
The Benefits of “Wellness” The Benefits of “Wellness”
• Life Saving For Employers, Employees, and The Workers’ Compensation System
• Yet----
• Life Saving For Employers, Employees, and The Workers’ Compensation System
• Yet----
Workplace Rights Are Increasing Workplace Rights Are Increasing
• Individual Workplace rights are increasing as they relate to medical privacy, harassment, discrimination, and retaliation
• Individual Workplace rights are increasing as they relate to medical privacy, harassment, discrimination, and retaliation
Workplace Rights Are Increasing Workplace Rights Are Increasing
• Many restrictions on individual height and weight have been found to violate the ADA or to adversely impacting a protected group (e.g. women), leading to claims of discrimination and harassment
• Many restrictions on individual height and weight have been found to violate the ADA or to adversely impacting a protected group (e.g. women), leading to claims of discrimination and harassment
The Wellness CollisionThe Wellness Collision
• Growing recognition of wellness as a corporate asset demands a full-fledged attack on preventable illness and injury
• Growing recognition of wellness as a corporate asset demands a full-fledged attack on preventable illness and injury
The Wellness CollisionThe Wellness Collision
• Every employer will become involved in this “war” as the workplace has a powerful effect on individual health (with half of waking hours spent working)
• This coming “war” will involve every Workers’ Compensation Administrator
• There are no sidelines---this is your battle as much as it is a battle for employers and employees
• Every employer will become involved in this “war” as the workplace has a powerful effect on individual health (with half of waking hours spent working)
• This coming “war” will involve every Workers’ Compensation Administrator
• There are no sidelines---this is your battle as much as it is a battle for employers and employees
The Wellness CollisionThe Wellness Collision
• The US Government established the creation of wellness programs by employers at a 2010 goal aiming at reaching 75% of employers and 75% of the workforce
• The US Government established the creation of wellness programs by employers at a 2010 goal aiming at reaching 75% of employers and 75% of the workforce
The Wellness CollisionThe Wellness Collision
• This initiative collides with over 50 years of employment laws and rights to privacy
• This initiative collides with over 50 years of employment laws and rights to privacy
The Wellness CollisionThe Wellness Collision
• The legal community has been slow to provide options and advice on how to reconcile these interests
• Many Workers’ Compensation Administrators have questioned their role and lacked an understanding of how to become involved
• The legal community has been slow to provide options and advice on how to reconcile these interests
• Many Workers’ Compensation Administrators have questioned their role and lacked an understanding of how to become involved
The Wellness CollisionThe Wellness Collision
• One experienced corporate counsel of a large employer stated she has never seen more complex employment law questions than those associated with wellness programs
• One experienced corporate counsel of a large employer stated she has never seen more complex employment law questions than those associated with wellness programs
Meet Joe PellegriniMeet Joe Pellegrini
Meet Joe PellegriniMeet Joe Pellegrini
• Cycles 36 miles a day to and from work
• Solid Muscle – 48 year old triathlete• Supply chain executive at Scotts
Miracle-Gro Co., a $2.7 billion organization with 6,000 employees
• Cycles 36 miles a day to and from work
• Solid Muscle – 48 year old triathlete• Supply chain executive at Scotts
Miracle-Gro Co., a $2.7 billion organization with 6,000 employees
Voluntary Wellness . . . or ElseVoluntary Wellness . . . or Else
• With half of the 6,000 employees overweight or morbidly obese and a quarter of them smoking – something had to be done
Voluntary Wellness . . . or ElseVoluntary Wellness . . . or Else
• Scott’s established the usual elements of a voluntary wellness program, and then added some “not so voluntary” conditions
• Scott’s established the usual elements of a voluntary wellness program, and then added some “not so voluntary” conditions
Voluntary Wellness . . . or ElseVoluntary Wellness . . . or Else
• If an employee refuses a health risk assessment – $40/month in higher premiums
• Those who refuse a health coach lose another $67/month
Joe PellegriniJoe Pellegrini• Bad cholesterol levels caused
Joe’s company to provide him a health coach – who pressuredPellegrini to have a series of diagnostic tests
• Joe finally agreed . . .
• Bad cholesterol levels caused Joe’s company to provide him a health coach – who pressuredPellegrini to have a series of diagnostic tests
• Joe finally agreed . . .
Joe PellegriniJoe Pellegrini
The results were shocking: a 95% blockage in two arteries gave him less than a week to live
Joe PellegriniJoe Pellegrini
• Within an hour of the diagnosis, two life-saving stents were inserted
• Within an hour of the diagnosis, two life-saving stents were inserted
Joe PellegriniJoe Pellegrini
• This almost certainly would not have happened without his employer’s wellness program – now making him a national celebrity due to BusinessWeek’s Feb. 26, 2007 report
• This almost certainly would not have happened without his employer’s wellness program – now making him a national celebrity due to BusinessWeek’s Feb. 26, 2007 report
Joe PellegriniJoe Pellegrini• Scott’s program goes further:
- Test positive for nicotine during your introductory employment period and lose your job•Discrimination lawsuit pending
in Massachusetts •Request to enjoin Scott’s
from enforcing or applying its anti-nicotine program
• Scott’s program goes further:- Test positive for nicotine during your introductory employment period and lose your job
•Discrimination lawsuit pending in Massachusetts
•Request to enjoin Scott’s from enforcing or applying its anti-nicotine program
The Voluntary/Mandatory ContinuumThe Voluntary/Mandatory Continuum
• Voluntary Plans are becoming common – expected to ultimately reach the goal of covering 75% of the workforce
• Vol. Plans yield positive results – but are they enough?
• Experts like Harvard Business School Professor Michael Porter, say more is needed
• Voluntary Plans are becoming common – expected to ultimately reach the goal of covering 75% of the workforce
• Vol. Plans yield positive results – but are they enough?
• Experts like Harvard Business School Professor Michael Porter, say more is needed
The Voluntary-Mandatory ContinuumThe Voluntary-Mandatory Continuum
Lance Armstrong; Newsweek, April 9, 2007, p. 37
“We can prevent about one third of cancer deaths just by widely distributing information about prevention and early detection – but we aren’t doing it.”
“We Have to be Ruthless”“We Have to be Ruthless”
The Voluntary-Mandatory ContinuumThe Voluntary-Mandatory Continuum
The Voluntary-Mandatory ContinuumThe Voluntary-Mandatory Continuum
• The evidence between health and fitness is overwhelming
• It’s linked to:- new brain cells, - less Alzheimers, - less depression, - better memory, and - exercise can make you smarter!
• The evidence between health and fitness is overwhelming
• It’s linked to:- new brain cells, - less Alzheimers, - less depression, - better memory, and - exercise can make you smarter!
The Voluntary-Mandatory ContinuumThe Voluntary-Mandatory Continuum
• The health fitness connection is undeniable.
• Inactive: - 40% more colon cancer- 45% greater chance of coronary artery
disease (CAD)- 60% greater risk of osteoporosis
• Exercise reduce risk of falls and injury• Two additional hours of life expectancy
for each hour of vigorous exercise
• The health fitness connection is undeniable.
• Inactive: - 40% more colon cancer- 45% greater chance of coronary artery
disease (CAD)- 60% greater risk of osteoporosis
• Exercise reduce risk of falls and injury• Two additional hours of life expectancy
for each hour of vigorous exercise
The Voluntary-Mandatory ContinuumThe Voluntary-Mandatory Continuum
• The health fitness connection is undeniable.
• The Xerox Study: Participating employees in health programs saved Co. $1,238 per year in workers’ compensation claims
• Kimberly-Clark (Everett Mill) initiated a wellness program focused on excise and strength building—Muscular-skeletal injury cost went from $514,07 to $67,851 Annually
• The health fitness connection is undeniable.
• The Xerox Study: Participating employees in health programs saved Co. $1,238 per year in workers’ compensation claims
• Kimberly-Clark (Everett Mill) initiated a wellness program focused on excise and strength building—Muscular-skeletal injury cost went from $514,07 to $67,851 Annually
The Legal ChallengesThe Legal Challenges
• Health Insurance Portability and Accountability Act of 1996 (HIPAA)
• December 13, 2006 Wellness Regulations becames effective July 1, 2007.
• Joint Effort DOL and IRS – anti-discrimination rules of ERISA health plans (the vast majority of all plans)
The HIPAA FiveThe HIPAA Five
1. Rewards cannot exceed 20% of total cost
2. Reasonably designed to promote health or prevent disease
3. Annual eligibility4. Alternative standards for
participants with medical conditions5. Plan material must disclose
alternatives and waiver
1. Rewards cannot exceed 20% of total cost
2. Reasonably designed to promote health or prevent disease
3. Annual eligibility4. Alternative standards for
participants with medical conditions5. Plan material must disclose
alternatives and waiver
The HIPAA FiveThe HIPAA Five
• Meeting the HIPAA five not a safe harbor from other statutes
• Employers may be able to enforce other reasonable workplace requirements
• The story is starting not ending
• Meeting the HIPAA five not a safe harbor from other statutes
• Employers may be able to enforce other reasonable workplace requirements
• The story is starting not ending
ADA/State Disability LawsADA/State Disability Laws
1. Limit on questions that can be asked or requiring a medical examination
- Info goes to Third Party Administrator2. Confidentiality of Medical Information
- Info goes to Third Party Administrator3. Essential Functions of the Job and A
Health Factor Requirement – Reasonable Accommodation – Undue Hardship
1. Limit on questions that can be asked or requiring a medical examination
- Info goes to Third Party Administrator2. Confidentiality of Medical Information
- Info goes to Third Party Administrator3. Essential Functions of the Job and A
Health Factor Requirement – Reasonable Accommodation – Undue Hardship
ADA/State Disability LawsADA/State Disability Laws
• What is a disability? • Does a wellness plan discrimination
based on a disability or perception of a disability?
• Are poor health habits protected by the ADA?
• What is the adverse consequence? What is the activity required by the employer?
• What is a disability? • Does a wellness plan discrimination
based on a disability or perception of a disability?
• Are poor health habits protected by the ADA?
• What is the adverse consequence? What is the activity required by the employer?
ADEA/State Age StatutesADEA/State Age Statutes
• Age and weight have been well litigated – airline cases
• Age and fitness requires adjustments• Can a Wellness Program (Mandatory)
be adjusted to NOT adversely impact employees based on age?
Title VIITitle VII
• Gender – BMI standards based on gender and age
• Religion – Accommodation for medication
NLRANLRA
• Duty to negotiate as a mandatory subject of bargaining
• Modification of medical plan
• Union support possible (UAW e.g.--$120 health insurance contribution for taking annual screening tests)
Privacy-A New BalancePrivacy-A New Balance
• Balance between personal privacy and the social, economic, and personal benefits of wellness
• Regulations and state legislation expected
• The Workers’ Compensation Community needs to join in the debate
Lawful Off-Duty ConductLawful Off-Duty Conduct
• Potential prohibition of tests for lawful substances such as nicotine
• Activity outside the workplace that is lawful but not good for one’s health – Do they impact the workplace?
• Potential prohibition of tests for lawful substances such as nicotine
• Activity outside the workplace that is lawful but not good for one’s health – Do they impact the workplace?
Genetic TestingGenetic Testing
• State law prohibitions unless voluntary• Congress considering: “Genetic
Information Nondiscrimination Act of 2007”- Allows voluntary testing not disclosed
to the employer except collectively
Today’s Wellness PlansToday’s Wellness Plans
• The economic evidence of wellness programs is substantial and mounting
• March 31, 2007 St. Louis Business Journal “Wellness Worth Every Dollar You Spend.” Prudential Study
• $4.50 of lowered medical expenses for every dollar spent on wellness programs (45 Jour of Occ. & Environ. Medicine 109-117 (2003))
Tomorrow’s PlansTomorrow’s Plans
• Mandatory wellness plans that set requirements for weight, BMI, or general health conditions may be upheld but discipline will receive close scrutiny
• Mandatory wellness plans that require actions in the workplace such as mandatory education, physical activity, and “goals” will be more enforceable
Tomorrow’s PlansTomorrow’s Plans
• Individual harassment protections will be heightened while wellness plans and health targets become more common
• This is an achievable but difficult balance – it is already available in employment harassment prevention programs (www.elt-inc.com)
TransformationsTransformations
• Workers’ compensation carriers and administrators can play a vital role in this coming “war”.
• Creative economic partnerships with mandatory wellness plans
Worker’ Compensation EssentialsWorker’ Compensation Essentials
• Become informed about the economic benefits and mandatory legal engineering possibilities (Littler 2007 Report Provided)
• Suggest options and offer assistance• Provide Third Party Role Re: Privacy• Consider new legal theories for plan
design—State legislative opportunities• Prepare for the consequences
New Area of ClaimsNew Area of Claims
• The Darker Side of Wellness• Meet Todd Malouin• Participated in employer wellness
plan on Co. time – ruptured left bicep tendon
• Supreme Court of New Hampshire, June 13, 2007 Decision
• The Darker Side of Wellness• Meet Todd Malouin• Participated in employer wellness
plan on Co. time – ruptured left bicep tendon
• Supreme Court of New Hampshire, June 13, 2007 Decision
New Area of ClaimsNew Area of Claims
• State Law: Excluded “athletic/recreational activities” from coverage
• Unless “participation was a condition of employment, or was required for promotion, increased compensation, or continued employment.”
• Coverage Affirmed!
• State Law: Excluded “athletic/recreational activities” from coverage
• Unless “participation was a condition of employment, or was required for promotion, increased compensation, or continued employment.”
• Coverage Affirmed!
Benefits of Wellness Programs:Benefits of Wellness Programs:
• For Every Todd Malouin there will be at least ten claims never filed
• The Movement toward mandatory wellness is an overwhelming force
• Transformations will be intellectual and physical
• For Every Todd Malouin there will be at least ten claims never filed
• The Movement toward mandatory wellness is an overwhelming force
• Transformations will be intellectual and physical
• Safety Related Incentives When It Pays To Be Safe
• Safety Related Incentives When It Pays To Be Safe
The Future The Future
Controlling Workers Compensation Costs
Controlling Workers Compensation Costs
• Major Area of Legislative and Employer Attention.
• NY 20.5% Reduction (7/12/07)
• What About Direct Incentives?
Beyond Wellness: Controlling Workers Compensation Costs
Beyond Wellness: Controlling Workers Compensation Costs
• Fed-OSHA Critical of Incentives
• Underreporting Testimony in the 80’s & 90’s
• Clinton Administration’s Challenge
Controlling Workers Compensation Costs
Controlling Workers Compensation Costs
• Workers Compensation Challenges
• Discrimination against those who file claims
• Class actions based on workers compensation retaliation
When Can WC Costs Be UsedWhen Can WC Costs Be Used
• Bonus for managers with low claims rates—one example.
• Ralphs Grocery Co. v. Superior Court just argued in California Supreme Court
• Can WC costs be part of a bonus calculation?
Safety IncentivesSafety Incentives
• The key is to overcome underreporting
• Independent auditing—sampling professionals
• Employee education• More defensible if part of
a comprehensive safety and wellness program
• The key is to overcome underreporting
• Independent auditing—sampling professionals
• Employee education• More defensible if part of
a comprehensive safety and wellness program
Workers Compensation Benefits and Undocumented Workers: The Coming Change
Workers Compensation Benefits and Undocumented Workers: The Coming Change
The FutureThe Future
The Hidden WorkforceThe Hidden Workforce
• Currently there are at least 12 million undocumented workers in the U.S. (Pew Hispanic Center Report)
• Are These Workers Eligible For Workers’ Compensation Benefits?
• If you are in Idaho or Wyoming the answer is NO (e.g., Wyo. Stat. Ann. 27-14-102(a)(vii)
Hidden WorkforceHidden Workforce
• If you are in the rest of the U. S. the answer is probably YES
• Calif., NY, Texas and Florida, Utah and Nev. statutorily recognize undocumented workers as eligible for WC.
• Other states recognize them by case law. E.g. Continental PET Technologies v. Palacias, 2004 Ga. App. LEXIS 1225 (Sept. 13, 2004)
• If you are in the rest of the U. S. the answer is probably YES
• Calif., NY, Texas and Florida, Utah and Nev. statutorily recognize undocumented workers as eligible for WC.
• Other states recognize them by case law. E.g. Continental PET Technologies v. Palacias, 2004 Ga. App. LEXIS 1225 (Sept. 13, 2004)
Hidden WorkforceHidden Workforce
• Federal law may pre-empt certain benefits such as retraining and rehabilitation
• Some states prohibit benefits on other grounds (e.g., fraud).
• Comprehensive survey of laws (Am. Assoc. of State Comp. Ins. Funds, 3rd Quarter 2007 “Workers’ Compensation and the Undocumented Worker” Prof. of Law Thomas Lee, Brigham Young Univ. et al. )
• Federal law may pre-empt certain benefits such as retraining and rehabilitation
• Some states prohibit benefits on other grounds (e.g., fraud).
• Comprehensive survey of laws (Am. Assoc. of State Comp. Ins. Funds, 3rd Quarter 2007 “Workers’ Compensation and the Undocumented Worker” Prof. of Law Thomas Lee, Brigham Young Univ. et al. )
Immigration Reform?Immigration Reform?
• Congress is deadlocked on how to resolve the legal status of undocumented workers.
• With no resolution, the status quo survives• What is the status Quo?• Projected that significant numbers of injuries
go unreported. [74 Fordham L. Rev. 1521, 1529 (2005)]
Immigration Reform?Immigration Reform?
• Why are claims underreported?
- Fear of Deportation
- Distrust of Government
- Implicit Discouragement by Employers
- Lack of Knowledge
- Lack of English
- Lack of Representation
• Why are claims underreported?
- Fear of Deportation
- Distrust of Government
- Implicit Discouragement by Employers
- Lack of Knowledge
- Lack of English
- Lack of Representation
Immigration Reform?Immigration Reform?
• So—why should be we concerned about immigration reform prior to the next Presidential election?
• Senate may not be done
• But the Real Reason is Homeland Security
• Imagine the Following
• So—why should be we concerned about immigration reform prior to the next Presidential election?
• Senate may not be done
• But the Real Reason is Homeland Security
• Imagine the Following
July 31, 2007July 31, 2007
• Suicide Bombing in Six US Cities
• Coordinated Attack by Al Qaeda
• US Reaction Is Extreme—Public Demands Immediate Action To Close Border
• Suicide Bombing in Six US Cities
• Coordinated Attack by Al Qaeda
• US Reaction Is Extreme—Public Demands Immediate Action To Close Border
Immigration Reform (Hypothetical)Immigration Reform (Hypothetical)
• Senator Clinton introduces Senator Clinton introduces Immigration Identification and Immigration Identification and Security ActSecurity Act
• All Undocumented workers are to All Undocumented workers are to be registered within 30 days of be registered within 30 days of passage. Anyone not registered passage. Anyone not registered will be declared a potential enemy will be declared a potential enemy combatant and is subject to combatant and is subject to immediate deportation immediate deportation
• Those Registering Are Protected Those Registering Are Protected From Deportation and Given From Deportation and Given Interim Work PermissionInterim Work Permission
• Borders Sealed By Whatever Borders Sealed By Whatever Means NeededMeans Needed
• Senator Clinton introduces Senator Clinton introduces Immigration Identification and Immigration Identification and Security ActSecurity Act
• All Undocumented workers are to All Undocumented workers are to be registered within 30 days of be registered within 30 days of passage. Anyone not registered passage. Anyone not registered will be declared a potential enemy will be declared a potential enemy combatant and is subject to combatant and is subject to immediate deportation immediate deportation
• Those Registering Are Protected Those Registering Are Protected From Deportation and Given From Deportation and Given Interim Work PermissionInterim Work Permission
• Borders Sealed By Whatever Borders Sealed By Whatever Means NeededMeans Needed
Impact on Workers CompensationImpact on Workers Compensation
• Approximately 12 Million Workers Approximately 12 Million Workers Properly IdentifiedProperly Identified
• Hispanic Organizations And Hispanic Organizations And Organized Labor Advise Workers Organized Labor Advise Workers Of RightsOf Rights
• Use Of Workers Compensation Use Of Workers Compensation To Cover Workplace Injuries And To Cover Workplace Injuries And Potential Sole Access To Medical Potential Sole Access To Medical Assistance.Assistance.
• Claims Increase Yet Number Of Claims Increase Yet Number Of Workers In System Does Not Workers In System Does Not Significantly Change (Limiting Significantly Change (Limiting New Premiums). New Premiums).
• Approximately 12 Million Workers Approximately 12 Million Workers Properly IdentifiedProperly Identified
• Hispanic Organizations And Hispanic Organizations And Organized Labor Advise Workers Organized Labor Advise Workers Of RightsOf Rights
• Use Of Workers Compensation Use Of Workers Compensation To Cover Workplace Injuries And To Cover Workplace Injuries And Potential Sole Access To Medical Potential Sole Access To Medical Assistance.Assistance.
• Claims Increase Yet Number Of Claims Increase Yet Number Of Workers In System Does Not Workers In System Does Not Significantly Change (Limiting Significantly Change (Limiting New Premiums). New Premiums).
Impact on Workers CompensationImpact on Workers Compensation
• Industries Industries PredictablePredictable
• Claims PredictableClaims Predictable
• Rating and Rating and Reserves Reserves PredictablePredictable
• Timing is Timing is UnpredictableUnpredictable
• This is not This is not Speculation----This Speculation----This is the future in is the future in 2008? 2009?2008? 2009?
• Industries Industries PredictablePredictable
• Claims PredictableClaims Predictable
• Rating and Rating and Reserves Reserves PredictablePredictable
• Timing is Timing is UnpredictableUnpredictable
• This is not This is not Speculation----This Speculation----This is the future in is the future in 2008? 2009?2008? 2009?
The Exclusive Remedy Future Cracks?
The Exclusive Remedy Future Cracks?
The Future The Future
The Exclusive Remedy Related 2007 Cases
The Exclusive Remedy Related 2007 Cases
• Supreme Court of Supreme Court of Florida, June 21, 2007Florida, June 21, 2007
• Proof of intentional Proof of intentional concealment of danger concealment of danger unnecessary (defective unnecessary (defective ladder, employee had ladder, employee had requested new one)requested new one)
• But Statute was But Statute was amended (Bakerman v. amended (Bakerman v. The Bombay Company)The Bombay Company)
• Supreme Court of Supreme Court of Florida, June 21, 2007Florida, June 21, 2007
• Proof of intentional Proof of intentional concealment of danger concealment of danger unnecessary (defective unnecessary (defective ladder, employee had ladder, employee had requested new one)requested new one)
• But Statute was But Statute was amended (Bakerman v. amended (Bakerman v. The Bombay Company)The Bombay Company)
The Exclusive Remedy Related 2007 Cases
The Exclusive Remedy Related 2007 Cases
• Supreme Court of Texas, Supreme Court of Texas, June 1, 2007June 1, 2007
• Lien for surplus hospital Lien for surplus hospital costs on employee tort costs on employee tort lawsuitlawsuit
• Held: Since no Held: Since no reimbursement from reimbursement from employee was possible, employee was possible, the lien was voidthe lien was void
• Issue: Recovery of Issue: Recovery of reduced medical charges reduced medical charges (not paid medical charges)(not paid medical charges)
• Supreme Court of Texas, Supreme Court of Texas, June 1, 2007June 1, 2007
• Lien for surplus hospital Lien for surplus hospital costs on employee tort costs on employee tort lawsuitlawsuit
• Held: Since no Held: Since no reimbursement from reimbursement from employee was possible, employee was possible, the lien was voidthe lien was void
• Issue: Recovery of Issue: Recovery of reduced medical charges reduced medical charges (not paid medical charges)(not paid medical charges)
The Exclusive Remedy Related 2007 Cases
The Exclusive Remedy Related 2007 Cases
• Supreme Court of New Supreme Court of New Mexico, April 18, 2007Mexico, April 18, 2007
• Can tort action exist Can tort action exist while receiving interim while receiving interim WC benefit? What WC benefit? What about partial and full about partial and full lump sum payments?lump sum payments?
• Held: Yes WC benefits Held: Yes WC benefits can be received, but can be received, but not full lump sum not full lump sum settlementsettlement
• Supreme Court of New Supreme Court of New Mexico, April 18, 2007Mexico, April 18, 2007
• Can tort action exist Can tort action exist while receiving interim while receiving interim WC benefit? What WC benefit? What about partial and full about partial and full lump sum payments?lump sum payments?
• Held: Yes WC benefits Held: Yes WC benefits can be received, but can be received, but not full lump sum not full lump sum settlementsettlement
The Exclusive Remedy Related 2007 Cases
The Exclusive Remedy Related 2007 Cases
• Supreme Court of Supreme Court of New York (not the New York (not the same)same)
• What is a grave What is a grave injury allowing roofer injury allowing roofer to recover beyond to recover beyond WC?WC?
• Answer: $30 million Answer: $30 million dollar paralysisdollar paralysis
• Supreme Court of Supreme Court of New York (not the New York (not the same)same)
• What is a grave What is a grave injury allowing roofer injury allowing roofer to recover beyond to recover beyond WC?WC?
• Answer: $30 million Answer: $30 million dollar paralysisdollar paralysis
The Exclusive Remedy Related 2007 Cases—Coverage Issue
The Exclusive Remedy Related 2007 Cases—Coverage Issue
• How important is the How important is the coverage question?coverage question?
• In Iowa it is very In Iowa it is very importantimportant
• $13,087,453 award $13,087,453 award 3/6/07 from jury for 3/6/07 from jury for bad faith denial of bad faith denial of coverage (causation coverage (causation of injury)of injury)
• How important is the How important is the coverage question?coverage question?
• In Iowa it is very In Iowa it is very importantimportant
• $13,087,453 award $13,087,453 award 3/6/07 from jury for 3/6/07 from jury for bad faith denial of bad faith denial of coverage (causation coverage (causation of injury)of injury)
The Exclusive Remedy Related 2007 Cases
The Exclusive Remedy Related 2007 Cases
• Conclusions• Challenges will
continue• Exclusivity is usually
honored• Qualifications
important for fund administration (such as interim benefits)
• Conclusions• Challenges will
continue• Exclusivity is usually
honored• Qualifications
important for fund administration (such as interim benefits)
Federal Pre-Emption The Future of ERISA and Workers Compensation Claims
Federal Pre-Emption The Future of ERISA and Workers Compensation Claims
The Future The Future
Navarro and its FollowingNavarro and its Following
• California Decision• Denying medical
coverage to someone who has made a workers compensation claim.
• Cannot be processed under Labor Code Section 132a. Must proceed under the Medical plan
• There is a future for ERISA preemption !
• California Decision• Denying medical
coverage to someone who has made a workers compensation claim.
• Cannot be processed under Labor Code Section 132a. Must proceed under the Medical plan
• There is a future for ERISA preemption !
Southern Association of Workers’ Compensation Administrators
Southern Association of Workers’ Compensation Administrators
1. Become a source of information on mandatory wellness programs
2. Sponsor ROI studies3. Become a change agent
The Future Is Yours
The Future Is Yours
Southern Association of Workers Compensation Administrators
Are You Are You Ready?Ready?
THANK YOUfor your timeTHANK YOUfor your time
Garry G. Mathiason, Esq.Garry G. Mathiason, Esq.
Southern Association of Workers Compensation Administrators
The Tangled Web: ADA & Workers Compensation
The Tangled Web: ADA & Workers Compensation
• ADA• ADA
The Tangled Web: ADA & Workers Compensation
The Tangled Web: ADA & Workers Compensation
• ADA• ADA
The Tangled Web: ADA & Workers Compensation
The Tangled Web: ADA & Workers Compensation
• ADA• ADA
Southern Association of Workers’ Compensation Administrators
Southern Association of Workers’ Compensation Administrators
1. Become a source of information on mandatory wellness programs
2. Sponsor ROI studies3. Become a change agent
The Tangled Web: ADA & Workers Compensation
The Tangled Web: ADA & Workers Compensation
• ADA