It’s Been A Bumpy Ride Since 1972

June 14th, 2016 by Tom Lynch

In its report to President Nixon, the 1972 National Commission on State Workmen’s Compensation Laws, created by the Occupational Safety and Health Act of 1970, concluded that workers’ compensation laws and benefits were vastly disparate among the states. Benefits in one state might be generous, while across the nearest border they’d be parsimonious.

Although Commission members differed on some points, they unanimously agreed parity among the states was highly desirable. They also recognized that to achieve this goal federal preemption as well as federal minimum standards were impractical for two reasons. First, the federal government had not demonstrated it was capable of successfully undertaking such an effort and, second, entrenched vested interests would fight to the death to preserve the status quo (I wonder what the members would say about today’s vested interests’ clawhold on the system?).

Consequently, in its report, the Commission made 84 coverage and benefit recommendations to the states, 19 of which it termed “essential” in order to establish an adequate workers’ compensation law. In the thirty-year period between 1972 and 2002, the states adopted an average of 12.9 of the 19 recommendations, or about 67% of them. The nationwide workers’ compensation crisis of the late 1980s and early 1990s put the brakes on any movement to adopt more of the recommendations.

In the recent past, workers’ compensation reform has percolated again, only this time in the opposite direction. For example, the October, 2015, Propublica/National Public Radio series, echoing back 43 years to 1972, once again threw a stark light on the continuing lack of uniformity in state benefits. In a kind of circle-the-wagons, and if that doesn’t work, head-to-the-bunker reaction, the series was roundly and caustically criticized by members of the workers’ compensation industry. But, as John Adams said in his summation when courageously defending British soldiers following the Boston Massacre, “Facts are stubborn things.” And one, inescapable fact is that in terms of the generosity of workers’ compensation benefits, in 2016 it matters greatly in which state an injury occurs.

Then there’s opt-out. Given the complexity and bureaucracy of the workers’ compensation system, I certainly cannot blame employers for saying, “We want out.” However, if employers are allowed to create their own systems, what happens, as I’ve written before, “down the street, around the corner at Kenny’s Citgo when one of Kenny’s five employees is injured on the job?”

And now, in a little uphill blowback, the Florida Supreme Court has ruled it is unconstitutional to cut off temporary total disability benefits at 104 weeks to a worker who remains totally disabled and unable to work and has not reached maximum medical improvement. This harkens back to the 1972 Commission’s Recommendation 3.17, which said total disability payments should be paid for the duration of the disability without regard for dollar amount or time. It will be interesting indeed to see how Florida deals with this ruling. It is a serious setback for employers.

I have to admit a nationwide lack of uniform benefits makes no sense to me. I just don’t get it. The 1972 Commission also had a remedy for this. It recommended, “that compliance with these recommendations should be evaluated July 1, 1975, and, if necessary, Congress, with no further delay in the effective date, should guarantee compliance.” Well, that never happened did it?

So, where are we?

We’ve advanced some distance, but, as John Burton, the Chair of the 1972 Commission, suggests, if we continue to advance at this rate, the 19 essential recommendations will be law throughout the land sometime in the 23rd century.

As with everything else in business, this all comes down to money.

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