Brad Wright of Wright on Health has an excellent edition of Health Wonk Review, which shines a spotlight on research. Brad notes that, going forward, research will be incredibly important as health reform is implemented and evaluated. He offers a fine research roundup from leading healthcare bloggers – check it out!
Healthcare – According to a Commonwealth Fund report on healthcare, which assessed and compared data from patient and physician surveys in seven countries in 2007, 2008 and 2009, the U.S. scored sixth out of seven countries on quality issues, yet we spent more than double per person than any other surveyed country. See the full report How the Performance of the U.S. Health Care System Compares Internationally, 2010 Update, which includes both a snapshot chart and an interactive comparison tool. Related: Results from the National Scorecard on U.S. Health System Performance, 2008
The importance of timely reporting – In Manucy v. Joe Manucy Racing, The Louisiana Court of Appeal recently ruled that an employee who was injured during horse training was ineligible for benefits because although the injury was immediately apparent, the worker did not file for benefits until about a year and a half after the injury occurred. Louisiana law stipulates a one-year from date of injury filing deadline for injuries that are immediately evident, and two years for injuries that do not develop immediately. In this case, the injury was immediately apparent, requiring ambulance transport and surgery within two months. State law varies on statues of limitations for benefit eligibility, most commonly falling between one and three years from date of injury. Many states offer some exceptions to the statutes – such as starting the clock ticking at date of disability rather than date of injury or allowing exceptions if there is conduct that might be regarded as deceptive on the part of the employer.
Going and coming – As a rule, any injuries that happen to an employee when they are traveling to or from work – ‘going and coming’ – are not compensable, but there are exceptions. Fortney v. AirTran Airways, Inc. deals with one of those exceptions: service/benefit to the employer. In this case, the employee was killed in a plane crash while flying on a reciprocal arrangement with another airline. The Kentucky Supreme Court upheld benefits to the estate of the deceased. At Lexis Nexis Workers’ Comp Community, Roland Legal PLLC summarizes the issues: “Whether an employer uses transportation or transportation expense as an inducement for an employee to accept or continue employment is material to supporting compensability, particularly when the journey is sizeable and when the employer pays all or substantially all of the expense.” See our prior post about common exceptions to the ‘going and coming’ rule.
Medicare – Get your popcorn and follow along as Joe Paduda offers a guide to the status of the Medicare “fix” and looks at various scenarios for how things may play out.
Retroactive Insurance in Georgia – events continue to play out in the wake of the insolvency of Southeastern U.S. Insurance Inc (SEUS) in Georgia (a story in and of itself, and worth a read if you haven’t been following along). After the SEUS demise, many employers were left holding the bag for the open claims of injured workers because they had not paid into the state’s insolvency fund and were therefore ineligible for coverage. New legislation will cover employers retroactively if they pay into the state insolvency fund, but the Georgia’s Insurers Insolvency Pool has filed a challenge to the new law. “The pool is placed in a position of uncertainty as to whether the legislation imposes duties and obligations on the pool retroactively in violation of the Georgia state constitution,” the filing says.
Arizona judge: no raiding the compensation fund – The state of Arizona is considering an appeal to Maricopa County Superior Court Judge Larry Grant’s ruling which found that Governor Brewer and legislators ignored the plain language of the law by trying to use $4.7 million from the State Compensation Fund to help balance the budget. According to the judge “The proceeds held by the special fund are insurance proceeds held in the benefit of employees and employers covered by the Workers’ Compensation Act.”
Safety shorts
Posts Tagged ‘insolvencies’
Health Wonk Review’s Research Edition & a roundup of other news
Thursday, June 24th, 2010Maryland officials monitoring GM solvency related to workers compensation
Monday, December 8th, 2008With the Big 3 automakers discussing potential fallout if the federal government doesn’t come through with a bailout package, there is one aspect of the fallout that would likely be a mere footnote in the wake of such a massive failure, but that would be of interest to thousands of workers: the issue of what happens to workers compensation claims.
Maryland officials are considering and planning for such a scenario now in the case of GM. The state’s Workers’ Compensation Commission (WCC) is closely monitoring GM and other distressed, self-insured firms with operations in Maryland. Officials note that GM has 200 employees statewide that are covered for workers compensation under the company’s self-insured plan. They note that even in the case of a bankruptcy (which GM states it is not considering), the funding for claims would not automatically be wiped out. R. Karl Aumann, chairman of WCC, said it’s rare for a company to default on its workers’ compensation program. The last time this happened, he said, was with Bethlehem Steel Corp., which declared bankruptcy in October 2001.
In the case of property and casualty insurer insolvencies, every state has a safety net for policyholders, usually in the form of a Guaranty Fund. However, these funds do not necessarily cover self-insured employers, according to an overview of the insolvency process and guaranty fund laws by the The National Conference of Insurance Guaranty Funds:
Q: Am I covered by a state property and casualty guaranty association if I purchased my policy from an unlicensed carrier or a managed care plan?
A: No. Guaranty associations cover only licensed insurers. Companies not licensed in the state, surplus lines carriers, managed care plans, preferred provider organizations (PPOs), Health Maintenance Organizations (HMOs) and self insured plans are not covered under the property and casualty guaranty association statutes. If you purchased coverage from one of these entities, and the company is now insolvent, you may file a claim with the Liquidator. There may also be other guaranty associations that may provide coverage for policies issued by these types of organizations. Your state Department of Insurance can provide you additional information.
Q: How can find out if my company was licensed in my state?
A: Check with your state Department of Insurance. They should have a listing of all admitted companies.
However, many states have some type of guaranty mechanism established that covers self-insured entities. Here are some resources to learn more about the protections that your state affords:
State Insurance Departments
Self-Insurance Guaranty Funds of America
State Guaranty Fund websites
State Guaranty Fund Directory (PDF)
In the case of bankruptcies, workers comp claims payments are often considered a priority – see this discussion of a recent court ruling in Pennsylvania. However, insurers may be out of luck when it comes to payment for workers comp premium in the case of bankruptcy. In the 2006 case of Delivery Service, Inc., et al v. Zurich American Insurance Co., The U.S. Supreme Court ruled that a workers compensation insurer does not have a priority claim against a bankrupt business for unpaid premiums under bankruptcy law.
For more information on State Guaranty Funds and insurer insolvencies, see the Bob Hartwig’s excellent overview for the Insurance Information Institute, which includes a chart about the top 10 largest insurer insolvencies:
Year / Insolvent company / Payments / Recoveries / Net cost
– 2001 Reliance Insurance Co / $2,265,845,612 / $1,415,385,230 / $850,460,383
– 2002 Legion Insurance Co / 1,272,694,066 / 227,503,349 / 1,045,190,717
– 2000 California Compensation Insurance Co / 1,049,745,420 / 327,756,089 / 721,989,331
– 2000 Fremont Indemnity Insurance Co / 843,405,746 / 643,377,434 / 200,028,312
– 2001 PHICO Insurance Co / 699,420,144 / 205,770,569 / 493,649,574
– 1985 Transit Casualty Insurance Co / 566,549,902 / 379,499,906 / 187,049,996
– 2000 Superior National Insurance Co / 555,797,035 / 174,168,193 / 381,628,842
– 1988 American Mutual Liability Insurance Co / 543,085,140 / 238,199,539 / 304,885,602
– 1986 Midland Insurance Co / 531,641,477 / 50,648,348 / 480,993,129
– 2006 Southern Family Insurance Co / 516,844,804 / 246,101,399 / 270,743,405
Cavalcade of Risk, health care reform, bankrupt insurers, guns at work and more
Thursday, November 20th, 2008Joe Paduda is hosting the post-election edition of Cavalcade of Risk. Dedicated blogger that he is, his post comes to us from Las Vegas, where he offers observations from the floor of the National Workers Comp and Disability Conference. Joe has been a roving workers comp reporter lately. His recent trip follows on the heels of his reports from the Workers Compensation Research Institute Annual Meeting, where he offered his analysis of the best presentation, along with other posts from the conference that you might want to read.
Health care reform – The health care bloggers and pundits are weighing on on the announcement that Tom Daschle has been named as Health and Human Services Secretary. Ezra Klein says that he was picked because he has the skill set to get health care plan through Congress; Jonathon Cohn talks about his likely approach, and Bob Laszewski of Health Care Policy and Marketplace Review offers his thoughts on the Daschle pick. And for those who are still on the fence about the necessity of health care reform, Sarah Rubenstein of the WSJ Health Blog reports that under PPOs, the the most common type of insurance offered by employers, health care deductibles doubled to $1,000 in 2008, according to a recent survey by Mercer.
When insurers bite the dust – What happens to workers compensation claims when an insurance company goes bankrupt? Ronald Ryan of Michigan Workers’ Compensation Law blog discusses how this situation is handled in Michigan. State laws differ. Questions about bankrupt insurers are weighing heavily on the minds of employers and claimants lately. We’ve talked about what happens in the case of insurer insolvencies before, as well as employer bankruptcies and comp. The Insurance Information Institute provides an excellent overview of insurer insolvencies and state Guaranty Funds – a page you might want to bookmark, given the times.
Guns at work – While there likely won’t be a decision until next year, the NRA and Oklahoma employers squared off yesterday in federal appeals court in Denver on the issue of guns at work in Oklahoma. These types of laws pit the rights of gun owners against the rights of private property owners – in this case, employers – to control their own property. The Oklahoma law forbid employers the right to bar employees from keeping guns in locked cars on their property, but a district court issued a permanent injunction against the law’s enforcement on the basis that the law was preempted by employer obligations to maintain a safe workplace under the Occupational Safety and Health Act. Michael Fox of Jottings By an Employer’s Lawyer discusses yesterday’s court proceeding. He sees the potential for the law of unintended consequences to come into play in relation to the interpretation of the General Duty Clause of the Occupational Safety and Health Act, which could increase exposure to OSHA violations for other employers. For more, see our background on this case as the issue evolved.
Safety sensitive employees – When it comes to safety, can you require physicals of all employees? Attorney Lindsay Harris offers tips on periodic medical exams for safety-sensitive positions
Insurer insolvencies, guaranty funds, and joint and several liabilities between temp staffing agencies & contracting employers
Monday, October 25th, 2004Roberto Ceniceros of Businss Insurance points to a recent interesting decision by California’s 2nd District Court of Appeals in Los Angeles dealing with general and special employers. The case involved a claim by an employee of RemedyTemp, a temporary staffing firm, considered the general employer; the employee was injured while on assignment at Jacuzzi Inc, the contracting or special employer. Normally, Remedy Temp’s insurer would be responsible for the claim, but in this case, the insurer – Reliance – was in liquidation. The court found that Jacuzzi – not the California Insurance Guarantee Association (CIGA) – was responsible for the claim.
There are several interesting issues involved in this case, perhaps more than can be easily addressed in one post, but we’ll give it a try. The whole issue of “general” vs. “special” employers is one facet worth discussing. But by way of laying groundwork, let’s first look at the issue of employee protection when an insurer goes belly up. Sadly, this is not an uncommon scenario in recent times. In the first quarter of 2004, NAIC recorded 20 property casualty insurer insolvencies.
In this case, the original insurer, Reliance National, went into liquidation. While remedies vary state to state, most jurisdictions have an established state guaranty fund as an insurer of last resort to ensure outstanding workers comp claims are paid. A guaranty fund is usually funded through assessments of a state’s licensed insurers. If an insurer fails and a claim is pending, the guaranty fund generally pays the claim and seeks recovery through litigation. Generally, guaranty funds leave no stone unturned in an effort to exhaust any other available insurance .
This is a simplistic summary of a much more complex issue. The Insurance Information Institute (III) has an excellent overview on the issue of insurer insolvencies and state guaranty funds that is well worth a read. Just look at how the Reliance insolvency affected Pennsylvania and the tsunami effect it had on other states:
The Pennsylvania Insurance Department is seeking to recover hundreds of millions of dollars from former executives of the bankrupt Reliance Global Holdings and its insolvent subsidiary Reliance Insurance Company and also from companies that the department says owe the company money. Reliance has only about $5.9 billion in assets, which are being disbursed rapidly because the company has to pay claims as well as the salaries of administrative staff and law firms that keep the firm running until the liquidation process is complete. The company has 144,000 claims amounting to $8.7 billion, almost twice as many claims as expected. Every state has been affected by the insolvency, but those most severely impacted are California, New York and Texas. At the time Reliance was declared insolvent it had 187,000 unsettled claims. In a lawsuit filed in June 2002 in Philadelphia, the insurance commissioner blamed the company’s executives for the failure, charging them with draining cash from the company to support their “lavish lifestyle.” Reliance Insurance Company, established in 1817, is the largest insurance company to be liquidated in U.S. history.
Guaranty funds have been severely challenged by the flood of insolvencies in recent years. For example, III says that in California, where may insolvencies have occurred, the Guaranty Fund faced a more than $750 million shortfall, no small part of the recent crisis.
In the case at hand, Mark Micelli v. Jacuzzi, Inc., Remedy Temp, Inc., American Home Insurance Co., Reliance National Indemnity Co., and California Insurance Guaranty Association (PDF), the court reaffirmed the idea of CIGA as an “insurer of last resort,” and found that joint and several liability existed between Remedy Temp and Jacuzzi, and that Jacuzzi’s workers comp insurer, American Home Assurance, qualifies as “other available insurance.”
The implication for temp staffing agencies remains to be seen. According to Ceniceros’ report:
The appeals court ruling could cause customer dissatisfaction for RemedyTemp and “could affect thousands of companies that, in part, rely on temporary staffing to avoid the costly overhead associated with carrying additional workers compensation insurance,” RemedyTemp said in a statement.
