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Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Wednesday, January 30th, 2013

Analysis: New Republican-backed bills would cut injured workers’ benefits

Last week all pre­tense of bipar­ti­san­ship in State Sen­a­tor Rod­ney Tom’s new coali­tion was aban­doned with its intro­duc­tion of five anti-labor bills pur­pose­ly intend­ed to weak­en work­er’s com­pen­sa­tion. The new cau­cus formed by Sen­a­tors Tom and Shel­don and the Repub­li­cans is try­ing to rush these bills through to pas­sage. A floor vote is expect­ed in the near future.

We at NPI urge you to call and write your state leg­is­la­tors (espe­cial­ly your state sen­a­tor) and let them know that you oppose these bills.

Q: What is work­er’s com­pen­sa­tion?

A: Work­ers who are injured on the job are some­times sud­den­ly deprived of the abil­i­ty to sup­port them­selves and their fam­i­lies. Work­er’s com­pen­sa­tion is a legal­ly man­dat­ed insur­ance ben­e­fit that guar­an­tees dis­abil­i­ty insur­ance for wages, med­ical expens­es and voca­tion­al reha­bil­i­ta­tion. For some injuries this is tem­po­rary. Some injuries result in per­ma­nent dis­abil­i­ty. In the case of work­place fatal­i­ties, the sur­viv­ing spouse and chil­dren receive the pen­sion; the image of the wid­ow and chil­dren of a slain police offi­cer not becom­ing home­less applies here.

The agree­ment is that the employ­ee does not sue the employ­er. And, in return, the employ­er pays the insur­ance pre­mi­ums into the sys­tem. Work­ers who take steps to increase safe­ty may par­tic­i­pate in a “ret­ro­spec­tive” or “retro” pro­gram offered by the Depart­ment of Labor & Indus­tries in which they pay low­er pre­mi­ums.

Q: It’s 2013. Aren’t work­place injuries a thing of the past?

A: Some occu­pa­tions, such as police offi­cer or fire­fight­er, have known risks. Unfor­tu­nate­ly, in occu­pa­tions such as farm­ing, man­u­fac­tur­ing or log­ging, not all employ­ers have a safe­ty cul­ture or strive to earn a safe­ty cer­ti­fi­ca­tion from a stan­dards orga­ni­za­tion.

In 2011, more than a hun­dred peo­ple died from work­place injuries. More than twen­ty-five per­cent of the cost of work­er’s com­pen­sa­tion aris­es from overex­er­tion. Peo­ple feel pres­sured to work beyond the lim­its of their phys­i­cal capa­bil­i­ties.

The cost of work­ers com­pen­sa­tion could be low­er if more employ­ers fos­tered a strong safe­ty cul­ture. But instead of cut­ting costs by pre­vent­ing injuries, this set of bills cuts the ben­e­fits paid to the work­ers.

Q: Wasn’t work­er’s com­pen­sa­tion just revised in 2011?

A: Yes. With Sen­ate Bill 5566 the guar­an­tee of a pen­sion was mod­i­fied and a cash set­tle­ment option was allowed. The set­tle­ment option was opposed by orga­nized labor because a cash pay­ment might be far less than the val­ue of a pen­sion. Remem­ber that the injured work­er has not yet been paid for the time lost and may feel pres­sured to set­tle in order to pay mount­ing bills. The set­tle­ment mon­ey can go to cred­i­tors, then leav­ing the work­er in the care of the social ser­vices sys­tem, fund­ed by the tax­pay­er instead of the employ­ers’ insur­ance pre­mi­ums. SB 5566 pro­vid­ed some pro­tec­tions to make sure the work­ers under­stood the terms of the set­tle­ment. But some work­ers could be sub­ject to shod­dy legal rep­re­sen­ta­tion.

One of the argu­ments against the new bills is that the recent changes have not had time to be eval­u­at­ed.

Q: How do the new bills affect injured work­ers?

A: Here is a bill-by-bill analy­sis. Note  that SB stands for Sen­ate Bill. The cor­re­spond­ing House bill has the pre­fix HB.

SB 5124 / HB 1464

Under the cur­rent sys­tem, the amount of a worker’s month­ly ben­e­fit is based on both wages and med­ical ben­e­fits. Under 5124 the med­ical ben­e­fits are exclud­ed in deter­min­ing the amount of the pen­sion. This could reduce the amount paid to the work­er by as much as forty to six­ty per­cent.

SB 5126 / HB 1465

This bill under­mines the def­i­n­i­tion of work­ers com­pen­sa­tion as an assured ben­e­fit work­ers can rely on inde­pen­dent of any oth­er pro­ceed­ings. Under 5126 the state can recov­er some of the dam­ages if the injured work­er sues a third par­ty, such as an equip­ment man­u­fac­tur­er. This could intim­i­date some work­ers into not tak­ing work­ers com­pen­sa­tion in order to receive all of a third par­ty set­tle­ment. Any oth­er set­tle­ments are no longer inde­pen­dent awards to the work­er.

SB 5127 / HB 1097

5566 allowed struc­tured set­tle­ments for work­ers age fifty-five and over, with the age drop­ping to fifty-three in 2013 and to fifty in 2016. Under 5127, there would be no age restric­tions on who could receive a lump sum set­tle­ment.

A work­er age fifty-five may have a good esti­mate of his or her med­ical con­di­tions and expens­es from the injury until retire­ment. In con­trast, a work­er age thir­ty can­not pre­dict how the injury will affect future health. A work­er with a severe injury at the age of thir­ty could sud­den­ly lose the abil­i­ty to walk at the age of fifty. The set­tle­ment could be insuf­fi­cient to cov­er the effects of the injury at a future time.

A cash set­tle­ment can be spent quick­ly or could be tak­en by cred­i­tors. Then the injured work­er is thrown back onto the social ser­vices sys­tem, paid for by the tax­pay­er rather than by the employ­ers.

SB 5128 / HB 1463

Under the cur­rent law, all lump sum agree­ments nego­ti­at­ed between the work­er and the employ­er must be approved by the Board of Indus­tri­al Insur­ance Appeals (BIIA). Before the final approval a set­tle­ment offi­cer must explain the terms of the agree­ment to the work­er and ensure that the work­er under­stand the agree­ment. Under 5128 if the work­er has been rep­re­sent­ed by an attor­ney, the con­fer­ence is not required. This removes the pro­tec­tion for a work­er who may have had shod­dy or uneth­i­cal legal rep­re­sen­ta­tion.

Under the cur­rent law a set­tle­ment cov­ers all antic­i­pat­ed expens­es with the excep­tion of med­ical care, which can be rene­go­ti­at­ed. Sec­tions 1.(1)(a)(i) and 1.(7) com­pro­mise this and imply that a set­tle­ment could include med­ical expens­es and pre­vent future lia­bil­i­ties if a med­ical con­di­tion wors­ens.

Anoth­er part of this law applies to the work­er who has an injury that is not per­ma­nent­ly dis­abling, receives a set­tle­ment and returns to work after reha­bil­i­ta­tion. If the work­er suf­fers a sub­se­quent injury, the ini­tial injury could be declared a pre-exist­ing con­di­tion caus­ing the recent dis­abil­i­ty. In this sit­u­a­tion the work­er could not file a new claim. So if a person’s knee is hurt in the first injury, future injuries to the knee might not be cov­ered.

This bill also requires the expen­di­ture of mon­ey for out­side con­sult­ing firms to do a study of the sys­tem every few years, includ­ing a com­par­i­son with oth­er states. This implies that instead of being a leader, the state is being cau­tioned make sure it is not more pro­gres­sive than oth­er states.

SB 5112 / HB 1313

This bill applies to employ­ers in the “retro” or safe­ty pro­gram. Under 5112, they are grant­ed a new right to require an injured work­er to come in for a new med­ical eval­u­a­tion as often as twice per year.

The employ­er has the right to choose the doc­tor or nurse doing the eval­u­a­tion as long as the prac­ti­tion­er is on the approved provider list. This makes it eas­i­er to chal­lenge the injured work­ers paid leave sta­tus. It places the deci­sion in the hands of the employer’s med­ical provider rather than the patient’s own doc­tor.

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