Tag: Workers Comp

It takes seven years to close 90% of workers compensation claims in California compared with three years for the median state, according to a study released Tuesday by the Workers’ Compensation Insurance Rating Bureau.

WCIRB attributes the longer time it takes to close California claims to several “duration drivers.” These include ​a higher share of permanent partial disability claims and cumulative trauma claims in the state, greater utilization of medical-legal services and regional differences within the state.

The study also found that 13% of indemnity claims are open at 60 months — more than twice the median of 5% in states across the country, and the proportion open at 36 months in California is more than three times the median.

It also takes longer to report and recognize indemnity claims in California. After one year, 22% of California indemnity claims are unreported, which is double the median across the country. Late-reported claims typically close more slowly, and many involve cumulative trauma injury, WCRIB found.

Cumulative trauma claims involve longer-term, multiple medical issues. At first report level, the settlement rate for cumulative indemnity claims averaged below 15% between 2006 to 2011, compared with around 40% for non-cumulative trauma claims.

Although claim settlement rates have been shortening since 2011, the gap between cumulative trauma claims and others remains, with about 20% of cumulative trauma claims on average settled at first report level since 2017 compared with around 50% for all other claims. 

Another key factor in the higher costs, permanent partial disability claims in California were found to be more complex, more frequently litigated and typically to have longer duration than claims with only temporary disability benefits. The frequency of PPD claims per 100,000 employees in California is 2.5 times the nationwide median, the study found.

Claim duration improved “significantly” following the implementation of S.B. 863, which made significant changes to the state’s comp system starting in 2013, with indemnity claims closing 50% faster in 2019 than in 2012. Claim duration declined significantly in 2020 during the pandemic and economic slowdown but has since plateaued.

 

 

The Ohio Supreme Court ruled that the arbitration provision of a labor union’s collective bargaining agreement did not bar an injured member from pursuing an intentional tort claim against his employer.

Steven Sinley worked in the maintenance department for Superior Dairy Inc. In 2019, he suffered a severe injury to his right hand while attempting to repair a malfunctioning grinder machine. The accident resulted in the loss of four fingers, according to Sinley v. Safety Controls Technology Inc., filed Nov. 23.

Mr. Sinley sued his employer, along with other parties, claiming that Superior had removed the electronic safety mechanism on the grinder that would have shut off its power whenever it was disassembled and alleged that he was not warned by his supervisor that certain safety procedures had not been implemented on the machine, and he alleged that his supervisor “intentionally and without warning activated the machine” while he was working on it.

Superior responded that its maintenance employees are members of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America Local No. 92. The union had a collective bargaining agreement in place at the time of Mr. Sinley’s injury requiring arbitration of grievances against Superior.

Superior argued that as a member of the union, Mr. Sinley had agreed to use the grievance and arbitration procedure set forth in the agreement as the sole and exclusive means of settling any alleged violation of any employment-related law or statute.

A trial judge denied Superior’s motion to stay proceedings and compel arbitration, without opinion. The Court of Appeals for the 8th District of Ohio affirmed, finding the CBA had to contain a “clear and unmistakable” waiver to bar a union member’s statutory claim against an employer in a judicial forum, and such language was lacking.

The Ohio Supreme Court agreed, explaining that arbitration is generally favored in most contracts, but there is no presumption of arbitrability of an employee’s claims under an arbitration clause in a collective bargaining agreement.

The court also said Mr. Sinley’s intentional tort claim did not fall within the scope of the arbitration provision in the CBA as it “is silent as to intentional torts by the employer, and we cannot infer that the parties intended to include such claims in a general ‘without limitation’ clause.”

WorkCompCentral is a sister publication of Business Insurance. More stories here.

 

The Arizona Supreme Court upheld an insurance company’s denial of an industrial injury claim filed by a Tucson police officer who suffered from post-traumatic stress disorder.

The patrol officer began training with the Tucson Police Department in 2000 after passing the necessary pre-employment physical and psychological examinations. In 2009, he responded to an accident in which another officer was killed, according to No. CV-21-0192-PR.

The officer told his supervisor that the incident negatively affected him. He was sent to a psychiatrist, but the incident was never reported as an industrial accident for workers compensation purposes. He continued to receive mental health care over the years that followed.

In 2018, the officer responded to a domestic violence scene that involved a suicide. After this incident, he began having nightmares, flashbacks and difficulty concentrating on the job. His treating psychiatrist and the City of Tucson’s doctor both recommended he be relieved from his work duties.

The officer filed an industrial injury claim arising from the 2018 incident, claiming it exacerbated his preexisting post-traumatic stress disorder. The city’s insurer, Tristar Risk Management, denied the claim.

An administrative law judge upheld the denial, finding the claims for mental injuries noncompensable because the 2018 incident was not an “unexpected, unusual or extraordinary stress” situation as required under Arizona law.

In a divided opinion, the court of appeals affirmed the denial of benefits.

The Arizona Supreme Court agreed, writing that it has never determined whether the state Constitution provides workers compensation for mental stress injuries, that the “relevant case law is circuitous and contradictory” and that the “constitutional definition of injury by accident necessarily entails an unexpected event.”

One justice dissented in part, writing that a covered worker who incurs a mental injury from an on-the-job accident caused at least partially by “a necessary risk or danger” of the employment or the failure of the employer to  “exercise due care” or follow an employment law is constitutionally entitled to workers compensation.

WorkCompCentral is a sister publication of Business Insurance. More stories here.

 

 

 

A U.S. appeals court on Wednesday ruled that lawsuits filed by the family of a worker killed and two workers who were injured in a chemical accident can proceed, reversing an earlier ruling that barred the lawsuit over exclusive remedy. 

In December 2016, Alton Zeigler, Jacob Jackson and Kevin Vann — maintenance employees of DAK Americas LLC — attempted to remove a faulty pump on a chemical production line in Calhoun County, South Carolina, and owned by Eastman Chemical Co., which contracted work with DAK, which then contracted with another maintenance company, Mundy Maintenance Service and Operations LLC.

While attempting to remove a chemical pump without draining it first, the three workers loosened the bolts securing the pump, an explosion erupted in which molten liquid killed Mr. Zeigler and severely burned Mr. Jackson and Mr. Vann.

In April 2017, the two workers and a surviving spouse filed separate personal injury actions against Eastman and Mundy in federal district court, alleging that Eastman’s employees “were negligent in their management of the retained line, and that Mundy’s employees were negligent in their attempt to unclog the drainpipe prior to the explosion,” according to case No. 19-1643, consolidated by the 4th U.S. District Court of Appeals.

Eastman moved to dismiss the suits, contending that the contractors qualified as Eastman’s “statutory employees” under the South Carolina Workers’ Compensation Law and that workers compensation was their exclusive remedy, and that the courts lacked jurisdiction to hear their claims. The district court agreed and dismissed the lawsuits.

The appeals court reversed, applying relatively new case law: a 2019 decision of South Carolina’s Supreme Court in Keene v. CNA Holdings LLC, which clarified that “when an employer makes a ‘legitimate business decision’ to outsource a portion of its work, the contractors it hires to perform that work are not ‘statutory employees’ for workers compensation purposes,” according to the appeals court.

“No party here contests that Eastman’s outsourcing of its maintenance and repair work was a ‘legitimate business decision,’” the court wrote. “It follows that the plaintiffs, independent contractors performing maintenance at the time of the 2016 pump explosion, were not statutory employees and may bring personal injury actions. Accordingly, we reverse the district court’s judgment dismissing the actions for lack of subject matter jurisdiction and remand for further proceedings.”

 

 

 

Occupational Safety and Health Administration investigators again cited a Schaumburg, Illinois-based excavating contractor for failure to follow federally mandated safety measures to protect workers from potentially deadly trench cave-ins.

Trench collapses are among the construction industry’s most lethal hazards and a recent focus of OSHA.

OSHA reported that an inspector in June observed two employees of A. Lamp Concrete Contractors Inc. in a 7-foot-deep trench in Broadview, Illinois, working on municipal sewer and water lines without adequate cave-in protection or safe ways to get in and out of the trench.

Following its investigation, OSHA cited the company for three repeat, one serious and one other-than-serious violations of federal trenching and excavation standards, and proposed penalties of $118,962. The agency cited A. Lamp Concrete in 2018 and 2021 for exposing workers to cave-in hazards.

The company has 15 days to contest the citation.

 

Workers misclassified as independent contractors, reductions in benefits, and states looking to make workers compensation protections optional for employers are three “troubling” trends for the insurance industry, a U.S. Department of Labor official wrote in a recent blog post on the agency’s website. 

Christopher Godfrey, director of the DOL’s Office of Workers’ Compensation Programs and a member of the Study Panel on Workers’ Compensation Data at the National Academy of Social Insurance, wrote that the number of U.S. workers covered by workers compensation has decreased, which is partially attributed to workers misclassified as independent contractors who “continue to lack the economic security” of workplace protections.

Another issue, Mr. Godfrey wrote in the Nov. 18 post, is that states are paying fewer total benefits to injured workers.

“From 2016–2020, total benefits paid to injured workers decreased in 40 states,” he wrote, adding that COVID-19 “was a big factor in this decline, but total benefits paid was already decreasing in 21 states pre-pandemic.”

He described declining benefits as a decades-long trend stemming from several factors, including changes to state workers compensation laws and policies. “Today, there are considerable cross-state differences in benefits for injured workers,” he wrote.

Another trend is that some states are considering ways to make workers compensation optional.

South Dakota, Texas and Wyoming have already made workers compensation fully or partially optional for at least some occupations, he wrote, adding that “in the last decade, legislative proposals in Arkansas, Oklahoma, South Carolina and Tennessee proposed alternative workers compensation schemes or options for employers to opt out” of coverage for workers.

 

 

 

New Jersey maintained its spot as the most expensive state for purchasing workers compensation coverage in the latest biennial rate ranking by the Oregon Department of Consumer and Business Services.

And while the top half of the list included perennials such as California, New York and Hawaii, Wyoming joined the top 10 following a more than 29% increase in average costs this year.

Average premiums of $2.44 per $100 of payroll in New Jersey were 192% of the study median — $1.27 per $100 of payroll in Pennsylvania. New Jersey topped the last study, in 2020, with average costs of $2.52.

Hawaii, which ranked fifth in 2020, jumped to second place this year, with average premiums of $2.27. California rose from fourth in 2020 to third this year, with average costs of $2.26. New York dropped two spots to fourth, with average costs of $2.15. Louisiana, which ranked eighth in 2020, rounded out the top five this year, with average costs of $2.13.

Wyoming was ranked the seventh most expensive state this year with average premiums of $1.86. In 2020, it ranked 26th, with average costs of $1.44.

DCBS said the national median index rate of $1.27 per $100 of payroll marked the lowest value since it started conducting the national rate comparisons in 1986. In the first year of the study, the national median index rate was $3.18, and by 1994 it had increased to $4.35.

WorkCompCentral is a sister publication of Business Insurance. More stories here.

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