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NORTHWEST LABOR PRESS | April 17, 2015 | PAGE 13 ...Workers’ comp benefits vary by state From Page 1 presently is, in general, inade- quate and inequitable.” Many states did make im- provements. But a wave of cut- backs began in the 1990s, swelled in the mid-2000s, and picked up again after the 2008 recession. The U.S. Labor De- partment used to keep track of how states complied with the presidential commission’s rec- ommendations, but stopped in 2004. A few days after ProPublica and NPR published their inves- tigation, the U.S. Occupational Safety and Health Administra- tion (OSHA) released its own report, entitled “Adding In- equality to Injury: The Costs of Failing to Protect Workers on the Job.” The OSHA report says employers are increasingly us- ing temporary workers, and misclassifying wage employees as independent contractors— both of which are increasing the risk of injury and adding to the number of workers facing finan- cial hardships because of work- place injuries. When employers classify workers as “indepen- dent contractors,” they don’t pay workers’ compensation in- surance. The OSHA report says that reduces their incentive to take responsibility for safe working conditions, which may result in increased overall risk of workplace injury. The report pointed to two studies in the American Journal of Industrial Medicine, which found that more than half of hospital patients with work-re- lated amputations in Massachu- setts, and a third of those pa- tients in California, didn’t receive workers’ comp benefits. “We’ve seen a devastating strategic combination of em- ployers and insurers, state by state, to gut workers’ comp laws,” says Peg Seminario, workers health expert at the na- tional AFL-CIO. “The system we now have in place in so many states is utterly failing workers, with the result that people are both economically and psychologically devas- tated.” Washington Fending off attacks on the system Like other states in the ProPub- lica report (See Page 1), Wash- ington has seen its workers’ comp premiums fall—from $3.81 for every $100 of wages in 1988 to $2.00 today. David Groves, communica- tions director at the Washington State Labor Council, AFL-CIO, says in part that’s because work- places have gotten safer, and the system has gotten better at re- turning workers to work. “We think we have overall a good system,” Groves said. But in recent years, Republi- can legislators have pushed the same kinds of cuts to workers comp benefits as other states. The union movement has been able to prevent those bills from passing, with one exception. In 2011, in the depths of the recession, the public workers’ comp agency run by the state Bureau of Labor and Industries had lost assets in the financial market downturn, and its re- serve fund was precariously low. Then-governor Christine Gregoire asked lawmakers to pass reforms to save money and build up reserves without rais- ing rates. Organized labor agreed with most of the reforms, but lost a hard fight against one: allowing injured workers to ac- cept lump-sum payments in- stead of monthly benefits. WSLC objected that it would be in workers’ best financial inter- est long-term to get the pay- ments over time, but by the time they were in settlement talks, they’re often desperate and have been out of work for months. WSLC was able to get the vol- untary settlements limited to workers age 50 and over. But ever since then, Republi- can lawmakers and business in- terests have pushed to eliminate that age limit and expand the buyouts, and to cut and cap ben- efits, restrict eligibility, and give employers control over which doctors injured workers use. So far, none of those proposals have passed, but Groves says WSLC has to stay vigilant. And workers’ comp is as po- litical in Washington as else- where: Rob McKenna, 2012 Republican candidate for gover- nor, campaigned to privatize the state workers’ comp system, a proposal voters soundly rejected in an earlier ballot measure. How much is an arm worth? If you suffer a permanent injury on the job, you’re typically entitled to compensation for the damage to your body and your future lost wages. But depending on the state, benefits for the same body part can differ dramatically. Oregon Low premiums, high benefits. How do they do it? Given that workers’ compensa- tion systems are worsening na- tionwide, as documented by a ProPublica report [See related story Page 1], how is Oregon’s system faring? It depends to some extent on who you ask. “We really have not engaged in the kinds of cuts mentioned in the ProPublica investigation,” says Oregon State Sen. Diane Rosenbaum (D-Portland), a workers’ comp expert. Yet Oregon’s workers’ comp premiums have fallen even more than those in other states. Much earlier than other states, Oregon passed controversial legislation to lower workers’ comp premi- ums—in 1990. Since then, Ore- gon workers’ comp premiums have fallen from an average of $4.86 for every $100 in wages in 1988 to $1.37 today. That’s re- markable given that medical costs— which make up over half of what workers’ comp pays for— have only gone up. And unlike other states, Oregon actu- ally increased benefit levels while lowering the premiums. Where have the savings come from? “It’s an oversimplification to say those savings are on the backs of workers,” says attorney Nelson Hall, who’s represented workers in workers’ comp cases since before the 1990 changes. But in one sense, some of the National Average Oregon Washington Arm $169,878 $234,080 $118,266 Leg $153221 $199,491 $118,266 Hand $144,930 $199,491 $106,440 Foot $91,779 $186,187 $82,787 Eye $96,700 $156,920 $47,306 Ear $38,050 $124,991 $15,769 Testicle $27,678 N/A $9,856 savings literally do come on the backs of workers—because back conditions are one of the biggest categories of denied claims: The 1990 law changed the definition of compensable injury. Before, insurers paid claims when the workplace was a “contributing factor” to the injury or illness. Now, the workplace has to be the “major contributing cause,” i.e., at least 51 percent of the prob- lem. As a result, thousands of workers, particularly older work- ers, have had claims denied. They injure their back or a joint on the job, and have initial claims paid, but then get dropped from further benefits when doctors de- termine there was pre-existing deterioration. “One of the classic situations in Oregon is, ‘We’ll accept the back strain, but we’re not going to accept the underlying herni- ated disk,’” says Hall, the attor- ney. “Insurance doctors will line up by the dozen and say some- how miraculously a muscle strain resolves in six to eight weeks…. So if you’re still hav- ing problems after three months, it must not be the muscle strain accepted as work related; it must be some other problem.” John Shilts, head of Oregon’s workers’ comp division, admits some savings have come from the “major contributing cause” change, but says much of Ore- gon’s savings come from a focus on returning workers to work as soon as doctors determine they’re able. Oregon employers get a break on premiums when they bring an injured worker back on light duty while they’re recovering. And when injuries require extended absence from work, new employers get a 50 percent wage subsidy for three months for hiring an injured worker, plus money for special equipment, clothing, and train- ing. Those features save the sys- tem money on wage replace- ment. Oregon also relies on managed care organizations to contain costs. “Doctors today treat workers more like athletes,” Shilts says. Shilts says Oregon also saved money by creating the Manage- ment Labor Advisory Committee (MLAC)—made up only of em- ployer and labor representa- tives—to hash out future policy changes. By custom, the Oregon Legislature won’t consider any reform that hasn’t been approved by MLAC. In theory, that lessens the influence of other vested in- terests, like doctors, lawyers, and insurance companies. But it also means no reform is likely that benefits only workers. And it turns out that the exclusion of doctors and lawyers may have gone too far. There were as many as 400 workers’ comp attorneys defending Oregon workers 25 years ago; today there as few as 70, and it can be hard for an in- jured worker to find representa- tion. Meanwhile, many doctors today refuse to take workers’ comp patients because of the added paperwork. Sen. Rosen- baum, a former member of MLAC, says the Legislature is looking at tweaks increasing at- torney compensation to attract more worker advocates.
