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.