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State, federal election swings may result in legislative shifts favoring employees

Alexandria Ocasio-Cortez

Employee-friendly changes to workers compensation courts and laws could be in store after the Democrats took control of the governorships and legislatures in multiple states, experts say.

Democratic control of the U.S. House of Representatives could help support such efforts at the state level by drawing increased attention to what some believe to be an erosion of benefits for injured workers.

But workplace safety experts do not expect efforts to strengthen federal laws to gain much traction in a divided Congress.

The six states where Democrats now control the governor’s seat and both lawmaking bodies include Colorado, Illinois, Maine, New Mexico, Nevada and New York, according to an analysis by Gallagher Bassett Services Inc.

“My initial reaction was to look at the states where there are new trifectas — where one party now controls (all three governing bodies),” said Mark Walls, Chicago-based vice president of communication and strategic analysis for Safety National, who is also part of the company’s government affairs team. “That’s where (we are) most likely to see something done.”

Illinois is of particular interest, according to experts, as lawmakers in that mostly Democratic state have attempted to introduce employee-friendly workers compensation reforms over the past two years, only to have those attempts vetoed by current Republican Gov. Bruce Rauner. Gov.-elect J. B. Pritzker, a Democrat, once criticized Gov. Rauner for vetoing a comp bill in media interviews, but has not released a plan to act on comp reform.

Meanwhile, less than two weeks after Election Day, the Illinois Senate voted 55-1 to overturn a veto by Gov. Rauner of S.B. 904, a reform measure that aims to amend workers compensation law to allow medical providers to charge insurers interest at a rate of 2% a month when bills are not paid promptly and permit doctors to sue insurers for unpaid bills, among other changes.

“It will be really interesting with (Gov.) Rauner trying to be more business friendly and veto what the Democratic legislature was trying to do,” said Cari Miller, Rolling Meadows, Illinois-based director and counsel for governmental affairs at Gallagher Bassett Services Inc.

Some other examples of reform that were vetoed in Illinois included increased payments for workers and changes to the fee schedule for treatment, she said.

“There is now going to be a lot more employee-favorable changes,” she added.

New York is another state to watch, according to Mr. Walls, referring to recent data that pegged New York as having the highest comp costs.

Specifically, the Oregon Department of Consumer and Business Services in the release of a biennial study in October found that New York’s spend of $3.08 of $100 of payroll represents 181% of the median costs nationwide, which stands at $1.70 per $100 of payroll.

“Usually something like that would make the legislature look at cost drivers, but with Democrats in control I’d be surprised if something happens there” in terms of reform, Mr. Walls said. New York is also noted as having the highest indemnity payments for injured workers countrywide.

Indemnity payments for injured workers increased 9% from 2007 to 2014 in New York because of state reforms launched in 2007, according to a report released in late October by the Cambridge, Massachusetts-based Workers Compensation Research Institute.

That governors in most states appoint workers compensation commissioners and judges is another factor that could cause a shift for injured workers, experts said.

“That could be a change in the lay of the land in the courts,” said Mr. Walls.

A divided Congress

Democrats gained a net of 38 seats as of Nov. 23 in taking control of the House, but Republicans expanded their majority in the U.S. Senate by gaining two seats.

On the safety front, much of the focus at the federal level will be on educating newer lawmakers on occupational health and safety issues, said Jim Thornton, Hampton, Virginia-based vice president of professional affairs for the American Society of Safety Professionals.

“We believe occupational health and safety is without politics (and) our message is the same: making sure people go home safely at night to their families,” he said. “We look forward to working with the incoming change in the (U.S. House of Representatives).”

The U.S. Occupational Safety and Health Administration’s regulatory actions or inaction could draw attention from the House, but the divided Congress makes significant action on workplace safety issues unlikely, experts say.

“There’s no question that the House and the Senate are not going to be of like mind as to how an agency such as (OSHA) should proceed with its agenda,” said James Curtis, a Chicago-based partner in law firm Seyfarth Shaw LLP’s environmental safety and toxic torts practice group.

The Democratic-led House may examine OSHA’s July proposal to amend its electronic record-keeping rule to rescind the requirement for employers to electronically submit information from certain OSHA forms, said Howard Mavity, an Atlanta-based partner in the workplace safety and catastrophe management practice of Fisher & Phillips LLP.

“I think you will see the record-keeping issues get attention” from the House Committee on Education and the Workforce, he said. “I’m not sure they will accomplish anything other than giving the White House a black eye.”

Trickle-down health care

Changes to health care such as further revamping the Affordable Care Act or reintroducing elements of health care reform that were chopped would likely affect access to care, with a trickle-down effect for comp, according to experts.

For example, there may be a tendency to attribute an injury to a workplace accident in cases when a person does not have access to health care through a traditional health care insurance plan, said Brian Allen, Salt Lake City-based vice president of government affairs for Mitchell International Inc., a technology firm that manages pharmacy transactions, among other tasks in workers comp.

“Adequate access outside of comp is important,” he said.

Yet a divided Congress and a Republican administration could hinder any changes to health care, according to Mr. Walls. “You’d like to think both parties will work together… but my gut tells me it’s going to be ugly,” he said.

Regarding other elements of health reform, the Property Casualty Insurers Association of America is more concerned about the continuing shift toward high-deductible plans — a growing trend and a cornerstone in the marketplace — that could affect workers comp, despite the election.

“This trend creates an incentive to shift claims from high-deductible health insurance to no-deductible, no co-pay workers compensation insurance. This trend is likely to continue as long as the cost of medical care and pharmaceuticals continue to rise,” said Robert Gordon, PCI’s Washington-based senior vice president of policy, research and international, in an email.

“As hospitals and other medical providers get squeezed by health reforms, they are under further pressure to raise costs where there aren’t such strong controls,” he said.

Yet, on the flip side, the expansion of Medicaid is another party promise and issue to watch, according to Ms. Miller.

“If Medicaid (subscribers) rise and more people have access to health care, it will affect comp because if more people have more access to health care frequency will level out,” she said.

Two potential changes to medical care offerings across the board are also likely to further affect workers comp: drug pricing and telemedicine, according to experts.

“The drug conversation will be positive, and it may move the needle finally” on pharmaceutical costs, said Mr. Allen. Such changes have garnered bipartisan support in the past, and with recent “cost increases that seem inexplicable,” even in the realm of generic drugs, that could push lawmakers to act, he added.

Expanding Medicare offerings for older Americans in the telemedicine space is another change likely on the forefront, according to Mr. Allen.

Such a move would affect workers compensation, as any expansion into health care conducted over the phone or internet will likely expand into treating injured workers, he said.

Another plus for injured workers could be that the federal government could zero in on what some Democrats nationwide have seen as an “erosion of benefits” under state systems, said Mr. Allen.

Lawmakers at the federal level “could initiate some efforts of discovery as far as figuring out what is happening in the comp space and are we adequately handling comp claims,” Mr. Allen said.

Prompting the conversation could be the latest news that workers comp rates for employers have declined across the states, some to the tune of double-digit decreases, according to experts anticipating more worker-friendly measures across the country.

“In certain states, with rates being down like they are, I wouldn’t be surprised to see a push to increase benefits,” said Mr. Walls. “The conversation I see is rates are down, employers are benefiting. There’s the argument that they could pay more to improve coverages for employees.”

Gloria Gonzalez contributed to this story.




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