Notable Workers’ Compensation and Employee Health Issues to Watch in 2019

By Roger Rabb, J.D.

A recent webinar highlights some key issues to monitor in the new year

In a recent webinar, workers’ compensation advocates Kimberly George and Mark Walls identified some notable issues to watch in 2019 in the related areas of workers’ compensation and employee health care benefits. While a detailed discussion of all, or even any, of their highlighted topics is beyond the scope of this overview, below is a quick look at some of the topics they highlighted.

Health Care Costs

One broad topic George and Walls identify is health care costs and attempts to get them under control. They note that while cost trends are down from where they were a decade ago, current trends are still “at unsustainable levels.” They specifically identify the cost of prescription drugs as a priority, noting support in Washington for such tactics as increasing less-expensive generic drug options, as well as negotiating lower Medicare drug prices and requiring pharmacy rebates to be passed on to seniors. They also expect an increase in investment in personal technology options designed to bring costs down, for example, an increase in the availability of apps and similar tech addressing well-being and chronic care by health insurers and providers.

Legislative Challenges

George and Walls also identify topics to watch in the state legislative arena regarding workers’ compensation. They note that the 2018 elections resulted in 8 governorships changing parties, with the Democratic Party now having control of the governorship and both legislative houses in six new states, including Colorado, Illinois, Maine, Nevada, New Mexico, and New York, while the Republican Party achieved a similar gain in Alaska. This “trifecta” can, of course, make it easier to pass a specific legislative agenda in that state, making those states ripe for potential workers’ compensation legislation.

They also identify a few specific issues that may arise in some states. For example, the California Legislature in recent years has passed bills that would have eroded earlier legislative reform packages designed to reduce employer workers’ compensation costs. While both Governors Brown and Schwarzenegger vetoed these bills, it is unknown whether Governor Newsom is as committed to keeping down employer costs. What is known about Governor Newsom, however, is that he places a high priority on providing universal health care to California residents, although it is not known whether any such program, if passed, would include care for worker injuries that would supplant health care provided under workers’ compensation.

George and Walls also identify legislative battles brewing in several southern states. In Alabama, a judge in 2017 held that the workers’ compensation statute was unconstitutional due to caps on weekly benefits and attorneys fees, and although that case settled on appeal, a bipartisan task force has been working on reforms to address these issues, with recommendations including increases in indemnity benefits and attorney fees offset by such changes as a cap on indemnity benefits at 500 weeks and a statute of limitations on medical treatment. Similarly, in Mississippi, the governor is apparently considering reforms that would end lifetime medical treatment in workers’ compensation claims, although others are cautioning that such a change would invite a constitutional challenge to their workers’ compensation statutes. In Florida, a 2016 court decision held the state’s attorney fee cap unconstitutional and the state Legislature continues to try to craft an acceptable bill to resolve this issue.

In addition to these state legislative battles, they identify one federal issue to watch—the interplay between Social Security Disability payments and state workers’ compensation benefits for the same injury. Fifteen states currently allow state workers’ compensation benefits to be reduced if the injured worker is also receiving Social Security Disability benefits. In all other states, Social Security gets the reduction, and George and Walls suspect that Congress might make that the law of the land due to the growing importance of finding ways to keep the Social Security fund solvent.

Another identified issue to watch, one that is also related to the political issues and reform efforts facing state legislatures, is the adoption and impact of the 6th Edition of the AMA Guides to the Evaluation of Permanent Impairment released in 2009. George and Walls note that under earlier versions of the Guide, impairment was based on the injury diagnosis, while under this newest edition, impairment is limited to measurable impairment alone, resulting in some impairment ratings that are lower than would have been the case under earlier editions. This change has resulted in litigation challenging the use of the 6th Edition, and in 2018, for example, the Kansas Supreme Court held that use of this edition was unconstitutional in certain circumstances. In response, the new governor of Kansas has endorsed rolling back to an earlier version of the AMA Guides. George and Walls suggest that this issue is largely a political question that each state must answer: is the purpose of impairment guidelines to provide a measurement of objective physical impairment, or is the purpose to provide an income benefits award that considers more than just objective impairment?

Additional Issues

Some other topics George and Walls identified to watch in 2019 include:

• Efforts to address the “social determinants of health,” which can include socioeconomic status, education, literacy, access to healthy foods and health care, and a safe social and physical environment. They note that “vulnerable communities are at the greatest risk for medical conditions and disease in part due to the social determinants of health such as poor housing conditions and transportation, lack of exercise and nutrition and safe streets, unemployment and limited education.”
• The economy’s impact on workers’ compensation, given low unemployment rates and increases in wages, even if this just means an increase in the minimum wage. They note that higher payroll could lead to higher workers’ compensation premiums, and higher employment may mean more workers who are not adequately trained or not in good physical condition.
• The use of different employee health benefit models to attract and retain employees. George and Walls note the increasing use of such models as direct primary care, where doctors charge a monthly membership fee instead of accepting insurance; employer provision of on-site medical clinics; the use of “concierge” level customer service programs to assist employees in engaging effectively with their benefits; and the provision of telemedicine options.
• The increase in claim size and in “mega claims,” that is, claims valued at $5,000,000 or more. They attribute this increase to higher rates of accident survivability, an increase in the number of automobile accidents, and expensive medical advancements.
• The impact of legal marijuana on employers and the workforce. George and Walls note that 10 states and the District of Columbia have legalized recreational marijuana use, with more states considering it in 2019, and 33 states allow for the use of medical marijuana. While noting that legalization of marijuana is becoming more attractive to state legislatures as a way to increase tax revenues, they caution that legalization increases the chances that workers are coming to work under the influence of marijuana, although there is no widely accepted test to determine if someone is impaired from marijuana use. They predict that treatment of marijuana in the workplace is likely to change, with changes ranging from excluding the drug from drug-free workplace laws to repealing workers’ compensation benefit reductions or exclusions if the employee tests positive for marijuana.
• Workplace violence is also identified as an area to watch. George and Walls specifically note the higher rates of workplace violence among healthcare workers, teachers (especially in special education), and in retail, with the latter employees being increasingly victimized by shoplifting violence.

George and Walls identify very briefly several other issues to watch, such as emerging challenges from globalization, the “sharing” economy, and the “gig” economy, as well as the potential impact of increasingly-dangerous natural disasters on risk management. Interested readers should listen to it here: https://goto.webcasts.com/starthere.jsp?ei=1223284&tp_key=e154c7066b.

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