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Update: What’s New in Workers Compensation?

Posted on: March 17, 2014 by Caitlin Morgan

Workers Compensation

Update: What’s New in Workers Compensation?

Caitlin Morgan offers several Workers Compensation solutions, including guaranteed-cost programs, large-deductible programs, self-insurance options, and captive programs for all-size businesses. As such, we like to keep our agents and brokers updated on current Workers Compensation-related issues taking place throughout the country. In this article, we touch upon some of the topics, proposals, and legislation taking effect in New York, Connecticut, Ohio and Oklahoma.

A study on the effects of New York’s Labor Law 240 (“scaffold law”) made headlines recently and has given weight to those wanting to reform the 100-plus-year-old law. The study conducted by both the University at Albany and Cornell University indicates that an additional 677 work-place accidents per year occur because of the law. It also shows that additional injuries associated with the scaffold law cost the state between $34 million and $84.7 million in Workers Compensation costs, and between $26 million and $65.1 million in direct, indirect, and quality-of-life costs, annually. What’s more, the effect of the scaffold law on the private sector is estimated at $1.487 billion per year, which takes into account associated legal costs, Workers Compensation payments, medical costs, and other expenses. New York’s scaffold law imposes liability on property owners and contractors for employee injuries that fall within the parameters of the law. It applies to gravity-related injuries caused by falls from an elevation (scaffolding) or resulting from being struck by falling objects. Therefore, unlike all other states where workers compensation is the only remedy for a construction worker injured on the job, in New York an injured employee can sue a project owner or general contractor under the provisions of the Labor Law. Many businesses, contractors, and local governments are calling for reforms to the scaffold law and in February went to the Capitol in Albany to lobby lawmakers.

In Connecticut, in the wake of the Sandy Hook Elementary School shooting in which 20 children and 6 adults were killed, lawmakers last year proposed that the state’s Workers Compensation law be expanded to cover employees who’ve suffered an emotional or mental impairment after witnessing a traumatic death or maiming while on the job. The proposal was rejected and instead lawmakers created a private charitable fund to help cover unreimbursed mental health-related costs of the workers affected by the shooting. However, the funding was not enough and now more than a year later several lawmakers have once again resurrected the proposal. The proposal is being met with resistance, citing that such legislation would result in significant costs on cities and town. According to an article by the Associated Press, the Connecticut Conference of Municipalities (CM) said the bill would allow any municipal employee, such as a paramedic or public works crew member, whether on-duty or not, to arrive at a crime scene several hours after a scene was secured and be eligible for full wage replacement benefits under the Workers Compensation system. “The administrative and legal costs just to manage the claims filed for this new mandate – let alone fully fund such benefits – could be catastrophic for many communities,” CM said in written testimony submitted to the legislative committee.

In Ohio, which is one of only a handful of states with a government-run Workers Compensation program, Lt. Governor Mary Taylor and Ohio Bureau of Workers’ Compensation Administrator Steve Buehrer were asked at a business roundtable last month whether it’s time for the state to privatize Workers Comp. The issue of privatization came up before with then-gubernatorial candidate John Kasich who looked at privatization before voters elected him. According to the Ohio Daily Register, which reported on this roundtable discussion, Lt. Governor Taylor said, “the policy team’s goal was indeed to privatize Workers Compensation but there were many obstacles to overcome, including having to amend the state constitution”. She acknowledged that the measure likely would pass the state Legislature, but it would end up on the ballot. “It’s going to be challenged,” Taylor said. The issue has been on the ballot before, and it was overturned handily, she added. (Ohio voters rejected privatization twice; the last time was in 1970.)

As we discussed in a previous blog, Oklahoma last year passed legislation that would allow employers to implement an alternative to the state’s traditional Workers Compensation system. As of February 1, 2014, Oklahoma’s new alternative, the “Oklahoma Option”, went into effect, allowing both private and governmental entities, including businesses contracting with the government, to opt out of the system. Employers that opt for an alternative must provide benefits at least equal to those mandated in the existing state-operated system, but do have extraordinary discretion in designing benefits and managing claims. Additionally, employers that opt-out are protected against liability claims by injured employees.

If you would like to know more about Caitlin Morgan and the Workers Compensation programs we offer, please contact us at: 877.226.1027.

Sources: New York Civil Justice Institute, Associated Press, Ohio Daily Register

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Posted in: Workers Comp Workers Compensation