Rousmaniere: Trump and Comp

Labor Day 2017, and time to assess the impact of the Trump administration on workers’ compensation.  The topics include Obamacare, OHSA, set-asides, SSDI, worker absence protections, infrastructure, and immigration.

The impact can come in several ways.  The executive branch acts sometimes without Congressional involvement. In other cases, the two arms of government must concur; or Congress can act on its own, barring presidential veto.

It appears that Washington — neither through Congressional legislation nor through executive branch decision — is not going to alter or impair Obamacare in a major way. The law’s impact on workers’ comp, for which there are sharply differing views, will thus likely not change.   But in other ways, Washington has already made its mark.  

The biggest shift in policy, of course, is defanging OSHA.   Under the leadership of David Michaels, OSHA’s longest tenured director from 2009 to January 2017, the worksite safety agency took an increasingly aggressive approach toward employers. Its initiatives ranged from proposed new rules on exposures to a multi-faceted attack on what it saw as underreporting of work injuries.

And to step up directly to critique the workers’ comp system, OSHA published a broadside in March 2015, “Adding Inequality to Injury,” which accused the workers’ comp system of failing to financially protect injured workers. In October 2016, the Department of Labor (DOL) called, in effect, for a new federal commission to review how the state-based workers’ comp system ran. It estimated that SSDI spends $23 billion annually for work-injured beneficiaries. 

Trump’s victory led to a virtually complete reversal of OSHA on a number of specific initiatives and to total change of tone at the top of both the agency and DOL. 

Medicare’s set aside rules oblige claims payers to keep Medicare whole when its beneficiaries get medical care for a work-caused health problem. A major change under Trump could be expanding the program to cover not just Medicare, but also Medicaid. That would require an act of Congress. That has not happened yet, but would be consistent with the budgetary inclinations of the Congressional leadership.

For instance, Congress intends to change the coordination of disability benefits between workers’ comp and by the Social Security Disability Insurance (SSDI) program.  According to federal law, when an individual is receiving benefits from both sources, the total is capped to a percentage of the workers’ pre-injury wage.

In 25 states, the SSDI payment adjusts downwards to meet the cap. In 15 so-called reverse off-set states, the workers’ comp benefit is reduced.  This odd giveaway by the Feds is an accident of history, which the current FY2018 budget proposal of the House aims to remove at the expense of workers’ comp claims payers. 

Through the Obama years, the Feds increased pressure on employers to protect disabled workers, expanding that protections to pretty much anyone with a work-related injury.  The news here is no news — so far.  Secretary of Labor Alexander Acosta has not gone public on any pullback of Americans with Disability Act (ADA) regulations affecting how employers treat injured workers.

Interestingly, the White House threw a bouquet to workers when it gave the least tacit support for a trend, now several decades old, to protect workers when work absences arise. It did this by advocating for paid parental leave.  The underlying force behind this trend is the great, historic, rise of the full-time female workforce, combined with civil rights activism of the community of disabled persons.

There are subtle and, from a legal perspective, complicated, interdependencies between worker absence protections, such as ADA and the proposed parental leave, and workers’ comp.  Today, any employer that fails to expressly align its return to work policies for work-injured employees with federal ADA guidelines on treating the disabled, is asking for trouble.

Anyone who wants to explore this area, rich in chances to be out of compliance with something on any given day, one should talk with the Disability Management Employer Coalition, the go-to association that treats all absence and disability programs as parts of a whole.

The Administration could make a tangential, indirect and yet real impact on workers’ comp through economic stimulus and workforce policy.  But the infrastructure renewal concept appears to be going nowhere. Were Trump to kick off a trillion dollars in projects, we would see more workers in construction, which today accounts for roughly 15% of work injuries.  A renewal of manufacturing, which today provides less than 5% of work injuries, would have much more modest impact.

Trump’s signature initiative in immigration law enforcement has thoroughly frightened eight million unauthorized workers.  Even individual who shows up for scheduled meetings with immigration officials is now being arrested. Pretty much every one in the unauthorized population of 11 million is at daily risk of arrest and perhaps speedy deportation.  This has included parents of American-born children who have worked quietly in the country for decades.

But Trump is really just moving the American employer faster to rely less on unauthorized workers and even legal low wage immigrants.  The inflow of working age unauthorized Mexicans into the country peaked about ten years ago. Their numbers are expected to decline greatly in the future, due less to enforcement and more to shifts in demographics and work in Mexico.  This accelerates the decline of jobs held by unauthorized workers, and pushes employers towards mechanization, such as in meat processing and apple picking. 

ABOUT THE AUTHOR

Peter Rousmaniere is widely known throughout the workers’ compensation industry, both for his writing and consulting experience. Based in the picture perfect New England town of Woodstock, VT, he is a regular on the conference circuit, and is deeply in tune with trends and developments within the industry. His passion is writing and presenting on issues largely related to immigration, and he maintains a blog on the subject at www.workingimmigrants.com.

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