Pro Football And Workers Compensation: A Violent Collision?
Wellesley, MA (CompNewsNetwork) - Chad Hennings spent nine years as a
lineman for the Dallas Cowboys. He accounted for 28 sacks, 6 fumble recoveries, 4 return
yards and 1 touchdown in 107 games before retiring after the 2000 season. He also suffered
permanent damage to his back. The question is whether or not his work-related back injury
is compensable under the Texas workers comp system.
The Texas workers' comp law treats pro athletes as a special class. Under Texas Labor
Code §406.095(a), a pro athlete "employed under a contract for hire or a collective
bargaining agreement who is entitled to benefits for medical care and weekly benefits that
are equal to or greater than the benefits provided" by workers' comp must make an
election between the two types of benefits. At first glance, it's a no-brainer. Henning's
benefit package as a player dwarfs benefits under the comp system: he earned $1.4 million
in salary and benefits in his final season with the Cowboys, including $225,000 under an
"injury-protection clause," $38,921.98 from the Cowboys to cover his medical costs and
$87,500 in severance pay.
Reversing Field At first, the court system threw Hennings for a loss. The 10th
Court's original July 23, 2007, opinion deemed Hennings' overall contractual package of
salary and medical benefits during his pro football career to be higher than benefits
available under workers' comp, thus rendering Hennings ineligible for such benefits under
Texas law. But in its Jan. 30 opinion, the court reversed itself and upheld a jury finding
that, in Hennings' case, workers' comp was a better deal for him because of its longer
duration. After re-consideration, the court separated the indemnity benefit (where comp was
insignificant) from the medical (where taken over a lifetime, comp might well exceed the
deal offered by the Cowboys). In other words, Hennings's medical benefit of $38,921 might
well prove less than the lifetime medical charges for treating his back problems. Heck, he
could blow through that in a single surgery.
Based upon the Court's ruling, a Texas-size door has been opened for all professional
athletes in the state to access the robust medical benefits of the workers comp system.
The decision may not help many retired pro athletes, because it may be too late for them
to seek workers' compensation; the statute of limitations may have run on their potential
claims. (Most states require that claims be filed within 2 years or less of the
occurrence.) Going forward, I would not be surprised to see players routinely file comp
claims immediately after injuries, knowing that they will not qualify for benefits in the
short run, but protecting their interests once they quit the game.
Rate Setting Dilemma If professional athletes are increasingly successful in their
efforts to win workers comp benefits, insurance carriers and regulators will face an
interesting dilemma: determining an actuarially defensible rate for coverage. Right now,
the Scopes classification manual offers just two classes for professional athletes:
Class code 9178 Athletic Team or Park: Non-Contact sports. Applies to players,
coaches, managers or umpires and includes all players on the salary list of the insured,
whether regularly played or not. Non-contact sports include baseball and basketball.
NOTE: Authors of the Manual obviously did not see the Detroit Piston "bad boys" in
Class code 9179 Athletic Team or Park: Contact Sports. Applies to players, coaches,
managers or umpires...Contact sports include football, hockey and roller derbies.
As a point of reference, the current rate for class 9178 in Massachusetts is $23.11.
Oddly enough, the rate for 9179 (contact sports) is slightly lower at $22.55. That is well
below the rates for roofers and steel erectors.
NCCI might want to consider some serious revisions to the Scopes Manual. To begin with,
separate classes are needed for coaches (relatively modest exposures) and players (huge
exposures). They might even want to approach it in a manner similar to the construction
industry, where the payroll is broken out by activity: field goal kickers, for example, are
lower risks than lineman. Running backs are always at risk for knee injuries. And after the
most recent SuperBowl, it appears that quarterbacks take their lives in their hands with
every snap of the ball.
A Parallel Universe? Professional athletes and workers comp are an odd mix. Where
comp offers a combinatin of indemnity and medical benefits, for athletes the only issue is
medical. With their enormous salaries, athletes will rarely have a need for indemnity
benefits, which top out around $50,000 a year in even the more generous states. Medical
benefits are a different matter entirely. When it comes to work-related injuries, comp
provides lifetime coverage, with no co-pays, no deductibles and no time limits. Comp offers
the best medical coverage of any kind, anywhere in the world. Just what a disabled athlete
The permanent partial and permanent total exposures for football players are humongous:
concussions, back injuries, blown out knees, torn rotator cuffs, torn biceps, nerve damage.
Feed the injury data from pro football and pro baseball to an actuary and you'll generate
a rate that exceeds the current top ticket professions of structural steel erectors and
lumberjacks. The rate would soar well above $100 per one hundred dollars of payroll.
The optimum solution lies outside of the comp system. Workers comp indemnity is simply
not crafted to protect the interests of (wildly overpaid) athletes. The players
associations of the various professional sports need to sit down with management and craft
a parallel universe: not the conventional workers comp system, but a combination of income
protection and lifetime medical benefits that contemplate the real risks inherent in