Columbia, MO (WorkersCompensation.com) - In addition to protecting employees and reducing injuries, the enhanced penalties of the 2005 revision of the Missouri Workers Compensation Act make it even more beneficial for policyholders to create and enforce drug and alcohol policies. Significant revisions by the Missouri legislature now make these policies even more powerful at discouraging drug and alcohol use in the workplace. Read more for details and a recent example of how this Act makes a difference.
One important revision increased the penalty for violating a drug and alcohol policy from 15 to 50 percent against any medical and indemnity benefits due in the past, present, and future. In addition, benefits under a workers compensation claim can be completely forfeited if it is proven that the use of said drugs or alcohol is the proximate cause of the injury.
In reality, very few if any workers compensation claims are completely denied under this provision (287.120). Many Administrative Law Judges either reduce the mandated 50 percent penalty or discourage the penalty altogether by requiring evidentiary requirements not contained in the statute. Regardless, establishing and enforcing a drug and alcohol penalty is worth the effort as an enforceable penalty can greatly reduce the cost of a claim and consequently a policyholder's e-mod, sometimes by thousands or even millions of dollars.
Safety equals savings In 2009, a laborer fell from a ladder and sustained multiple injuries to his head, neck, and spinal cord which resulted in quadriplegia. A post-accident drug test showed that the injured employee was positive for cocaine and marijuana. The results of the test were corroborated by the injured employee and was in violation of the employer's drug and alcohol policy. Although Missouri Employers Mutual paid for the appropriate medical treatment in full until the injured worker was stabilized, MEM applied a 50 percent penalty against indemnity benefits throughout the claim. To cover the full exposure of medical and indemnity benefits, total reserves were approximately $10.3 million dollars.
Once the injured employee's condition stabilized in 2011, MEM began settlement negotiations. Due to medical and legal issues, the injured worker qualified for Medicaid (State) as well as Medicare (Federal) benefits, meaning that MEM was legally obligated to protect both Medicaid and Medicare's interests. After securing the necessary court awards from the Missouri Division of Workers Compensation and an order from the Missouri Labor and Industrial Commission, MEM was able to negotiate a settlement to close out all indemnity issues and all Medicaid issues via a Medical Special Needs Trust. Medicare agreed that MEM was entitled to a credit for our portion of the injured employee's future medical treatment.
The claim closed in December 2015 with a total Drug-Free Workplace Program savings of more than of $5.2 million! This case serves a reminder about how important it is establish and enforce drug and alcohol policies. Protect your employees and your business.