Experts Debate Impact Of Workers’ Compensation Changes

Madison, WI (WorkersCompensation.com) - A November 2010 Congressional hearing was the catalyst for continued debate by three workers' compensation leaders. The feature article of the Spring 2012 IAIABC Journal extends the conversation between John Burton, Douglas Holmes, and Gregory Krohm on the overall impact of state workers' compensation reforms in the last two decades. These three experts disagree about whether the state law changes that reduce indemnity benefits and tighten eligibility standards for compensable claims are causing cost-shifting to other social insurance programs, mainly Social Security Disability Insurance (SSDI).

In November 2010, the U.S. House of Representatives Committee on Education and Labor, Subcommittee of Workforce Protections, convened a hearing to evaluate developments in state workers' compensation systems. A formal examination of workers' compensation across the United States has not been conducted since the 1972 National Commission Report. Testimony during the hearing focused largely on two issues, whether workers' compensation was adequately replacing income loss and the use of the American Medical Association's Guides to the Evaluation of Permanent Impairment. John Burton participated in the hearing, and Douglas Holmes and Gregory Krohm submitted written testimony about the issues raised. The three opinions on workers' compensation differed quite sharply, and each agreed to provide a written follow-up. The pieces included in the IAIABC Journal largely center on arguments about cost-shifting and federal involvement in state workers' compensation.

These experts agree that reforms in the 1990s substantially lowered the costs of workers' compensation cash benefits. But, there is strong disagreement on whether the law trends since 2000 have systematically curtailed access to workers' compensation cash benefits and consequently force workers to rely solely on SSDI. This debate is particularly relevant after recent legislation in several states continues to narrow the definition of “arising out of the course of employment.”

Another key issue of the debate is what the appropriate interface between the Federal government and state workers' compensation systems should be. Krohm argues that states are routinely revising their laws, often with expanded benefits and technical corrections to make the laws work more efficiently and uniformly in current circumstances. As he did when he chaired the National Commission, Professor Burton still supports a Federal law establishing minimum standards for benefits and coverage of workers' compensation laws in all states. Holmes points out that the research to date does not show a statistically causal connection between changes in workers' compensation and increased application for social security disability benefits. His article reports the percentage of individuals receiving SSDI that also receives workers' compensation payments is very small and the primary source of increases in SSDI applications and benefits has been changes in the SSDI benefits and demographic changes unrelated to workers' compensation.

The IAIABC Journal, published twice a year, provides a forum to advance the understanding and management of workers' compensation system administration through the availability of data, research, policy analysis, and thoughtful opinion. The Spring 2012 publication also explores impairment versus disability, the role of social support in claim outcomes, and the personal account of an injured worker's journey through the system. The IAIABC Journal is available complimentary for IAIABC Members and available for purchase for Nonmembers. Download the publication at www.iaiabc.org/store

About the IAIABC

The IAIABC is an association of government agencies that administer and regulate their jurisdiction's workers' compensation acts. Along with these government entities, various private organizations involved in the delivery of workers' compensation coverage and benefits participate in the IAIABC. Since its inception in 1914, the IAIABC has worked to improve and clarify laws, identify model laws and procedures, develop and implement standards, and provide education and information sharing. The IAIABC strives to gather the best resources available to solve the practical administrative and operational problems of its members.

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