Through the great “compensation bargain” known as workers’ comp, if an employee is injured or disabled on the job, insurance provides reimbursement for medical expenses and lost wages. In exchange, workers relinquish most rights to sue their employer.
But, according to a new investigation from the non-profit ProPublica and National Public Radio (NPR), legislative changes have created a shocking imbalance in benefits — between employer-employee and also between states:
- Workers’ compensation programs are administered through state law, and have not been monitored by the federal government since 2004. While reductions in coverage often are approved as part of “cost-cutting” legislation, the amount paid by employers for workers’ compensation insurance is at a 25-year low. In addition, insurers saw an 18 percent return in 2013 — their most profitable year in over a decade.
- In 1972 a federal commission found that workers’ comp laws were “inadequate and inequitable” and created 19 recommendations — advising Congress to either establish them as minimum federal standards or require states to enact the provisions on their own. Today, just seven states follow at least 15 of the recommendations, and four comply with less than half.
- Since 2003, 33 states have passed laws that reduce workers’ compensation benefits or make it more difficult for injured workers to qualify for them.
- Reimbursement varies widely from state-to-state. The study found that, for example, the maximum compensation for the loss of an eye is $27,280 in Alabama, but $261,525 in Pennsylvania.
- In 37 states, workers seeking compensation must receive care from an employer-approved doctor — presenting a risk that the employer or insurer can have a say in medical decisions.
- Insurers increasingly use outside — and often out-of-state — medical reviewers who can rule against a worker without ever meeting him. An audit in North Dakota found that its workers’ comp system “relied entirely on out-of-state physicians mostly working for private companies that perform medical reviews for insurers. These doctors reversed the recommendations of workers’ physicians 75 percent of the time,” according to a report by Sedgwick Claims Management Services.
A study from the Occupational Safety and Health Administration — released the same day as the ProPublica/NPR report — reveals similar findings, including that employers only pay for about 20 percent of the overall financial cost of workplace injuries and illnesses. According to the agency, “This cost-shift has forced injured workers, their families and taxpayers to subsidize the vast majority of the lost income and medical care costs generated by these conditions.”