March 28, 2016
Stanford Study Reflects Positive Outcomes for Workers and Employers: Professor Alison D. Morantz of Stanford University has issued her second report focused on Texas “nonsubscriber” Option injury benefit programs. Major findings include:
- Option programs pay better wage replacement benefits.
- Frequency of severe, traumatic employee injury claims is cut in half.
- Percentage of employees disabled drops by a third.
- Employer costs are cut in half.
- Coverage exclusions have minimal impact on cost savings.
- Negligence liability exposure incentivizes Option employers to invest in safety.
- As large Texas employers elected the Option, workers' compensation costs dropped.
For a further summary of this new study, click here.
U.S. Steel Lawsuit on Retaliatory Discharge: The U.S. Department of Labor has filed a lawsuit against U.S. Steel for suspending an employee for five days without pay for not complying with an immediate injury reporting requirement. The key issue involves whether the employer violated the Occupational Health and Safety Act (OSHA) through employment retaliation that discourages reporting of workplace injuries.
We believe this lawsuit does not impact reporting requirements under a Texas or Oklahoma injury benefit plan. An immediate injury reporting requirement as a condition of benefit payments encourages reporting of workplace injuries. It also results in faster medical care, an early determination of the extent of injury, timely investigation of the claim, valid drug and alcohol testing, and correction of any unsafe condition that jeopardizes the safety of co-workers. Of course, we recommend that any immediate injury reporting requirement be subject to a “good cause” exception for late reporting that is administered under the Employee Retirement Income Security Act (ERISA) by a fiduciary in the best interests of the injured worker. Employers also commonly pay all medical expenses and wage replacement benefits up to the point of any claim denial for late reporting.
Texas and Oklahoma law and ERISA do not specify a reporting timeframe to file an injury benefit claim, so an employer must do so in the benefit plan. Courts have consistently maintained that, unless the terms of a benefit plan violate ERISA, the terms of the plan will govern. For example, most of us are familiar with group medical plan utilization review and notice requirements that can impact your level of benefits. A benefit reduction or claim denial for late reporting under an ERISA benefit plan is not employment retaliation. ERISA does provide a cause of action for retaliation which is separate and distinct from an OSHA retaliation claim and involves a different analysis than will be applied in the U.S. Steel lawsuit.
An active dialogue is ongoing within the Option program community about whether injury reporting timeframes should be lengthened or new financial incentives should be created for employees to immediately report injury claims. Innovation aimed at achieving fairness and the best outcomes for injured workers is an ongoing process that should never stop.