Lynch Ryan's weblog about workers' compensation, risk management, business insurance, workplace health & safety, occupational medicine, injured workers, insurance webtools & technology and related topics

October 30, 2007

Risk Transfer and Furniture: Betting Against the Red Sox

Jordan's Furniture is a legendary Boston area retailer of furniture. They generate a carnival atmosphere in their theme-based stores. One involves a replication of Bourbon Street in New Orleans, complete with piped in Jazz. They will do anything - anything! - to get you to buy furniture.

Back in March, they tantalized Red Sox fans with a unique proposition: buy furniture between March 7 and April 16, and if the Red Sox win the World Series, you get all your money back. Well, there are thousands of fans in the Boston area with two reasons to celebrate the recent success of the Sox.

Eliot Tatelman, co-founder of the company with his brother Barry, will not disclose the amount of money being refunded to customers. He teases us with averages: there were about 30,000 purchases made during the promotion period. If they averaged $1,000 each, the total is somewhere around $30 million. Heck, that's enough to pay one year of Yankee third baseman Alex Rodriguez's salary!

Tatelman, shrewd businessman that he is, has insurance to cover the losses. I would love to see that policy. I wonder how the underwriters calculated the premium. Knowing Tatelman, he chose a carrier with a New York based underwriting team, full of Yankee fans. They undoubtedly scoffed at the notion that any payouts would be needed. Tatelman probably secured very favorable terms.

Oh well, it was a great marketing ploy. It's still not clear whether the rebates will be taxable (they likely will be) or whether the entire scheme was an illegal lottery. Meanwhile, Tatelman might have to shop around a little harder if he wants to repeat the gimick next year. I suspect that the underwriters - Yankee fans or not - might not be inclined to bet against the Sox again.

Sox rule! (And tomorrow the Insider will return to its customary objectivity.)

Posted by Jon Coppelman at 11:40 AM Link to, Comment (3), or E-mail this post
October 29, 2007

News roundup: Oregon's WC success, aftermath of California's fires, and more

Oregon's success with workers' comp - Can you imagine a state where rates haven't increased in nearly 20 years? No, this isn't a dream - it's happening in Oregon. Joe Paduda of Managed Care Matters takes a closer look and analyzes Oregon's success in workers' comp. Joe notes that there is no single silver bullet, but a total package that contributes to the great results: an active bipartisan stakeholder group that includes management and labor; continual monitoring of the system to measure both processes and outcomes; a structured dispute resolution process with a focus on expediting cases; state-run incentives for return to work; and remarkable employer buy-in to every facet of the program, including OSHA inspections. Go read Joe's post, he offers more detail.

South Carolina - In September, Governor Mark Sanford issued an executive order requiring the state's Workers’ Compensation Commission to use objective standards in an effort to control benefit awards which were reported to vary "wildly” averaging 81% higher than other states. This order is receiving push back and prompted a recent clarification of the Workers Comp Order.

California fire update - Fitch Ratings says that the Southern California fires could be the costliest catastrophe insured loss event this year. " ... a preliminary estimate by EQECAT, Inc. has indicated insured losses to date have exceeded $1 billion and will continue to grow. Risk Management Solutions (RMS) estimated insured losses of between $900 million and $1.6 billion and warned that losses could even exceed this level if the wildfires continue to spread. Fitch estimates that each $1 billion of insured loss adds about 20 basis points to the industry's 2007 loss ratio based on Fitch's almost $440 billion 2007 net earned premium forecast. Fitch also notes that each $1 billion of homeowners insured loss adds about 190 basis point to the industry's homeowners 2007 loss ratio."

Disaster planning - In the wake of the California fires, SHRM has issuing some excellent reports on the employer response to the disaster and how HR is coping in California. These articles make for interesting reading as case reports and they also provide valuable lessons for employers in disaster planning.

NY constructions - Construction Means Debris; Gravity Means It Falls - When a steel bucket tumbled 53 stories off the future Bank of America tower near Bryant Park on Wednesday, raining debris and sending people running for cover, it was hardly a novelty. It was the 74th time this year that something fell from a construction site in New York City, the Buildings Department said yesterday. (Thanks to rawblogXport for the pointer)

Posted by Julie Ferguson at 12:59 PM Link to, Comment (0), or E-mail this post
October 26, 2007

Cavalcade of Risk

Spencer Hill of Hill's Personal Finance is this week's host of Cavalcade of Risk. Topics run the gamut from business and insurance to gambling and health care. For those of you who are interested in investment, financial planning, and money-related matters, the regular fare on Spencer's blog is also worth a look-see!

Posted by Julie Ferguson at 7:27 AM Link to, Comment (0), or E-mail this post
October 24, 2007

So. Cal fires: business as unusual

According to NBC, the southern California fires represent the single largest movement of Americans since the civil war. Nearly one million people were evacuated, including hospitals, nursing homes, and prisons. A state of emergency was declared in 7 counties. As of this morning, 640 square miles had burned. According to preliminary estimates by the Insurance Information Institute, insured losses are expected to exceed $500 million. News reports state that overall costs are expected to be measured in billions. Historically, the most expensive California fire was the 1991 Oakland Hills fire.

The media focus has been on the fire itself, the massive evacuation, and the loss of homes, but the impact of the fire on local businesses has also been enormous. In addition to property damage and temporary business interruption for many, nearly all employers will cope with an increase in post-disaster stress in their work force. Destruction of homes will cause disruption, stress, and hardship for thousands of employees.

From a business perspective, the enormity of events is partially depicted by the experience of local post offices, 25 of which were closed yesterday. While mail might be delivered through rain, sleet and snow, fire posed a more formidable obstacle. USPS was unable to deliver mail to 478,000 homes and business in evacuated neighborhoods.

Massive evacuations, many mandatory, shut down scores of businesses. For some employers that have roles in responding to emergencies, such as hospitals, utilities, and public safety and infrastructure concerns, the need for employees intensifies during emergencies. At the same time, employees who are asked to work longer hours are often caught between the double bind of work responsibilities and caring for family needs.

Many businesses in non-essential sectors such as the technology industry simply closed in deference to their employees' family needs and in response to official requests to keep nonessential persons off the roads. According to NPR, Qualcomm, PETCO and Jack in the Box — along with many of the region's major employers — all pared down their staffs. Some large employers communicated with employees on their websites. NASSCO General Dynamics posted notices of shift cancellations due to air quality, the San Diego Zoo offered a page of emergency employee information, including work status and payroll notices, and SHARP Heath care noted the the rising demand for services and reminded employees of available day care services.

Health & safety concerns
Despite the scope of the fires, loss of life has been minimal, in no small part due to the reverse 911 emergency notification system and the efforts of heroic firefighters and rescue workers. Unsurprisingly, those battling the blaze are bearing the brunt of the injuries during the fire. CNN reports that at least 70 people have been injured, including 34 firefighters. The Scripps hospital website says that their hospitals and urgent-care facilities have treated 166 patients with fire-related injuries or conditions, including respiratory distress, fall-related injuries, chest pain, hypertension, sinus infections, minor burns and anxiety. Scripps offers a page of respiratory health advice during wildfires.

In the coming days, employers should be prepared to deal with stress reactions among employees. According to Mental Health America, some common reactions to disasters include:

  • Disbelief and shock
  • Disorientation; difficulty making decisions or concentrating
  • Apathy and emotional numbing
  • Nightmares and reoccurring thoughts about the event
  • Irritability and anger
  • Sadness and depression
  • Feeling powerless
  • Changes in eating patterns; loss of appetite or overeating
  • Crying for "no apparent reason
  • Headaches, back pains and stomach problems
  • Increased use of alcohol and drugs

For ongoing information on insurance-related matters:
Insurance information Network of California
California Department of Insurance

For fire-related and relief news:
Web-technologies have offered a rich new source for communications. The article "Using social media services to track the California fires" offers an overview of the way these technologies have been harnessed to provide real time updates and communications. Individual bloggers have been supplementing more traditional news sources. Here are a few interesting sources:
Google map -a notated with evacuation areas, fire updates, and more
@KPBS - Twitter feed from KPBS
@nateritter - Twitter feed from a local
SignOnSanDiego Forums - from the San Diego Union Tribune

Posted by Julie Ferguson at 1:29 PM Link to, Comment (2), or E-mail this post
October 23, 2007

Partners as Employees

The law firm Sidley Austin has agreed to pay $27.5 million to end an age discrimination suit involving 32 former partners. All were demoted from partner to counsel status back in 1999. Most were in their 50s and 60s. The EEOC says that the former partners, having no control over this management decision, were employees. Sidley begs to differ, but has agreed to pay anyway. Sidley is humongous: with over 1,700 lawyers across the world, only a small percentage of the workforce was involved in this particular lawsuit.

In the rarified world of corporate law, partners are co-equals. They are generally not considered to be employees. But ultimate decision-making at Sidley was in the hands of an unelected executive committee. That committee decided on the demotions and in doing so, created at least for a moment in time a new class of employees.

Even in writing the hefty check, Sidley concedes very little. "The Firm [I love the capital "F"!] believes that settling this case is preferable to the costs and uncertainties of continued litigation." Sidley agreed that the affected partners were employees subject to the ADEA "for the purposes of resolution of this matter." That is as stingy a concession as you will ever see, but then again, these are attorneys. On the other hand, the size of the settlement speaks for itself (in a language most attorneys understand very well.)

Sidley's unsuccessful defense was based upon their contention that the demotions were the result of performance. That kind of slur might work against the average working stiff, but not for high powered attorneys. Indeed, the prospect of the EEOC rummaging through performance documentation did not just freak out Sidley management; some of the impacted former partners objected as well.

The settlement will result in payments ranging from $122,169 to $1.84 millon. Chump change, perhaps, in the world of corporate law. Even the smallest of these payments looks huge in the world of workers comp, where a lifetime of pain and disability often translates into a few thousand dollars.

Who Rules?
The core issue here involves management authority. The demoted Sidley partners simply lacked the key powers of partnership. They rarely met as a group (it would require a convention center) and they never had the opportunity to vote on major issues. Though powerful and autonomous in much of their work, the demoted partners were powerless when it came to determining their own status in the Firm.

The issue of partner versus employee is still very ambiguous. This hefty settlement has undoubtedly sent hundreds of law firms across the country scurrying to review their governing procedures. There is one thing they will not lack as they parse out the rights and responsibilities of partnership: access to counsel.

Posted by Jon Coppelman at 11:26 AM Link to, Comment (2), or E-mail this post
October 22, 2007

Safety for Spanish-speaking workers must address cultural as well as language barriers

Hispanic workers suffer fatalities and serious injuries at significantly higher rates than other workers and this is due in large part to language barriers. Previously, we've discussed the importance of keeping the multicultural workforce safe by ensuring that your safety programs address language barriers. We've also discussed how qualified interpreters can save lives.

Recently, some of our readers who run a Spanish translation firm shared an article they authored, which discusses cultural misunderstandings that can jeopardize safety. We thought it was valuable enough to pass along to our blog readers and we secured their permission to feature it here:

Safety for Spanish Speakers: Beyond the Language Barrier
by Ferney Colorado and Melissa Burkhart, Futuro Sólido USA

When providing safety training for Spanish speakers, the most obvious challenge that employers face is the language barrier. However, translation is the easy part. Bridging the cultural barrier - addressing what Spanish speakers actually believe about safety in this country - is much more difficult. And, because these workers will rarely voice their misconceptions, they are rarely addressed. The result is that employers and workers compensation providers can often go to a great deal of trouble to provide quality safety training in Spanish, only to have their workers go back to the job site and do exactly what they had been doing previously.

This can be a source of great frustration, not to mention loss. The reason for it is that many Spanish speakers enter a training session holding very firm beliefs that are contrary to what they are about to be taught. Rather than instructing people who are simply uninformed on the subject, trainers have to “convert” people who believe very staunchly that they are much more valuable as workers or employees when they do not comply with federal regulations.

Many Spanish speakers are convinced that safety training does not apply to them. Employers and workers compensation providers frequently forget (or perhaps were never aware) that most of their Spanish-speaking employees have probably risked their lives at least once, and are, for various reasons, accustomed to living with a level of danger and risk that Americans would find intolerable. Spanish speakers also tend to consider those Americans who emphasize safety precautions a bit wimpy and unmanly - and perhaps eager to find excuses to put off actual work. Furthermore, they have difficulty grasping the concept that the U.S. government enforces laws to protect the safety of even the most menial of workers. Finally, they have no idea that a lost-time injury or accident can cost an employer tens of thousands of dollars - or more.

For training to have the desired results, Spanish speakers must understand why they are there in the first place before the actual instructions are presented. Common pitfalls to providing effective safety training in Spanish include the following:

  • Poor translation (either done by a computer program or an unqualified translator). This sends the message that the content cannot be very important, since no one made the effort to convey it clearly and correctly.
  • Asking a bilingual employee to present or interpret. This is risky of a number of reasons:
    a. This person may hold the same erroneous beliefs as his audience
    b. He may not be seen as an authority or expert.
    c. He may be embarrassed to speak publicly on a subject where is not an expert.
    d. An employer or trainer has no control whatsoever over what he is saying in Spanish.
  • A presenter who may be an expert in safety but is not familiar with the culture and belief system of the participants, or with the safety practices (or lack thereof) in their countries of origin. An effective Spanish-speaking trainer knows that he will be attempting to alter beliefs that have been entrenched in this population for generations, and that he will be directly contradicting Spanish-speaking immigrants’ most valued and trusted source of information----that is, other Spanish speaking immigrants. He will also have proven strategies to build trust and rapport with the participants, which will inspire to them to change their behavior and comply with the training.

Pro-active employers are hiring interpreters and trainers who are not only experts in their field but who are also culturally aware. Another option is to purchase an educational introduction to safety training that addresses the misconceptions explained here, and which, when shown before the actual training, greatly improves the results.

Of course investing this kind of effort for every simple toolbox talk does not make sense even for large employers. However, if a Spanish OSHA 10-hour, or an initial orientation to launch a new season or a substantial project begins with the points outlined below, it will be far more effective. When these points are reinforced, builders will see substantial long-term savings, as losses are reduced, workers compensation premiums and claims are minimized, and worker loyalty and buy-in to job-site safety culture solidifies.

What many Spanish-speaking employees think

  • You may be required to risk your life or health
  • No effective government inspections of work sites
  • The law does not apply to immigrant workers, for whom the government has no concern
  • Regulations are designed for American workers, who are not as tough as Hispanic worker
  • A lost-time injury or accident costs an employer nothing; if one worker is injured, there are plenty of others waiting to take his place
  • Training a new hire or setting a positive example for him will jeopardize your job security; he’ll do the same job for less money and you’ll be fired
  • A builder can buy a government inspector a nice meal or gift and no fines will be imposed for infractions
  • Most employers do not truly value a worker’s health and safety; workers are dispensable and replaceable

What Spanish-speaking workers need to learn about safety in the U.S.
  • Nobody wants you to risk your life or health
  • The U.S. government actively inspects work sites
  • The law applies to all workers, regardless of race, national origin, etc.
  • Regulations are designed to protect all workers engaged in occupations where physical risk is involved
  • The cost of a lost-time injury or accident can easily be more than a worker’s annual wages and can be severely debilitating, especially to smaller companies
  • The ability and willingness to train new hires makes you a much more valuable worker and improves your job security
  • Here, heavy fines are often imposed on employers for non-compliance with the law.
  • Most employers do value worker health and safety. Workers are valued both as human beings and as resources for the company

Ferney Colorado, who has worked in construction both in South America and in the United States, and Melissa Burkhart are the co-founders of Futuro Sólido USA, which provides Spanish language translation, interpreting, and training. They have recently produced a DVD in Spanish with English sub-titles, called The Importance of Safety Training, which addresses misconceptions about safety and greatly improves compliance among Spanish speakers.

Posted by Julie Ferguson at 1:34 PM Link to, Comment (2), or E-mail this post
October 18, 2007

It's Health Wonk Review day

Jason Shafrin at Healthcare Economist is hosting this week's edition of Health Wonk Review - grab a coffee because it's a hefty issue. To give you an inkling of this week's contents, he developed a brief index of posts:

  • BEST POSTS OF THE WEEK
  • Politics: S-CHIP, the Candidates and Conservative Health Scientists
  • From Aspen to San Francisco to México
  • Health Insurance and WTC Safety
  • Microsoft’s Health Vault
  • Money’s Influence on Physicians: Comments on physician profit motive, the NIH, and managed care
  • Health care Effectiveness: Preventive Care, Midwives and Comparing American and European Health
  • Who are you?

And as long as you are stopping by Jason's blog, why not check out some of his recent posts? Here's a few we found interesting:
Prescription Drug Coverage and Elderly Medicare Spending
Overtreated
More Physician Assistants prefer working in specialty fields over the primary care setting.

Posted by Julie Ferguson at 11:17 AM Link to, Comment (0), or E-mail this post
October 17, 2007

FedEx: California Quacking?

Three FedEx Ground employees brought a class action suit in California, contending that they are employees, not independent contractors, of the ubiquitous delivery company. They won at the initial trial, they won on two appeals and now they have won (for the most part) on the third appeal. The ruling lays out in compelling detail the employment law issues in this long-standing dispute. (Here and here are just a couple of samples of our prior coverage.)

The ruling states that "in practice, the work performed by the drivers is wholly integrated into FedEx’s operation. The drivers look like FedEx employees, act like FedEx employees, are paid like FedEx employees, and receive many employee benefits."

I don't think you can state the problem any better than the original court, which described the Operating Agreement as “a brilliantly drafted contract creating the constraints of an employment relationship with [the drivers] in the guise of an independent contractor model." FedEx “not only has the right to control, but has close to absolute actual control over [the drivers] based upon interpretation and obfuscation.” The ruling goes on to site FedEx’s control over every "exquisite detail" of the drivers’ performance, including the color of their socks [no white] and the style of their hair [no pony tails].

No doubt at all about the color of the feathers: "The essence of the trial court’s statement of decision is that if it looks like a duck, walks like a duck, swims like a duck, and quacks like a duck, it is a duck." These drivers (and thousands of others across the country) are employees.

The appeals court did reject some of the prior award. Here's one item that may break the hearts of our colleagues at the bar: Estrada’s motion asked for $619,691 in costs and $6,789,325 for his attorneys’ fees, a total of $7,409,016 -- plus a 2.0 multiplier as compensation for delay and contingency, a total of $14,818,032. The appeals court found this excessive and asked the lower court to revisit the issue of fees.

What about Workers Compensation?
The court addresses the issue of workers comp only marginally. The drivers were required to purchase "work accident" insurance. They sought reimbursement for this expense, which the appeals court granted. However, the court did not address the issue of retroactive workers comp coverage for all FedEx drivers. Given that these "independent contractors" are actually employees, and regardless of this accident insurance (which is unlikely to be as generous as workers comp), what is the status of all the drivers injured during the course and scope of their FedEx employment? Among the many retroactive liabilities looming for FedEx as they lose appeals at different levels of the judicial system, this may be one of the biggest.

As the (politically incorrect) saying goes, "it ain't over 'til the fat lady sings." FedEx surely has the deep pockets needed to continue their doomed appeals. But I do think I see a fat duck, waddling to the front of the stage, about to break into song.

Posted by Jon Coppelman at 11:09 AM Link to, Comment (0), or E-mail this post
October 16, 2007

News roundup: popcorn lung, medical tourism, health care matters, and more

Popcorn lung - We've previously taken OSHA to task for being slow off the mark in protecting workers who are at risk for severe respiratory illnesses related to exposure to microwave popcorn butter flavorings containing diacetyl. Now, while the agency continues to "seek evidence", legislators have passed a diacetyl bill requiring the agency to issue an interim final standard to minimize worker exposure to diacetyl in popcorn and flavor manufacturing plants. In response, OSHA has scheduled public hearings and issued a Safety and Health Information Bulletin on Respiratory Disease Among Employees in Microwave Popcorn Processing Plants and Hazard Communication Guidance for diacetyl. But OSHA is still balking at issuing an emergency standard for diacetyl, falling back on its preferred voluntary compliance philosophy.

Medical tourism - David Williams of MedTripInfo.com has just released a white paper on medical tourism in conjunction with MedPharma Partners LLC, a health care and life sciences consulting firm: Medical Tourism: Implications for Participants in the US Health Care System (PDF). We've talked about the issue of medical tourism before - this is an issue to keep on your radar screen. David's paper is worth a read. Among the predictions:

  • US health insurers will start to provide coverage for medical tourism in 2008. Mini-med plans and small employers -not big health plans and blue chip companies-- will lead the way.
  • State governments will begin to embrace medical tourism by 2010.
  • Opposition to medical tourism by US physicians will be relatively modest.
  • Medical tourism won't have a major, direct impact on US health care costs, but the secondary impact will be substantial.

40 years and counting - Congratulations to the folks at Business Insurance on their 40 Year Anniversary. We've long thought that the publication has some of the best reporters and editors in the industry - kudos to all. They've put together some interesting restropsective features from their 40-year history, some available online to nonsubscribers: 40 Years of Business Insurance.

Debunking viral health care spam - Joe Paduda of Managed Care Matters does a great job debunking a viral e-mail from an anonymous concerned Canadian warning the U.S. about universal health care coverage. Moral of the story: never believe unsolicited emails and know your source.

McCain on Health care - Bob Laszewski of Health Care Policy and Marketplace Review offers an analysis of Senator John McCain's Health Care Reform Plan. This follows last week's analysis of the Clinton health care plan.

Immigration crackdown effects on the slaughterhouse - Thanks to Workplace Prof Blog for pointing us to a New York Times article we'd missed on how the immigration crackdown is affecting the work force in the slaughterhouse industry. Work in meat-packing industries is right up there in terms of grueling and dangerous jobs, and many plants are finding it difficult to replace undocumented workers who were displaced during recent immigrant raids.

Foot power - Ergonomics in the News discusses a foot mouse / slipper mouse as an alternative when repetitive strain injuries preclude the use of a traditional mouse.

Posted by Julie Ferguson at 9:57 AM Link to, Comment (0), or E-mail this post
October 15, 2007

Wisconsin Volunteers: Look That Gift Horse in the Mouth

Back in February of 2005 we blogged the case of Margaret Morse, a member of the Legion of Mary, a volunteer group affiliated with Christ King church in Wisconsin. In the course of delivering a statue of the Virgin Mary to a parishioner, she ran a red light and crashed into a vehicle driven by Hjalmar Heikkinen, an 82 year old barber. Heikkinen was paralyzed. A jury awarded him $17 million - and tapped the liability policy of the church to pay it. The case reached the Wisconsin Supreme Court, where a split ruling (3 to 3) sustained the original award.

There apparently was language in the church's insurance policy that included coverage for volunteers. While the Legion of Mary operated with considerable independence from the church itself, it was founded in 1968 with the support of a parish priest. It's not far fetched to say that the specific action involved here - delivery of the statue - was related to the core function of the church. But then, any act of kindness might fall under that very wide umbrella!

Liability for Volunteers
Beyond the unfortunate circumstances of this case, anyone using volunteers needs to be aware of potential liabilities. In our increasingly litigious society, prudent managers must take the extra step to protect their companies/organizations. Here are a few very basic steps in managing volunteers:
- If they're going to drive at any time, check the driving records. If the record is spotty or poor, do not allow them to drive while carrying out volunteer duties.
- If they are near children or vulnerable adults, or entering private homes, run a criminal background check
- Require a resume. It's important to know who they are and where they come from.
- Train, orient, supervise and document. The services might be free, but proper management requires the commitment of adequate resources.
- If they are not working out, terminate the relationship. As in regular hiring, it's important to take action before serious problems emerge.

It's not at all clear that any actions would have insulated the church from this unexpected liability. The court's ruling has stretched the definition of volunteer and liability to the limits. Nonetheless, when it comes to volunteers in general, it is indeed time to look the gift horse in the mouth. The notion that services do not "cost" anything is attractive, especially in the non-profit world. But in a culture that puts a price on everything, everything has a cost. The cost of volunteers lies in the essential screening, training and supervision. Anything less opens the door to very big liabilities indeed.

Posted by Jon Coppelman at 11:16 AM Link to, Comment (2), or E-mail this post
October 12, 2007

Pennsylvania: Blood on the Forms?

The good people governing the Commonwealth of Pennsylvania have a major concern. They want to make sure that each and every worker injured in the course of employment knows his/her rights and benefits under the comp statute. Most states accomplish this by requiring a posting by the employer, detailing the name and address of the insurance carrier. Employers usually include workers comp benefits in the employee handbook. It's an employer "best practice" to fully inform employees of the need to work safely, report hazards and report injuries immediately. Most states have websites where injured workers can view the statutory benefits and the mandated procedures under comp. For the most part, injured workers seem to be able to find the comp system without too much trouble.

Well, a system that is mostly working is just not good enough for Pennsylvania. They want proof, they want documentation, and they want signatures. So they have come up with a process that requires employers to provide a form to all new employees and to injured workers at the time of the injury. The one pager, entitled "Workers' Compensation Information," (sort of) explains the basics of comp.

The form includes the following statement: "You (injured employee) should report immediately any injury or work-related illness to your employer."
Department of Duh: While this language is fine when the form is provided during orientation, the same form is also given to the employee after the injury has been reported. Do you really need to tell the employee who has reported an injury to report an injury?

The one pager goes on to say that "if your claim is denied by your employer, you have the right to request a hearing before a workers' comp judge." Gee, aren't we getting a little ahead of ourselves here? (And by the way, unless the employer is self-insured, the carrier - not the employer - denies the claim.)

At the bottom, the employee signs the following statement:

I, _____________, employee of ____________ (employer), certify that I received, read, and understood the above information on _____________ (date of work-related injury or disease).

Form Two
If the employer participates in a Preferred Provider Network, the employee must be given another one pager, explaining in detail the rules and procedures for the PPN. This form contains 11 bullet points in relatively small print. At the bottom of this form, the employee signs the following statement:

My signature indicates that I have been informed and understand my rights and duties pertaining to medical treatmant for work-related injuries.

With two required forms, that's a whole lot of "understanding" under less than ideal circumstances. After all, these forms are signed at the time an employee reports an injury to the supervisor. Often enough, the employee will be suffering some pain and discomfort as a result of the injury. I'm sure the attorneys who pushed for adoption of these requirements revel in the enormous loophole contained in the concept of "understanding" the requirements. Yes, my client signed the form (under duress, while waiting for the ambulance), but he didn't really understand what he was signing. So the employer failed in his duty...Just what we need: another opportunity for attorneys to play "Gotcha!"

When I called the PA Comp Bureau for clarification, they confirmed that two separate forms and signatures are required. I said that I hoped the injury did not involve a cut on the injured employee's dominant hand: that might result in blood on the forms. The bureau contact laughed, albeit nervously.

Free Advice for PA
Here's a bit of advice for the bureaucrats in the Keystone State: Chill, baby. You have a comp system that is working reasonably well. Requiring two signatures at the time of injury will not increase employee awareness of rights under the comp statute. People will sign (if their injuries permit) because they have to, but they won't understand much of what they're signing. Following an injury, people are mostly concerned about getting medical treatment and getting back to their jobs.

Requiring employers to retain copies of the signed documents is a random and extremely ineffective means of ensuring compliance. As my mother-in-law used to say, "Don't borrow trouble." With these burdensome requirements, Pennsylvania has borrowed trouble and accomplished very little in the process. There is a reason why no other state requires this type of documentation. It's pretty darn useless - and it interrupts the natural flow of caring for an injured worker. Pennsylvania should just do away with the bloody forms.

Posted by Jon Coppelman at 1:02 PM Link to, Comment (7), or E-mail this post
October 11, 2007

Cavalcade of Risk and the Clinton Health Reform Plan

Bob Laszewski of Health Care Policy and Marketplace Review hosts this week's edition of Cavalcade of Risk noting that posts run the gamut from the traditional corporate sense of limiting "loss costs" to the less traditional popular notion of assuming individual responsibility. He offers up a good sampling of both.

We've had Bob's smart blog on our regular reading list ever since our friend Joe Paduda brought it to our attention. Joe, who is no slouch himself, dubs Bob "the smartest man in health care policy." For an example of Bob's cogent analysis in action, be sure to read his most excellent Detailed Point by Point Analysis of Senator Clinton's Health Reform Plan - it definitely merits your time. We look forward to having his ongoing analysis of all things health care throughout the upcoming elections.

Posted by Julie Ferguson at 7:43 AM Link to, Comment (0), or E-mail this post
October 10, 2007

Delphi Goes Fishing - and is Harpooned by the EEOC

Delphi, the auto parts maker working its way through bankruptcy, has a new problem. The U. S. Equal Employment Opportunity Commission (EEOC) has sued the company under the ADA for making illegal inquiries about employee medical conditions and retaliating against those who refused.

In 2004 Delphi implemented a policy requiring any and all workers returning from sick leave to sign releases permitting the company to access their medical records. While we can sympathize with the company's desire to ensure that employees are fit for work, this policy goes way beyond any such concerns. Apparently, the company required employees to sign this release, even if they only missed a day or two. If employees refused to sign, they were terminated.

"The ADA prohibits employers from making inquiries as to whether an employee is an individual with a disability unless the inquiry is shown to be job-related and consistent with business necessity," the EEOC stated in the complaint.

The application of the ADA in this situation is a bit of a stretch. Perhaps the EEOC could not find any statute that really fit the circumstances. (HIPAA does not quite fit, either.) Delphi is not discriminating against the disabled - they are inappropriately perusing medical records, under the dubious reasoning that a short absence from work inherently involves high risk in returning to work.

The Need to Communicate
There are a number of circumstances following sick leave where an employer might need to talk to the employee's doctor. For example, an employee might be prescribed a medication that impacts alertness and the ability to operate machinery. Or an employee with a non-work related injury might not be able to perform his or her regular job safely without some accommodation. Delphi's mistake - and it's a big one - is to require every employee taking sick leave for any reason to sign a medical release. This is not job and employee specific: it's the kind of fishing expedition that confidentiality requirements explicitly prohibit.

Employers can and should secure an informed "release for full duty" from the treating physician when the need arises. When the circumstances require it, employers should communicate with doctors to ensure that the employee and co-workers are safe. Employers can and should require employees to disclose any medical conditions or prescriptions that directly impact the ability to perform the work safely (so that reasonable accommodations can be provided). But that is a long way from assuming that any and every absence is cause for examining medical records. That's not business necessity; it's an invasion of privacy. Whether filed under HIPAA, the ADA or some other statute, it's one business practice that needs to stop immediately. If Delphi has any business savvy, they already will have taken steps to end this blatantly inappopropriate practice.

Posted by Jon Coppelman at 1:31 PM Link to, Comment (3), or E-mail this post
October 9, 2007

Breach of Trust: the impact of the WTC disaster on workers compensation

Our colleague Peter Rousmaniere is writing an important 4-part series on the World Trade Center and workers compensation that is being featured in Risk and Insurance. These articles are part of the publication's in-depth focus on how Sept. 11 forever altered the workers' comp landscape and eroded the trust implicit between employer and employee. The first two issues have been published and the remaining articles will be published in upcoming issues. The series should be mandatory reading for anyone involved in any aspect of workers comp. The first two articles in the series demonstrate how the magnitude of the disaster and its aftermath have exposed innumerable fault lines in the century-old insurance institution.

In Part 1: Up in Smoke, Rousmaniere discusses the appalling lack of any attention to safety in the mammoth WTC cleanup. As a work-related insurance event, the unprecedented number of deaths that occurred may represent the tip of the iceberg as the health problems of some 10,000 to 20,000 recovery workers are now beginning to emerge. Some of the problems in evidence include disabling and chronic rhinitis, "RADS," or Reactive Airways Dysfunction Syndrome, and post traumatic stress disorder. (And this says nothing about the potential ill health effects on the nearly 250,000 local residents, workers and students.)

The workers - both on-the-clock employees and volunteers - labored daily in a highly toxic stew with a stunning lack of attention to the barest minimum of health and safety standards. Rousmaniere describes the abject failure on the part of environmental safety agencies to enforce any safety codes and offers some theories for why safety was so overlooked:

One theory is that assurances to the public about the absence of environmental hazards lulled workers and employers into indifference. Days after the attack, EPA and OSHA issued press releases saying Lower Manhattan was safe to enter.

New York City's Department of Design and Construction personnel "are not being exposed to unhealthy levels of chemicals and that air quality around the WTC is generally good," read an Oct. 17, 2001, OSHA communique.

Another theory is that the World Trade Center collapse decapitated the work safety leadership inside New York City's government.

"In the collapse of the towers, essentially the whole emergency response command structure of the FDNY was lost, as well as a majority of the department's (hazardous materials) instructors, technicians and specialists," wrote NIEHS consultants Moran and Elisburg.

In Part 2: The Disease Within, Rousmaniere examines the insurance challenges that were faced in the immediate aftermath of the WTC event. In a single event, the death tally equaled 10 years of "normal" or expected work-related fatalities. He looks at some of the decisions that were made and some of the ongoing repercussions of those decisions, painting a portrait of a total collapse of the system as various weaknesses and flaws were exposed.

Rousmaniere calls this collapse "the dead elephant in the room no one wants to mention" and points to several root causes for the collapse:

  • Agonizingly slow administration of claims.
  • Barriers for disease claims--the very claims that disasters will create.
  • The proclivity for people to seek financial relief for work-related conditions through tort litigation and federal assistance.

He traces one disease claim to point out the complexities and the 3-year labyrinthine process that it has taken to come to any resolution. This does not bode well for the estimated 5,500 workers who will need ongoing care for respiratory diseases and the nearly 14,000 workers who need care for mental conditions.

In discussing these articles with Rousmaniere, he notes that while federal intervention in state workers compensation benefit structures has traditionally been very low, it may well take a big leap after the debacle of the World Trade Center aftermath is better understood. His series provides one of the most comprehensive examinations of the event to date. And we can see many of the same issues, such as the lack of attention to safety and prevention, in the aftermath of Katrina.

The final two parts in the Rousmaniere series will appear in Risk and Insurance in the October 15 and November 1 issues. We will be sure to bring them to your attention.

Posted by Julie Ferguson at 9:10 AM Link to, Comment (0), or E-mail this post
October 5, 2007

Health Wonk Review: SCHIP Veto, Health Reform Prospects, and more ...

Jane Hiebert-White has posted a most excellent edition of Health Wonk Review at the Health Affairs Blog. Among other matters, she takes the pulse of the blogosphere in the aftermath of the presidential veto of the State Children’s Health Insurance Program (SCHIP). As the political debates about health care and health care policy heat up from now to the election, HWR offers a great bi-weekly snapshot.

Posted by Julie Ferguson at 6:59 AM Link to, Comment (0), or E-mail this post
October 4, 2007

News Roundup - Mining, MO, SC, ergonomics, and overtime

Mining hearings - Yesterday, families of deceased miners began testifying in a hearing on the Utah mine collapse sponsored by the House Committee on Education and Labor. In an emotional hearing, many testified that workers had been concerned about the safety of the mine but were reluctant to voice concerns too strongly for fear of losing their jobs. Much of the criticism is being directed at federal oversight authorities, most notably the Labor Department's Mine Safety and Health Administration (MSHA). According to panel chairman Representative George Miller, neither the mining company, Murray Energy Corporation, nor MSHA has been fully cooperative in supplying information. Miller says that the Department of Labor cut critical staff, hired officials from the coal industry, failed to require wireless communications and underground rescue chambers for the miners, and failed to enforce compliance with rescue plans. Families say MSHA has failed to regulate the industry.

Missouri - Next month, Missouri will be facing a pending challenge to its controversial 2005 workers' comp reforms, which we've discussed a few times before. In November, the Missouri Supreme Court will hear oral arguments in a lawsuit challenging the law's constitutionality. The suit was brought by more than 70 employer groups. Suzanne King of the Kansas City Star offers a look at both sides of the issues in Missouri workers compensation reform and the upcoming challenge.

South Carolina - As a follow-on to its recent reforms, the Governor of South Carolina recently signed an executive order mandating the use of medical guidelines by the South Carolina Workers’ Compensation Commission when determining awards. This is an attempt to curtail the variations in benefit payments, which average 81% higher than benefits in other sates.

Ergonomics - HR World offers 10 easy tips for workstation ergonomics along with a huge list of resources. There are links to other workstation guides, ergonomic weblogs and sites, exercise and posture resources, ergonomics associations and consultants, office furniture, and and more.

Employment law - George Leonard at George's Employment Blawg features a post on an emerging trend of overtime litigation. He cites a Business Week article which classifies the types of suits involved:

There are two basic categories of overtime claims. One arises because a company has misclassified employees as exempt from the wage and hour laws, and thus improperly failed to pay overtime. In some of these cases the workers have been classified as independent contractors, meaning the company doesn’t pay them benefits, either.

The second is a so-called off-the-clock claim, in which employees allege that some of the work they do is not recorded by the company, sometimes as an intentional way to keep them from accruing overtime.

It's worth a read - forewarned is forearmed!

Posted by Julie Ferguson at 9:06 AM Link to, Comment (0), or E-mail this post
October 3, 2007

Linebacker with a Disability?

Odell Thurman plays linebacker for the Cincinnati Bengals. That is, he used to. He's currently under a one year suspension for violating the NFL's substance abuse policy: his first violation resulted in a four game suspension; that was followed by a full year off after he was arrested for DUI (blood alcohol at 0.18). He has filed suit with the EEOC claiming that the NFL has discriminated against him, based upon a disability.

Thurman claims that the league's actions prove that he is either an alcoholic or the league perceives him to be one - either way, he might be protected by the ADA. However, Thurman has some formidable obstacles to overcome to win his case. As a professional football player, he operates under the rules of the NFL and its collective bargaining agreement. If you read the league's substance abuse policy (over 20 pages long), you will see oh-so-carefully crafted wording governing drug and alcohol testing, first strike sanctions, second strike sanctions, complete with rules for determining how much of the signing bonus has to be returned after violations. The league appears to have followed its own procedures to the letter in suspending Thurman.

Under the ADA, active drinking is not protected. The ADA's own guidance for employers states:

While people with alcoholism may be individuals with disabilities, the ADA still allows employers to hold them to the same performance and conduct standards as all other employees, including rules prohibiting drinking on the job.

The NFL's collective bargaining agreement gives the commissioner considerable leeway in determining punishment. Thurman's case is presumably based on the fact that he is no longer drinking. He has probably completed some kind of treatment program, and thus might possibly qualify under the ADA definition of an individual with a disability: assuming, of course, that he is an alcoholic or the league believes him to be one (this is not at all clear) and assuming he is now under the ADA's protection. That's a lot of assuming. Somehow, it's hard to imagine a 235 pound man who can bench-press over 400 pounds and who can shed the block of a 300 pound behemoth, and who presumably shows up sober for practice and for game day is, well, an individual with a disability, who cannnot perform "one or more major life activities" such as standing, breathing, walking, etc.

Even if Thurman can meet the ADA definition, he is still a long way from strapping on the pads. He would have to prove that the collective bargaining agreement itself discriminates against "disabled " NFLers who are able to play (an oxymoron if there ever was one!). Many employers simply terminate individuals who violate substance abuse policies; such terminations do not violate the ADA, even if the individual is an alcoholic. Thurman certainly violated "company" policy, twice. He was suspended according to the league's rules. He now claims his suspension must end because he has "recovered." I don't think so. His suspension is simply policy, bargained by his union and enforced equally on all players, whether technically "disabled" or not. The EEOC is unlikely to invalidate the players's agreement (unless, of course, the judge is a Cincinnati Bengals fan).

I'm not without sympathy for Thurman. His mom died in an auto accident in 1993. His dad died in 2003 of liver and kidney failure (substance abuse involved?). He grew up in rural Georgia in his paternal grandmother's household with 17 other people. He has had a tough life, which in turn has made him a very tough man. He is surely disadvantaged, but that does not mean he is disabled.


Posted by Jon Coppelman at 9:38 AM Link to, Comment (0), or E-mail this post
October 2, 2007

Bobbing for Drumsticks? Ohio Supremes Reverse Themselves

Back in January we blogged an unusual case from Ohio. David Gross was a 16 year old working at a Kentucky Fried Chicken. Despite safety training and warnings to the contrary, he insisted on cleaning the fryer his own way, filling it with water boiled under pressure. When he opened the fryer, he burned himself and two co-workers who came over to help. Because he wilfully disregarded safety directions, his claim for temporary total disability was denied. When the Ohio Supreme Court reviewed the case, they upheld the denial, equating Gross's wilful disregard with job abandonment.

After giving themselves the summer to think it over, the court has reversed itself and found in Gross's favor. Lawyers pointed out at the time of the initial ruling that the court seemed to be taking the "no fault" out of comp: by holding Gross accountable for his actions, they appeared to open the door to routine denials, based upon failure to follow safety instructions.

The court writes:"Although KFC appears justified in firing Gross for violating workplace rules, the termination letter established that his discharge was related to his industrial injury. Therefore, upon reconsideration, we hold that Gross's termination was involuntary."

I found the logic in the original decision a little hard to follow. The justices claimed that wilful disregard of safety instructions was the equivalent of "voluntary resignation." But he was still working - that's hardly a resignation. And while his own negligence was the sole cause of the injury, he was injured at work. Workers comp is no fault. Gross was at fault, but it doesn't matter. The injury is compensable, pure and simple. KFC should have fired Gross before he got hurt!

Bobbing for Drumsticks?
Two justices dissented from the revised opinion, including a long-winded justice named O'Connor. Follow her convoluted reasoning trying to uphold the original opinion, if you wish. Lest you think judicial discourse is always dry and musty, I quote at length from the concurring opinion of Justice Pfiefer, who slams the dissenting O'Connor with literate panache:

The chicken Littles in dissent predict a workplace apocalypse, where employees bob for drumsticks in hot oil, ultimately resulting in an increase in the price of a bucket of "extra crispy." Back in the real world, nothing has changed, due to this court's wise rethinking of its prevous decision in this case. Gross was injured on the job. That he should receive workers compensation benefits for his injury is completely consistent with the philosophical underpinnings of the workers compensation system. The lead dissent is full of citations and fury signifying nothing - of the many cases cited in the dissent, not one comes anywhere close to even tangentially involving a worker being fired and denied workers compensation benefits for a violation of workplace rules that caused his own injury.
The lead dissent invites a system in which workers who make poor decisions (removing a guard, working on a roof without scaffolding, overriding a control on a punch press) can end up being denied benefits. That dissent's Dickensian dreamworld - where presumably the Union workhouse, the Treadmill, and the Poor Law remain in full vigour - does not exist. We enjoy instead a constitutionally established system that renders fault irrelevant in compensating employees for their workplace injuries.

Nothing personal, Justice O'connor! Can I buy you a cup of coffee?

Posted by Jon Coppelman at 2:52 PM Link to, Comment (5), or E-mail this post
October 1, 2007

Initial rulings go against W.R. Grace in Libby suit

In a case that the Justice Department described as as one of the most serious criminal indictments in U.S. history, the Ninth U.S. Circuit Court of Appeals ruled that criminal charges against W.R. Grace executives for "knowing endangerment" could be reinstated.

We recently blogged about asbestos-related illnesses surfacing in workers of a Texas vermiculite plant that was run by W.R. Grace. The plant processed vermiculite from the company's infamous mine in Libby, Montana. We noted that seven W.R. Grace executives would be facing a criminal trial in September related to deaths that have occurred in Libby. The charges can lead to 15 years in prison on each count

Executives are being charged with exposing Libby residents to asbestos fibers for more than three decades, despite being aware of the dangers of the ore, as indicated by internal company documents. Workers were never alerted to those dangers.

"From 1963 until the early 1990s, Grace mined and processed a large supply of vermiculite ore on a mountain six miles outside Libby. Clouds of vermiculite, which contained tiny shards of dangerous asbestos, were inhaled by the miners and brought home to their families in their clothes.

The health crisis that followed didn’t become national news until 1999 when the Seattle Post-Intelligencer reported that hundreds of vermiculite miners and their families had died and thousands more had become ill. The U.S. Environmental Protection Agency immediately launched an emergency cleanup."

Last year, a federal judge dropped some charges on a statute of limitations basis and excluded some evidence considered vital to prosecuting the government's case. But on September 20, the federal Appeals Court reinstated conspiracy and environmental charges against the company and its executives. Prosecutors can now present evidence back to 1976. Studies show that the rate of asbestos-related illness in Libby is 40 times higher than the national average.

We will be following this case, which affects many workers, family members, and townspeople. We suspect that workers and family members of the more than 200 plants nationwide that were processing the ore will also be following this case. Those of us in Massachusetts remember another highly publicized environmental case involving W.R. Grace in Woburn, Mass., a case that had widespread attention due to a book and a film called A Civil Action.

Posted by Julie Ferguson at 7:13 AM Link to, Comment (0), or E-mail this post