Trends to Watch in Workers’ Compensation Law

At the National Workers’ Compensation & Disability Conference last November, Brad Bleakney, a partner with Bleakney & Troiani, and Lora Northen, a Shareholder with Capehart Scatchard, led a seminar on recent trends in workers’ compensation. The following is a Q&A with Brad and Lora.

Q. What was the biggest change or trend in 2016?

Brad: 2016 saw a dramatic “rollback in cutbacks” in workers comp benefits mainly due to constitutional challenges and due process concerns. Courts nationwide have started the process of striking down some of the major reductions in workers’ compensation benefits as unconstitutional. Most industry people are aware that the Oklahoma Supreme Court struck down the employer friendly Opt-Out provisions and the 180-day minimum exposure rule on carpal tunnel claims while Florida's Supreme Court struck down caps on claimant attorney's fees and the 104-week limit on TTD benefits.

Lora: Courts view the grand bargain as under attack. More and more we will see state courts carefully scrutinizing any attempt to curtail workers’ benefits.

Q. What is the new up and coming trend that workers’ comp professionals should know about?

Brad: In a word TRUMP. Major tax changes and decreased regulations, if forthcoming, will have the most significant impact on the insurance industry and financial sectors, annuity markets, captives and current funding of reserves. Everything else will pale by comparison. We do see a growing national trend toward adopting electronic filing at the state level and a renewed push for electronic medical bill processing. I do see trending a greater recognition of PTSD claims for first responders. I suspect that municipalities and public employers will face greater numbers of verified PTSD claims as new medical testing and proof become available to claimants. Municipal employers will soon feel the increased financial burden of expanded first responder presumptions. Medical expenditures in first responder cancer claims will certainly dwarf ordinary back surgery claims, not to mention the attenuating death benefit payments for dependent children and surviving spouses. I am not saying that these benefits are not due to our first responders but rather that new presumptions and lower medical causation thresholds will shock municipal budgets for cancer claims, pulmonary disease and PTSD claims.

Lora: Carve outs as exceptions to the states WC statute particularly for First Responders, including cancer and heart claims as well as death benefits. I also believe we are seeing, little by little, federal programs, such a Medicare, SSD etc. impacting on the state WC programs.

Brad: Given expected easing of EPA and OSHA regulations in an energy friendly administration we should see expanded drilling and exploration in 2017. Traditionally these have been high payroll and high risk enterprises but they can present certain industry opportunities. I believe we will see a continued expansion of independent contractor relationships in the trucking industry with an increase in the number of large truck fatalities. That is a trend that has been unfolding for the last several years and will continue.

Q. What do these trends say, if anything, about the state of the workers’ compensation programs in the U.S.?

Brad: I tend to believe more states will review arbitrary limits set on TTD and wage loss benefits. Constitutional arguments that were brought forth in Florida and Oklahoma will be made in several other states where claimant's attorneys will now be emboldened by recently opened doorways. In 2016 an expanding list of Congressmen and Senators have expressed interest in the erosion of state workers compensation disability benefits to prevent a further cost shifting over to Social Security Disability programs. If nothing else, we should see congressional hearings to review the financial impact of recent state reductions in benefits.

Lora: Until the recent election I would have said that between the Affordable Care Act, Medicare, SSD etc., the state WC programs were in danger of erosion to the point where we would move to a federal WC program; however, with the recent election, I believe the state programs are alive and well and will continue to strengthen the benefits provided their injured workers.

Q. What is the state or states to watch in 2017 and why

Brad: Naturally the state that you watch most is the one nearest and dearest to your own financial interests. I suspect that the Oklahoma legislature will regroup to craft employer friendly legislation. Florida on the other hand will be highly motivated to quickly draft legislation to bring down a projected 19% premium increase and attempt to resolve a $1.5 billion unfunded liability. Florida will be a hub of legislative activity to watch.

Lora: I agree with Brad, Florida and Oklahoma are the states to watch; however, New York and North Carolina are also reviewing many aspects of their WC program and I think we are going to see some interesting issues come out of those two states as well.

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