Economy, legislative reform, aging workers highlight regional sessions
Regional Conflicts: Drilling Down to Unique Issues is a series of five concurrent sessions taking place Thursday, Nov. 8 from 10:45 a.m. to noon. The five regions are: Northeast, Southeast, Midwest, West, and California.
In each session, panelists representing the carrier, employer, and third-party administrator communities will discuss the impact of the recent economic downturn on the region and their particular area of the workers' comp system. Additionally, the panelists will discuss issues more specific to each region.
While the topics will be finalized shortly before the conference, several themes have emerged in discussions with the panels. The Midwest, for example, has recently seen the implementation of legislation designed to make states more business-friendly. What, if anything, has been the impact of the legislation?
Legislative impacts. Other than increasing settlement values, there has been no real impact, said one participant. States have not really become more employer-friendly despite what could be considered good legislation.
Part of the problem is that the arbitrators and judges have not changed and are still overseeing the system.
While the reforms look good on paper, enacting them effectively is the difficult part, the panelists said. That's especially true when the politicians in charge change.
In one state, for example, the governor charged with enacting legislative reforms was not the same as the one who signed the legislation. Changing political winds can have a major impact -- or lack thereof -- on how and whether legislation reforms are implemented.
One panelist noted that reform legislation in California a couple of decades ago made it easier to get workers' comp insurance but led to insurance carriers undercutting each other. Later, rates increased dramatically -- nearly doubling in some cases.
Changes that were anticipated from the legislation never materialized. "So changing the law may change things for a little while, but then things go back" to the way they were, one speaker said.
California's latest reform legislation, S.B. 863, will undoubtedly be discussed by the California panel. "It's a good bill, assuming it's not overturned," commented one panelist. "The savings, though, are anyone's guess."
Even if S.B. 863 does result in savings, the system's 136 combined ratio means there will likely still be rate increases, one speaker said. California's economy, which one participant described as being "in the doldrums," may be further affected by a vote against Gov. Jerry Brown's proposed tax hike, suggested one speaker.
With the session coming two days after the November election, panelists will know whether California voters approve the governor's proposed plan to hike income tax rates on high wage earners and the state's sales tax. A "no" vote could result in significant cuts in state services which, the panelists suggested, could make implementation of S.B. 863 that much more difficult. That, they say, could postpone anticipated savings indefinitely.
Communicating with injured workers has become nearly impossible in some states, at least, early in the claims handling process, suggested a speaker from the Southeast panel. State laws as well as case laws have resulted in requirements to send correspondence to injured workers with mandatory lead time, resulting in long delays. In some cases, that can mean six weeks of lost wages being paid to a claimant.
Opioids are another issue causing a particular problem for the Southeast, where some states are seeing the drugs traveling up from Florida and creating an opioid corridor, said one speaker. The personal economic plight of some injured workers is exacerbating the problem, as they may sell the drugs.
The economic realities facing older workers is causing particular problems for the workers' comp systems in many northeastern states, panelists said. With little or no retirement income, many are staying in the workforce longer than planned and using the workers' comp system to help fund their retirements.
The problem, the Northeast panelists say, is that many aging workers are staying in the workforce beyond when they are physically able and in jobs they are no longer capable of doing. The situation is complicated more by the Medicare set-aside factor.
Compounding the issues of aging workers are comorbidities, which transcend all age groups, one speaker said. Employers are increasingly asking for help getting their employees involved in health and wellness programs to address issues such as obesity, diabetes, and hypertension.
Finally, the shift away from construction in the Northeast has had a tremendous impact on premium income and the nature of claims, said one speaker. That industry may not be robust again for many years, perhaps a decade, which will further affect the workers' comp system in the region.
The 21st annual National Workers' Compensation and Disability ConferenceŽ
& Expo takes place at the Las Vegas Convention Center, Nov. 7-9. The conference is produced by LRP Publications.
For more information, visit the conference website at
Read more at the WorkersComp Forum homepage.
October 29, 2012
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