Archive for April, 2013

What if Workers Purchased Their Own Comp Insurance?

April 5th, 2013 No comments

Your humble blogger invites you to take a break from the possibly useful posts you might find on this humblest of blogs, and to entertain a crackpot idea which Sacramento may want to consider the next time California goes through its Workers’ Compensation Reform dog and pony show.

Right now, your average employer in California either has to buy insurance or Self-Insure, either on its own or through a self-insured groupUnlike Texas and (maybe someday) Oklahoma, Californians aren’t too keen on the idea of allowing employers to opt-out.

California’s workers’ compensation system is a “no-fault” system (except for the employer – it’s your fault no matter what you do).  That means that Jack, your habitually hung-over, frequently clumsy, and obviously reckless employee inflates your policy by the same price as John, your careful, diligent, and experienced employee.

It doesn’t matter if Jack gets another injury every month as he trips over yet another object while walking-and-texting, and Jack has never been injured because he’s always bending with his knees and not his back, or focusing on what he’s doing instead of skipping through fantasy-land.  Jack would keep your experience modification high while John would reduce it, and you’d get your rate set every year.

What if John could buy his own workers’ compensation policy and not be included in yours?  What if his diligence, his lack of DUI convictions, and his many years of working without sustaining any sort of injury could get him a really cheap policy (not unlike an auto insurance policy)?  In fact, because John is saving you so much money, you could offer to split the difference with him, and then maybe he’d get to pocket some of the money as a reward for being so diligent.

Now, in industries where serious injuries are fairly common, like in construction and roofing, this plan might not work as the economies of scale would be your best bet for a lower price.  But what about the office-related industries?

Basically, by allowing a worker to purchase his or her own workers’ compensation policy, and allowing that workers’ employer to not cover them, we might create a system by which the really careful employees get to save the money that they are currently saving their employer or insurer.

Just another crackpot idea from your humble blogger… perhaps we could try it alongside the current system?

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The Cruel Bite of 5500.5

April 3rd, 2013 No comments

The Cruel Bite of Labor Code section 5500.5

Hello, dear readers!  As some of you are recovering from your Easter Egg hunts and others are getting ready to buy up the temporarily discounted but always delicious Cadberry Eggs, your humble blogger stands (or sits) vigilante and determined to report to you the victories and vices, the happiness and horror, the good and the bad of California’s wonderful workers’ compensation system.

As my sharp and well-read readers recall, Labor Code section 5412 defines the “date of injury” for cumulative trauma – the first date that the employee suffers disability from an injury, and knows or should have known that the disability was caused by his or her employment.  In other words, the moment the light bulb goes off in that nuclear plant worker’s head that maybe the nuclear plant is causing him to glow in the dark (if one can call that awesome skill suffering a disability).

Homer Simpson Thinking

Meanwhile, Labor Code section 5500.5 limits liability for cumulative trauma to those insurers/employers that employed the (allegedly) injured worker for one year prior to the earlier of (1) the date of injury; or (2) the last date of harmful exposure.

We see this in asbestos cases a lot – you could have a worker not suffering any noticeable injury for many years after the last harmful date of exposure.  We see this in repetitive action cases too – a worker could suffer a disability, like a strained back with time off, and then return to work and continue working (and continuing the harmful exposure).

And so, I bring to your attention the recent panel decision in the matter of Debra Crawford v. Guidant Corporation.  Ms. Crawford was found to be totally permanently disabled due to a cumulative trauma sustained while employed by Guidant.  Guidant, during the relevant period, was insured by two insurers (one after the other, of course) – One Beacon and Reliance.  When Reliance followed the Titanic under the water’s surface, CIGA stepped in to lock shields with One Beacon and repel the claim… not so much.

CIGA, the California Insurance Guarantee Association, is the insurer for last resort in cases where the proper insurer is no more.  However, CIGA will not step in and pay out unless it is the ONLY insurer – if another is available, CIGA bows out, even if the other insurer covered just one day of the 365 under Labor Section 5500.5, and the other 364 days were covered by a now insolvent insurer, the 1-day insurance company gets to absorb the entire claim.

Naturally, in the Crawford matter, the coverage dates for the injury were important.  After all, a person who is 100% permanently disabled basically gets temporary total disability benefits for the rest of his or her life.

One Beacon successfully proved at trial that the “date of injury” should be considered December 9, 1996, which was applicant’s last date of harmful exposure and employment.  Because One Beacon’s actual coverage of Guidant ended on September 1, 1995, there was the feeling of relief and a bullet dodged… until the ricochet came from the Workers’ Compensation Appeals Board.

Granting CIGA’s petition for reconsideration, the WCAB found that applicant’s 5500.5 liability period actually ran from August 22, 1995-1996, because applicant’s first suffered disability was a temporary disability order from August 1996.  So in One Beacon’s case, coverage of 10 days out of the year for Guidant landed them with 100% of the liability for medical treatment and temporary disability benefits that will last as long as the applicant does.

If CIGA were not involved, One Beacon could grumble as it paid 3% of the costs and watched as the balance was carried by the other insurer (or insurers).  Instead, it’s forced to weep uncontrollably and curse the name of the long-gone (and ironically named) Reliance Insurance Company as it carries the full load.

But don’t worry – Beacon will recover these costs through its premiums, and the businesses that pay those premiums will recover their costs from you and me, the California consumer.

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BREAKING! Governor Brown Files Workers’ Comp Claim; 132a

April 1st, 2013 No comments

The post previously scheduled for today has been delayed upon your humble blogger receiving word that Governor Jerry Brown, the 2nd, 14th, 34th and 39th Governor of California, has filed a workers’ compensation claim before the Sacramento Workers’ Compensation Appeals Board, demanding all benefits and claiming 132a discrimination against the State of California.

Kamala Harris, California’s Attorney General, has vowed to personally represent the State of California against what she called “Jerry’s baseless claims.”  When asked about her experience in workers’ compensation matters, Ms. Harris noted that she is vaguely familiar with Employment Law, but as a regular reader of a workers’ compensation defense blog which she declined to name absent a sizable re-election campaign contribution, she feels perfectly competent to obtain what she called a “don’t take anything” order.

Governor Brown’s Application for Adjudication of Claim, which this blog was able to secure for its readers, claims injury to the psyche, carpal tunnel syndrome from signing various workers’ compensation bills into law, and a vague, hand-written injury which closely resembles the words “it hurts all over.”  The 132a petition appears to be based on failure to alleviate his stress claim, which entails all Sacramento workers referring to him as “the Big J.”

A copy of the application is available to download here.

His attorney’s office, the Sacramento branch of Whey, Cheatum, and Howe (EAMS No. 81154141), declined to comment except to mention that the attorney has not yet met with Governor Brown, but expects to call out his name randomly at the next hearing and hope that his client has appeared.

As your humble blogger becomes aware of more facts in this case, so will you.  For now, we can expect California politics to come to a stand-still as further details become available to the general public.

Jerry Brown

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