Changes within the Department of Government Efficiency (DOGE) could have negative economic repercussions for states that rely on a loophole that allows workers' compensation insurance carriers to benefit from Social Security Disability payments through reverse offsets. 
REVERSE OFFSET
A reverse offset is when workers' compensation (WC) benefits are reduced because the recipient also receives Social Security Disability Insurance (SSDI) benefits. In this scenario, the workers' compensation company or the employer benefits from the offset, not the Federal Government. This contrasts with the standard offset, where SSDI benefits are reduced due to WC benefits.
A reverse offset is when workers' compensation (WC) benefits are reduced because the recipient also receives Social Security Disability Insurance (SSDI) benefits. In this scenario, the workers' compensation company or the employer benefits from the offset, not the Federal Government. This contrasts with the standard offset, where SSDI benefits are reduced due to WC benefits.
REVERSE OFFSET STATES
Approximately 15 states utilize a reverse offset. Those states include Alaska, California, Colorado, Florida, Louisiana, Minnesota, Montana, Nevada, New Jersey, New York, North Dakota, Ohio, Oregon, Washington, and Wisconsin.
Approximately 15 states utilize a reverse offset. Those states include Alaska, California, Colorado, Florida, Louisiana, Minnesota, Montana, Nevada, New Jersey, New York, North Dakota, Ohio, Oregon, Washington, and Wisconsin.
THE ACE
Generally, the reverse offset ensures that the combined benefits do not exceed a certain cap, typically the Average Current Earnings (ACE). It is important to note that the specific rules and regulations governing reverse offsets can vary significantly from state to state.
Generally, the reverse offset ensures that the combined benefits do not exceed a certain cap, typically the Average Current Earnings (ACE). It is important to note that the specific rules and regulations governing reverse offsets can vary significantly from state to state.
ANTICIPATED DOGE IMPACTS
The Department of Government Efficiency (DOGE), led by Elon Musk, will significantly impact the Social Security Administration (SSA), by reducing personnel and office locations. Reports indicate that the SSA is preparing for substantial layoffs, potentially reducing up to 50% of its workforce. This translates to thousands of job losses within the agency, and delays in processing claims are expected. There are also plans to close numerous Social Security field offices nationwide. These changes are occurring as part of the Trump administration's efforts to reduce the size of the federal workforce through DOGE, which aims to cut what it deems as wasteful government spending. Eliminating the "reverse offset" aligns with DOGE's mission to reduce government spending.
The Department of Government Efficiency (DOGE), led by Elon Musk, will significantly impact the Social Security Administration (SSA), by reducing personnel and office locations. Reports indicate that the SSA is preparing for substantial layoffs, potentially reducing up to 50% of its workforce. This translates to thousands of job losses within the agency, and delays in processing claims are expected. There are also plans to close numerous Social Security field offices nationwide. These changes are occurring as part of the Trump administration's efforts to reduce the size of the federal workforce through DOGE, which aims to cut what it deems as wasteful government spending. Eliminating the "reverse offset" aligns with DOGE's mission to reduce government spending.
CONCERNS
These reductions raise concerns among advocates and lawmakers, who worry about the negative impact on the SSA's ability to serve beneficiaries. Some fear that wait times for services will increase and that access to benefits will be hindered. There is also concern about the access that DOGE has been granted to the personal information of those receiving social security. Social Security Disability claims are often complex, requiring medical documentation and thorough reviews. Reductions in experienced staff could lead to errors and delays.
These reductions raise concerns among advocates and lawmakers, who worry about the negative impact on the SSA's ability to serve beneficiaries. Some fear that wait times for services will increase and that access to benefits will be hindered. There is also concern about the access that DOGE has been granted to the personal information of those receiving social security. Social Security Disability claims are often complex, requiring medical documentation and thorough reviews. Reductions in experienced staff could lead to errors and delays.
In summary, the changes implemented by DOGE are expected to strain the SSA's resources, resulting in a less efficient and more time-consuming process for Social Security Disability claims. This will financially impact state workers' compensation systems, which now have the economic benefit of a Social Security reverse offset.
Additional Resources
Social Security Announces Cost Reduction and Enhancements Plan 03/19/2025
Social Security Strengthens Identity Proofing Requirements and Expedites Direct Deposit Changes to One Day 03/18/2025
Memo details Trump plan to sabotage the Social Security Administration 03/17/2025
The Social Security Administration says it plans to cut some 7,000 jobs NPR 02/28/2025
The Trump-Muskrat plot to kill Social Security Robert Reich 12/09/2024
Is The Reserve Offset Heading for Extinction? Workers'Compensation 03/09/2015
Social Security Strengthens Identity Proofing Requirements and Expedites Direct Deposit Changes to One Day 03/18/2025
Memo details Trump plan to sabotage the Social Security Administration 03/17/2025
The Social Security Administration says it plans to cut some 7,000 jobs NPR 02/28/2025
The Trump-Muskrat plot to kill Social Security Robert Reich 12/09/2024
Is The Reserve Offset Heading for Extinction? Workers'Compensation 03/09/2015
Letters from an American 03/08/2025
The People Trump and DOGE Hurt Joyce Vance 03/14/2025
Federal Judge blocks DOGE from accessing American's personal Social Security data, for now AP 03/20/2025
Federal of State County and Municipal Employee, AFL-CIO, et al. v Social Security Administration, Case 1:25-cv-00596-ELH, 03/20/2025
American Federation of State, County and Municipal Employees, AFL-CIO v. Social Security Administration (1:25-cv-00596) Court Listener Docket (updated daily)Lawsuits Related to Trump Admin Actions CourtWatch (updated daily)
Federal judge pushes back on acting Social Security head over threat to close agency WashingtonPost 03/21/2025Judge Ellen Lipton Hollender, USDJ, Letter to Counsel Regarding SSA Shutdown Threats 03/21/2025
Recommended Citation: Gelman, Jon., DOGE Changes: Workers' Comp Costs Rise?, www.gelmans.com (03/21/2025) https://workers-compensation.blogspot.com/2025/03/doge-changes-workers-comp-costs-rise.html
Updated: 03/22/2025
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ORDER NOW
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*Jon L. Gelman of Wayne, NJ, is the author of NJ Workers' Compensation Law (West-Thomson-Reuters) and co-author of the national treatise Modern Workers' Compensation Law (West-Thomson-Reuters). For over five decades, the Law Offices of Jon Gelman 1.973.696.7900
jon@gelmans.com has represented injured workers and their families who have suffered occupational illnesses and diseases.
Blog: Workers' Compensation
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