Two Years After Loper Bright: Workers' Compensation, the Administrative State, and a Coming Reckoning Over Social Security
Two years ago, on June 28, 2024, the United States Supreme Court reshaped the architecture of American administrative law. In Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), a 6 to 3 majority overruled the forty-year-old doctrine of Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). Courts no longer defer to a federal agency's reasonable interpretation of an ambiguous statute. Judges must now exercise independent judgment and arrive at the single best reading of the law. The anniversary is a fitting moment to ask a narrower question, one this blog has tracked from the start: what has the fall of Chevron meant for workers' compensation, and what does it portend as the nation's largest benefit programs approach a cliff?
How Workers' Compensation Is Touched at All
Workers' compensation is, at its core, a creature of state law. Fifty separate state systems, plus federal programs, set the rules for who is covered, what medical care is owed, and how much a disability is worth. A casual observer might assume a decision about a federal fisheries rule has nothing to do with an injured carpenter in New Jersey or a coal miner in West Virginia. That assumption is wrong.
The connection runs through the federal scaffolding on which state compensation systems quietly depend. Medical fee schedules in many states are pegged to Medicare reimbursement rates set by federal regulation. The Medicare Secondary Payer Act, 42 U.S.C. Section 1395y(b), forces every settling workers' compensation claim to account for Medicare's interests through Workers' Compensation Medicare Set-Aside arrangements, a regime built almost entirely on agency guidance rather than statute. Occupational disease causation often turns on exposure limits and science published by OSHA, NIOSH, and the EPA. In each of these areas, the rules that govern a state claim were written not by a legislature but by a federal agency interpreting an ambiguous statute, precisely the interpretations that Chevron once shielded and that Loper Bright now exposes.
The practical lesson is that workers' compensation is no longer insulated from the post-Chevron turbulence. When the rules that anchor a fee schedule, a set-aside calculation, or an occupational exposure standard rest on contestable agency readings, those rules become litigable in a way they were not before June 2024.
Litigation: The Set-Asides Front
The Medicare Set-Aside regime illustrates how the decision filters directly into compensation practice. WCMSA review thresholds, the recommended methodology for projecting future medical costs, and the very expectation that parties submit proposals to the Centers for Medicare and Medicaid Services flow from sub-regulatory guidance, not from the text of the Secondary Payer Act. As this blog observed when the decision first landed, that structure is now newly vulnerable.
A party dissatisfied with CMS's treatment of a set-aside can argue that the agency's interpretation is not the best reading of the statute, and a reviewing court is no longer obligated to defer. The companion decision in Corner Post, Inc. v. Board of Governors of the Federal Reserve System, 603 U.S. 799 (2024), compounds the exposure by allowing newly affected parties to challenge longstanding rules well beyond the traditional six-year window. Together, the two decisions invite litigants to test agency guidance that the compensation bar long treated as fixed, from set-aside thresholds to the coordination rules that govern how Medicare and a state award interact.
Agencies that interact with the compensation world have begun to respond. CMS and its sister agencies now defend their interpretations, knowing that a court will not simply accept a reasonable construction, which pushes them toward formal, notice-and-comment rulemaking supported by far more detailed administrative records intended to survive independent judicial review.
Legislation and Executive Action
Congress has not enacted a comprehensive response to Loper Bright, and the gridlock is itself significant. The decision assumed that an ambiguity in a statute is a problem for courts to resolve rather than a delegation for agencies to fill. Yet the Legislature has shown little appetite to write the precise statutes that a no-deference world rewards, leaving courts to define statutory boundaries case by case.
In the executive branch, the practical adjustment has been a retreat from informal guidance to formal rulemaking, as described above. The 2025 enactment of the budget reconciliation package, by reducing revenue from the taxation of benefits, also fed directly into the fiscal projections discussed below, a reminder that administrative-law doctrine and benefit financing are not separate conversations.
The Larger Reckoning: A Six-Year Fuse Under Social Security
The most consequential repercussions may arrive not in a compensation courtroom but in the financing of the broader safety net, and the timing is now acute.
The Social Security Board of Trustees, in its 2026 annual report released in June, projects that the Old-Age and Survivors Insurance trust fund will be depleted in the fourth quarter of 2032, roughly six years away and one quarter earlier than the prior projection. At that point, absent congressional action, the program could pay only what incoming payroll taxes cover, an automatic reduction of about 22 percent in benefits. The Medicare Hospital Insurance trust fund faces insolvency in the same window. The acceleration is driven by lower assumptions for births and immigration and by the 2025 reconciliation law, which trimmed revenue from the taxation of benefits.
Against that backdrop, the Speaker of the House, Mike Johnson, stated in June 2026 that entitlement programs, including Social Security, Medicare, and Medicaid, have to be adjusted and fixed, and that Republicans have a plan to do so next year. He offered no detail on whether that plan would raise the retirement age, trim cost-of-living adjustments, or reduce benefits for future retirees, approaches that have appeared in past proposals. Whatever its content, a plan to reduce benefits will not be self-executing. It will be written into statutes and implemented through regulations, and every contestable word will now be interpreted by courts exercising independent judgment rather than by agencies operating behind the shield of deference.
That is the meaningful repercussion of Loper Bright for the compensation community. A restructuring of Social Security and Medicare benefits would ripple directly into workers' compensation, where set-asides, Medicare coordination, disability offsets, and the basic adequacy of the disability safety net are bound up with the solvency of the federal programs. In the Chevron era, the agencies charged with administering benefit cuts would have enjoyed broad latitude to interpret ambiguous cost-containment language. In the Loper Bright era, that latitude is gone. Beneficiaries, employers, insurers, and the bar should expect that the coming fight over benefit reductions will be waged not only in Congress but in the courts, one statutory phrase at a time.
Conclusion
Two years on, Loper Bright has not rewritten any state workers' compensation statute. Its influence is structural. Stripping agencies of deference has made the federal rules that quietly underpin compensation practice more contestable, energized litigation over Medicare set-asides, and set the stage for a high-stakes confrontation over Social Security and Medicare as a six-year insolvency clock runs and congressional leaders openly discuss reductions. The practitioner who treats administrative law as someone else's concern does so at the client's peril. The decision that began with a fishing rule now reaches the heart of how injured and disabled workers will be protected for a generation.
Sources
1. Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024) (CourtListener)
2. Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984) (CourtListener)
3. Corner Post, Inc. v. Board of Governors, 603 U.S. 799 (2024) (CourtListener)
4. Medicare Secondary Payer Act, 42 U.S.C. Section 1395y (Cornell LII)
5. 2026 Social Security Trustees Report, Bipartisan Policy Center analysis
6. Committee for a Responsible Federal Budget, Trustees Report analysis
7. Speaker Johnson on entitlement reform (NJTODAY.NET, June 2026)
About the Author
Jon L. Gelman of Wayne, NJ is the author of NJ Workers' Compensation Law (West-Thomson-Reuters) and co-author of Modern Workers' Compensation Law (West-Thomson-Reuters).
Blog: Workers' Compensation | LinkedIn: JonGelman | Substack: jongelman.substack.com | Blue Sky: jongelman@bsky.social
© 2026 Jon L Gelman. All rights reserved. | Attorney Advertising | Prior results do not guarantee a similar outcome.
No comments:
Post a Comment