Workers' Compensation: Pension

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Thursday, September 1, 2011

Who Is Paying the Premiums for Workers Compensation Anyway

Employes have been subject to "give backs" and "add on" costs for decades, but now employers want to shift the cost of workers compensation insurance to employees. The intent of the workers' compensation act was to shift the costs of workers' compensation coverage to the consumer of the product and/or user of the service and not the employee.

A recent Massachusetts Judge reiterated that principle, but left open the question as to whether the employee could consensually contract to accept the costs of workers' compensation coverage. If this occurs, it is ultimately a "deal breaker."

Cost shifting of workers' compensation coverage is a dangerous precedent going to the heart of the initial promise made to workers in creating the system. Is is against "public policy," and defeats the Legislative intent of the act. While the economy is soft and the workers' compensation system in a weakened condition it is not time to abandon ship unless a more creative approach for reform of the entire system comes into play. As jobs remain scarce, the process would not be consensual, but merely coercion. Shifting the cost would ultimately remove the deterrent effect for unsafe workplaces, and yet is another reason why employers and ultimately consumers should remain responsible for workers compensation costs.

See: Awuah v. Coverall North America, Inc.,--- N.E.2d ----, Mass. , 2011 WL 3805255, Mass., August 31, 2011 (NO. SJC-10829)

For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900 jon@gelmans.com have been representing injured workers and their families who have suffered occupational accidents and illnesses.

Monday, August 29, 2011

Pensions, Workers Compensation and Medical Benefits

The State of New Jersey has taken assertive action to guarantee medical benefits to injured workers for their lifetimes even though they are receiving accidental injury pensions. The Director has issued an Administrative Directive requiring language to literally toll the statute of limitations and permit the Division of Workers' Compensation to retain jurisdiction over such matters where the injured worker has accepted the continuing medical benefit option.

"Petitioner has been awarded and accepted an accidental disability pension effective _(date)_. To resolve the workers' compensation case, petitioner and respondent have agreed to provide petitioner with reasonable and necessary medical treatment for injuries related to the _(date)_ accident. This Order for continuing medical benefits shall not be subject to the two year statute of limitations and such medical benefits shall continue for the life of the petitioner or until further order of this court."

By statute, workers' compensation awards are offset by pension awards. The medical issue remains open usually and medical benefits remain the responsibility of the employer. The medical issue becomes a complication when costs are attempted to be shifted to collateral medical carriers or Medicare. The subsequent reimbursement issue then generates medical lien claims that must be litigated. The incorporation of the language will greatly clarify responsibility and expedite medical care and payment.

For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900 jon@gelmans.com have been representing injured workers and their families who have suffered occupational accidents and illnesses.

Thursday, August 18, 2011

State Acts to Restrict Medical Care

The State of NJ has proposed sweeping regulations to limit the payment of medical care under automobile insurance policies, and this action is seen as yet another signal that workers' compensation medical delivery may become even further restricted. In an effort to reduce insurance premiums, the NJ Department of Banking and Insurance, has proposed massive changes in the manner and method that doctors may bill for medical treatment and diagnostic procedures and has restructured the process for appealing a denied claim.

The State claims that medical delivery costs are soaring. It has been reported that for every premium dollar that insurance companies receive, they end up spending $1.23 on medical benefits. The regulations are designed to reduce medical services and produce a profitable insurance product.

Furthermore, the purpose of the regulations are to limit legal costs. The sate reported that in one instance a contested medical resulted in the payment of $375 in medical benefits, but the legal costs awarded for that recovery were $3,380.

The regulations prohibit the use of innovative radiological diagnostic testing. "X-ray digitization or computer aided radiographic mensuration reported under CPT 76499 or any other code are not reimburseable under PIP."

The comment period for the new rules runs thorough early September 2011. The impact of the regulations is to reduce medical care and diagnostic procedures that will impact resulting workers' compensation benefits. Ironically providing the best medical benefits available would seemingly comply with the intent of the compensation act and ultimately economically benefit the employer by producing a healthy workforce, The process of cost cutting will only ultimately degrade the medical delivery component of workers' compensation even further.

Friday, August 5, 2011

Bad Faith Claims Maybe Going to the Jury

The NJ Supreme is going to review the procedure to bring bad faith claims against employers and insurance companies in workers' compensation actions. The Court accepted for review a case holding that workers' compensation bad faith claims are within the exclusive jurisdiction of the workers' compensation hearing official.

The case involves an injured worker who filed a civil action against his employer's workers' compensation insurance company for failing to comply with the Division of Workers' Compensation Order that medical treatment should proceed. The employee alleged that the delay and denial of medical care caused harm. The lower court had rejected the case and dismissed it holding that the jurisdiction for bad faith is exclusively within the purview of the Division of Workers' Compensation. Stancil v. ACE USA, 418 N.J. Super. 79, 12 A. 3rd 223 (App. Div. 2011), ___A.3d___, 2011 WL 3342730 (NJ). Decided June 7, 2011.

In another decision, the NJ Supreme Court held that bad faith, in a negligence action, was a contractual issue giving rise to a factual question that could only be decided by a jury.

"We conclude that a Rova Farms claim that an insurer in bad faith failed to settle a claim within the policy limits, thereby in fact exposing its insured to liability for any excess, represents a traditional contract claim that the insurer breached the implied covenant of good faith and fair dealing and to which the right to trial by jury attaches." Wood v. New Jersey Manufacturers Insurance Company, 21 A.3d 1131, 2011 WL 2314954 (NJ), Decided June 14, 2011.

The Stancil case highlights one of the most serious and costly issues in Workers' Compensation, both in NJ and the nation, the adequate and efficient delivery of medical care. While the courts are struggling with this issue that is compounded by arguments over reimbursement and treatment paths, the compensation system continues to be bogged down and unresponsive to the urgency of the need to delivery medical care to injured workers.

Wednesday, July 20, 2011

The Setoff Nightmare: The Pension Well Runs Dry

Over the past decades of reform, legislatures throughout the United States have established rules and regulations to offset pensions from workers' compensation benefits chasing off potential claims. Now faced with economic stress, public entities are following the path of private companies, and about to default on pension payments.

The NY Times reports today that a town in Rhode Island has asked 19,000 pension beneficiaries to forgo their pension benefits. The program is called, "The Big Ask."

The consequences are severe. The claimants who failed to file for workers' compensation benefits because they were scarred off by potential bankruptcy setoffs from their workers' compensation awards, and now being left out in the cold. Injured workers are now barred by the statute of limitations from collection compensation.

Legislatures must consider this adverse consequence. Modifications in State laws are now required to protect workers from this contingency. Laws should be modified to permit a tolling of the statute of limitations so that workers in the future will not be asking why their rights for workers' compensation benefits were stolen.

For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900 jon@gelmans.com have been representing injured workers and their families who have suffered occupational accidents and illnesses.

Tuesday, July 12, 2011

Workers Compensation, Pensions and Bankruptcy

The rush to offset everything from workers compensation awards, including pensions, may cause some injured workers, to their longterm detriment, not to pursue a compensation claim. Should the pension be compromised in the future for lack of funding, as what is happening in a municipality in Rhode Island, then the injured worker maybe unable to seek workers' compensation because of a waiver for failing to file a claim originally. Injured workers and the attorneys may need to rethink their strategy for workers compensation.

Wednesday, May 25, 2011

NJ Pension System Not Permitted to Deduct Counsel Fee From Workers Compensation Recovery

The NJ State Police Retirement System is not permitted to deduct the workers' compensation counsel fee allocation from the worker's accidental disability retirement allowance.

"We are persuaded that the Board cannot offset petitioner's accidental disability retirement allowance under N.J.S.A. 53:5A-38.1(b) by the amount of the attorney's fee payment credit to petitioner because that payment does not constitute a compensation benefit under our workers' compensation law. The fact that petitioner may have received the attorney's fee payment from his employer in the form of a credit does not change the legal status and convert that payment into a periodic benefit subject to triggering the application of N.J.S.A. 53:5A-38.1(b)."

Baracia v. Board of Trustees of the State Police Retirement System, A-3611-09T2, 2011 WL 1885937 (NJ Super AD 2011) Decided May 13, 2011.

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