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Saturday, June 4, 2011

Illinois Punishes Workers for Employer Deceit

The efforts by employers, insurance carriers and the Chamber of Commerce in Illinois, to take away the rights of injured workers and strip them of benefits may have all been based on Industry fraud. Recently obtained documents, secured under the Illinois Freedom of Information Act (FOIA), reveal that the employer’s own doctor had in-fact validated the causal relationship of the medical claims of the injured workers to work. 


A campaign in Illinois by Industry to dismantle the State’s workers’ compensation system was triggered and flamed by a story appearing in a local newspaper asserting that several correction officers had filed fraudulent claims for repetitive motion trauma to their hands. The local news report insinuated that the claims could not have been credible. 

The story, for some suspicious reason, was disseminated in a viral manner on the Internet. Concurrently, the Illinois Chamber of Commerce went on the attack claiming that the workers’ compensation system in Illinois was loaded with fraudulent activities. The Chamber and employers lobbied for legislation to strip injured workers of what little rights they still had under the law. The statutory changes they sponsored reduced ill workers access for benefits, reduced medical treatment expenditures by 30%, and set up a series of hurtles that left the injured without remedy to cure and relieve conditions caused by work. 

Even that wasn’t enough. Supporters of the Industry’s draconian legislative effort, have now vowed to return to take away the basic promises granted workers a century ago, that injured workers could obtain the limited and capped scheduled benefits, under a no-fault system. The workers’ compensation system was intended to provide a remedial and expeditious benefit to injured workers in a summary and efficient fashion, without the element of fault being considered. 

A hidden report reveals that Anthony E. Sudekum, MD, a Board Certified Hand Surgeon, retained by the employer, State of Illinois Department of Corrections, on March 30, 2011, after and extensive review of the facts, circumstances, inspection of the premises and equipment, and examination of the employees, concluded that, on the job activities contributed to their illness. He wrote, “…I feel that ….work activities at Menard Correctional center served to aggravate…bilateral carpal tunnel syndrome and left ulnar neuropathy.” 

Furthermore, some contend that the neurological illnesses that appeared at the Menard Correctional Center may have been the result of a mysterious disease cluster that warrants much further investigation instead of a knee-jerk denial. Similarly, a mysterious outbreak of disease in Philadelphia ultimately resulted in the discovery of Legionnaires Disease. Today the US Centers for Disease Control continues to investigate worldwide clusters of gastro-intestinal conditions to determine their potential causal relationship. It is through continued medical research and investigation that we make the workplace healthier, safer and more productive. 

We should learn from history. In the past, employers and manufacturers were also caught intentionally concealing the hazards of asbestos, tobacco and lead paint. That left a legacy of disease and death, and billions of dollars of economic loss. One would think that everyone learned from those tragic mistakes. For our nation to survive, employers must take an active roll in improving the health of our workers, and build a stronger system, rather than just deny the hazards of the workplace and blame the injured.

Monday, May 23, 2011

Safer Chemical Industry WIll Produce More Jobs


A new economic study shows that that by shifting a fifth of the plastic production to bioplastics the industry would be safer and the action would result in creating more than 100,000 new jobs. Creating new markets in sustainable chemistry would enable the US chemical industry to remain competitive in the global economy and would result in a cleaner and more productive industry. Therefore there would be fewer workers' compensation claims caused by occupational exposures to hazards of the chemical industry.

The study released today shows, for the first time, that federal chemical policy reform can support job creation in the U.S. chemical industry while protecting public health and the environment. The study, produced by the Political Economy Research Institute (PERI) and commissioned by the BlueGreen Alliance, shows that innovation in sustainable chemistry can reverse the industry's job shedding trend in a market that increasingly requires cleaner, safer production.

The new report - The Economic Benefits of a Green Chemical Industry in the United States: Renewing Manufacturing Jobs While Protecting Health and the Environment - demonstrates that the U.S. chemical industry shed 300,000 jobs since 1992, despite production increasing by 4 percent per year. Under the current scenario, the industry stands to lose approximately 230,000 jobs in the next 20 years. But contrary to arguments that chemical policy reform will cost jobs and stifle innovation, the report demonstrates that innovation in sustainable chemistry presents new opportunities to reverse the job shedding trend. For example, if 20 percent of current production were to shift from petrochemical-based plastics to bio-based plastics, 104,000 additional jobs could be created in the U.S. economy.

"This report charts a different course to update and revitalize an industry so important to our security," said Leo W. Gerard, International President of the United Steelworkers (USW), which represents some 30,000 chemical workers in North America. "Instead of our members losing quality jobs in the chemical industry and accepting the myth that policy reform will somehow cost more jobs, TSCA reform will create sustainable, good-paying jobs while protecting the health of workers and the environment by encouraging investment in education, technology and research."

The Economic Benefits of a Green Chemical Industry argues that the U.S. chemical industry has relied on cost cutting to remain profitable, which has eliminated American jobs, while under-investing in innovation. The industry spends just 1.5 percent of sales on research and development, compared to 3.4 percent for the manufacturing sector as a whole. By taking clear steps toward sustainable production, spurred by chemical policy reform like the Safe Chemicals Act of 2011, the U.S. chemical industry will become more competitive by: lowering costs for the industry and downstream users, ensuring access to important global markets, reducing waste by using inputs more efficiently, curtailing future cost pressures from non-renewable fossil-fuel inputs, meeting demands from consumers for safer products, protecting shareholder value, and encouraging research and development of innovative products.

"This study shows that an effective regulatory environment will support the chemical industry's ability to take advantage of new markets in sustainable chemistry," said James Heintz, Associate Director of the Political Economy Research Institute. "Either we can continue with weak and ineffective regulation - continuing to produce potentially hazardous chemicals while manufacturing jobs disappear - or we can move toward disclosure, regulation, and sustainability; encourage innovation; create stability for businesses and investors; and build new markets for safe and sustainable chemicals."

The report makes three recommendations to build a stronger chemicals industry. First, it recommends reforming TSCA to create an effective new regulatory environment that reduces hazards and supports innovation and competitiveness. The second recommendation is to implement complementary policies to promote innovation, commercialization, and the development of human resources to create a greener and safer chemical industry. Finally, it recommends disseminating environmental and health-related information on the chemical industry as widely as possible to improve the choices available to consumers, workers, downstream users, and investors and to mobilize investment in emerging opportunities.

"The prevalence of toxic chemicals in our everyday lives threatens public health and the environment," said Frances Beinecke, President of the Natural Resources Defense Council, a partner in the BlueGreen Alliance. "Chemical policy reform will ensure that the Environmental Protection Agency has the power to protect people from dangerous chemicals."

"The United States is searching for answers to our unemployment crisis and this report - demonstrating the job-creating potential of chemical policy reform - shows that embracing sustainable chemistry provides just the opportunity our economy needs, while protecting the health of our people and our environment," said BlueGreen Alliance Executive Director David Foster.


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, May 9, 2011

Majestic Insurance Files for Bankruptcy

Another workers' compensation insurance company has filed for bankruptcy protection. Majestic Capital Limited, has filed for Chapter 11 with over $50 Million in liabilities.

In re Majestic Capital Ltd, 11-36225, U.S. Bankruptcy Court, Southern District of New York (Poughkeepsie).

Majestic Capital, Ltd. (Majestic Capital) (Nasdaq: MAJC) today announced that on Friday, April 29, 2011, it commenced bankruptcy proceedings by filing a petition under Chapter 11 of the US Bankruptcy Code. Such filing was made in the United States Bankruptcy Court for the Southern District of New York (the "Court") and was assigned case no. 11-36225.

Simultaneously with such filing, the following Majestic Capital subsidiaries also commenced bankruptcy proceedings under the jurisdiction of the Court by filing petitions pursuant to Chapter 11 of the US Bankruptcy Code under the case numbers indicated below:
Name of Subsidiary  Case No.

Majestic USA Capital, Inc. 11-36221
Compensation Risk Managers, LLC 11-36226
Compensation Risk Managers of California, LLC 11-36230
Eimar, LLC 11-36232
Embarcardero Insurance Holdings, Inc. 11-36234

Majestic Capital and its above-mentioned subsidiaries remain in possession of their respective assets and business, but subject to the supervision of the Court.

Trading in Majestic Capital's common stock on the Nasdaq Capital Market was halted today, and shall remain halted through the effective date of Majestic Capital's voluntary delisting pursuant to the notice of delisting that it filed with the SEC on April 29, 2011.

About Majestic Capital, Ltd.

Majestic Capital, through its subsidiaries, is a specialty provider of workers' compensation insurance products and services. Further information aboutMajestic Capital and its business can be found on Majestic Capital's website at http://www.MajesticCapital.com.

Monday, May 2, 2011

Inconsistent Enforcement of State Wage and Hour Laws Could Lead to "Regulatory Race to The Bottom, " New Study Finds

The National State Attorneys General Program at Columbia Law School has issued a report on state wage and hour law enforcement, analyzing survey responses from 37 states and the District of Columbia. Workers' compensation benefits are usually determined by the amount of wages paid to the injured worker at the tie of the accident. Low wage reduce the amount of workers' compensation benefits to be paid.

The study is the first of its breadth and depth to be conducted on a national scale, and includes an objective analysis of wage and hour enforcement on the state level, measuring the methods and extent of enforcement, and the ability of states to track and share data on wage and hour enforcement. It is based on data available in the fall of 2010.

As the report notes, while 45 states have minimum wage laws, the mere existence of such laws does not mean they are followed. “Without meaningful enforcement by state regulators, some employers will simply disregard their legal obligations if doing so allows them to save time, money or effort, putting the majority who wish to abide by the law at a significant competitive disadvantage,” the report warns. “This creates a regulatory race to the bottom by states as they seek to compete to attract businesses.”

Among the study’s key findings:
·        Most states surveyed saw a significant increase in the number of low-wage workers in 2009. That increase was often matched by corresponding cuts or freezes in resources devoted to wage and hour enforcement. Alleged violations over pay for low-wage workers generate the most wage and hour complaints.
·        The degree and scope of wage and hour enforcement varies widely among the states. Some state labor departments have more comprehensive mandates, which include oversight of child labor, worker training, and employment discrimination, while Alabama, Georgia, Louisiana, Mississippi and Florida have no state agency that enforces wage and hour standards. In these states, complaints are referred to the federal government or private attorneys.
·        The most common way that states identify potential wage and hour violations is via individual complaints by employees. Of the few states that engage in more proactive enforcement, their primary focus was violations of prevailing wage laws—which establish wages for public works projects—and employee misclassification laws—which aim to prevent employers from evading wage and hour and other labor laws.
·        The number of complaints trailed off as the recession began in 2008, which the study suggests could be linked to employees being more hesitant to challenge employers in the midst of harsh economic conditions. Wisconsin noted specifically that it had experienced lower complaint totals during prior economic slowdowns.

The study was conducted by attorneys Jacob Meyer ’09 and Robert Greenleaf, under the direction of James Tierney, director of the National State Attorneys General Program. Funding for the study came from the United Brotherhood of Carpenters, International Brotherhood of Electrical Workers and other unions, as well as employer groups such as the National Electrical Contractors Association.

The report does not issue any recommendations other than to call for more research by states and other stakeholders about how to improve wage and hour enforcement, especially in the face of sharply curtailed state budgets.

“We realize the fiscal realities faced by the state, but this is one area that can’t be ignored,” said Tierney, who served as Maine’s attorney general from 1980-1990. "But without sufficient enforcement, families, law abiding businesses and the communities where they live in will be hurt. That would only be a further drag on the economy. We hope that this report will stimulate discussion and result in increased state-by-state research on the effectiveness of state wage and hour enforcement."

The report can be found below:

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.

Friday, February 18, 2011

From Doughnuts to Workers Compensation Dollars

The failure to provide complete subsidies for prescription-drug coverage will indirectly continue to have an adverse financial impact on soaring workers' compensation costs. The Affordable Care Act (ACA) enacted in March 2010 has attempted but not completely removed the so-called "doughnut hole."


The aging workforce continues to increase as a result of both the economic downturn, as well a a dramatically increased retirement age. Furthermore, the increase in the denial rate of occupational conditions, some caused by latent disease, has increased to the number of beneficiaries on the Medicare system. Medicare continues to seek reimbursement through the Medicare Secondary Payer Act of conditional secondary payments to potential workers' compensation beneficiaries.


Those who elect Part D coverage, after the yearly deductible ($310) , are entitled to contribution from the Federal program for up to 25% of additional medical costs. Once they enter "the gap" in coverage ($2,840 to $4,550), the beneficiary is responsible for 100% of prescription costs. 


William H. Shrank, MD, M.S.H.S and Niteesh K. Choudhry, M.D., Ph.D., point out in their recent article in the New England Journal Of Medicine, that the present "doughnut hole system" results in seniors not taking prescribed medication because of the inability to pay dor drugs. The failure to deliver prescription care to seniors will ultimately result in an unhealthier workforce that the workers' compensation system will have the potential indirect responsibility to pay for. The cascading and progressive complications of underlying disease will have systemic negative health consequences for the aging workforce, and ultimately their employers, and their workers' compensation insurance coverage.
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Sunday, November 14, 2010

USPS May Declare Bankruptcy Citing High Workers Compensation Costs

A small United States Postal Service truck see...
The Washington Post reported Saturday that the US Postal Service (USPS) may declare bankruptcy and cited high combined benefit costs as a major cause for its financial instability.  The quasi-governmental agency is running into problems it claims because of its requirement to to pre-fund $5.4 billion to a retiree health benefit fund and pay $2.5 billion to the federal workers' compensation fund.

The USPS's troubles mirror that difficulties stangulating the nation's network of state workers' systems caused by the inability to fund soaring medical costs enhanced by complications caused by duplicate administrative costs engulfed by a multiplicity of collateral programs. In contested claims injured workers are shifted to other benefit programs to pay for medical costs. Those secondary programs ultimately seek reimbursement from the primary benefit program, workers' compensation coverage, and literally clog up administrative dockets and create greatly enhanced processing costs and monumental delays.

While the USPS will seek assistance from the Republican majority in
US Congress, it is uncertain what financial aid will be forthcoming, or whether Congress will take a deeper look at the nation's workers' compensation entirely. The last time the Republican's dominated Congress proposals were suggested by the former Speaker, Newt Gingrich, to over haul the national system entirely.

The medical component is now in critical condition. It remains uncertain if it will addressed in the next congressional term, or whether it will be the can that is kicked down the road to be dealt with in the future. The growing trend remains, that Federalization of the medical delivery component is the probable  solution to both the USPS's compensation difficulties as well as the the nation's.

...
For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900jon@gelmans.com have been representing injured workers and their families who have suffered work related accident and injuries.

Tuesday, September 7, 2010

NJ Workers Compensation Payments to Decrease

For the first time in history, the NJ workers compensation benefit rates are going to decrease. The maximum benefit rate will decrease 0.3% from $794.00 to $792.00 per week.


The 2011 maximum workers' compensation benefit rates for temporary disability, permanent total disability, permanent partial disability and the dependency rate are based upon the States's Average Weekly Wage (SAWW) for the year prior. New Jersey currently provides for a maximum benefit of 75% of the statewide average weekly wage (SAWW). 


The New Jersey maximum rate has been considered significantly low when compared to to other states and perennially a higher adjustment has been recommended.  

The rate applies to those work related injuries and deaths that occur in 2011. NJ ADC 12)2351.6, 42 N.J.R. 1994 (a). In 2007 the rate rose a modest 2.7 %.

Historically, NJ maximum workers' compensation has only risen yearly over the decades. The 2011 announced decrease represents a major slow down in the State's economy. Despite the announced fall in scheduled disability rates, the cost of soaring medical treatment remains uncapped and its economic impact remains uncertain in an era of declining payrolls and lower premium collections for compensation benefits.
Related Articles:
For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900 jjon@gelmans.com have been representing injured workers and their families who have suffered occupational illnesses. Author NJ Workers Compensation Law (West).

Friday, August 27, 2010

Slow Economic Grown Forecasts Dismal Future for Workers Compensation

Quarterly Gross Domestic Product (year-on-year...
The announcement today of slower economic growth predicts a gloomy future for the US Workers' Compensation industry. A 2nd Quarter growth rate of 1.6% is far below the minimum 2.5% rate necessary to halt the increasing numbers of unemployed workers.


The US workers' compensation industry is dependent on premiums, based on wages, paid to workers. A lack of workers on payrolls stalls the economic engine necessary to fund the system. The predictable response is an increase in rates chargeable to fewer employees in a time when the country faces a predictable deflation rate in advance of potentially soaring rates based upon inevitable inflation resultant from increased governmental spending. Seven more years, at a minimum of high unemployment has been predicted.


Compounding the scenario is the fact that the historical pattern of the past will most likely not allow for a major rebound as the facts of economic growth, globalization and transfer of manufacturing overseas has devastated the base of growth for the national workers' compensation system. 


Click here for more information on how Jon L Gelman can assist you in a claim for workers' Compensation claim benefits. You may e-mail Jon  Gelman or call 1-973-696-7900.


Related Articles
Is The Recovery Of The Workers’ Compensation System An Illusion?

Monday, February 23, 2009

Is The Recovery Of The Workers’ Compensation System An Illusion?

The present economic downturn has been compared to the Great Depression of the 1930’s or the recession of the 1980’s. The factors that existed during those financial cycles need to be compared to the present political and economic dynamic to determine whether or not history is repeating itself. Analysis of those two periods provides an insight as to whether or not there will be a rebound or surge of claims in the future.

The depression of the 1930’s occurred at a time when the workers’ compensation program in the United States was in its infancy. The benefits delivered were very limited. Occupational diseases were not included in most acts, the population had a lower life expectancy, early retirement plans did not exist, social security was not yet enacted, and Medicare was only an idea. The federal government poured dollars into the economy to construct public works [
WPA] projects while limiting private debt. A consumer based economy didn’t exist at the time of the Great Depression.

Likewise, the recession of the 1980’s had its own characteristics. During the 1980’s, the populations mostly affected by layoffs were those who were the labor force of post-World War II. The workers of that generation suffered from occupational exposures to many deleterious and carcinogenic substances. The occupational diseases were latent in manifestation and epidemic in proportion. Laid-off workers who became victims of the recession of the 1980’s participated in a surge of litigation, both workers’ compensation claims and third-party actions against the manufacturers of toxic substances. Litigation snowballed against , including
asbestos manufacturers, suppliers and distributors because of the minimal money recovered in the ordinary workers’ compensation claim. Asbestos litigation became “the longest mass tort in history.” In the years following the 1980’s the many workers separated from their jobs did not return to employment. Instead they collected both workers’ compensation benefits and Social Security disability.

The medical costs incurred, due to their occupational illnesses, were intentionally
shifted from the workers’ compensation program to the Social Security Medicare program. The Medicare Secondary Payer Act was enacted by Congress in 1980 to end the cost shifting tactics by employers and their workers’ compensation insurance companies programs, Medicare and health group coverage, and pension offsets.

The current workforce,
now being laid-off, is composed of an entirely different demographic than what existed in the 1930s and the 1980s. The social and political factors at the present time are far different from what was facing the workforce of the prior recession/depression years. The US Bureau of Labor Statistics reported, “In January 2009, the unemployment rate of persons with a disability was 13.2 percent, compared with 8.3 percent for persons with no disability, not seasonally adjusted. The employment-population ratio for persons with a disability was 20.0 percent, compared with 65.0 percent for persons with no disability.” The elderly have now been designated as a “new class of workers” as they return to the labor market out of economic desperation. The numbers of unemployed workers who are 65 years old and older now in the workforce, compared to a decade ago, have increased to 7.3% from 4.7%.

The census of workers currently
without employment opportunities include significant numbers of aging baby boomers who were about to seek retirement while looking forward to the "golden years." The erosion of planned retirement savings requires that many older workers now return to work. There is a reluctance to file claims. Therefore, fewer injured workers now seek total disability payments under workers’ compensation. The stagnation of the administration of the workers’ compensation system makes it even more difficult for the elderly who are injured to navigate the system. This only adds to the claimant’s frustration and encourages a greater reluctance to file a formal claim for benefits.

Some workers’ compensation insurance companies now involved in the compensation system have been nationalized by the federal government to the various stimulus and bailout programs. They lack funds to remain economically viable with out further insurgence of capital from the federal government. The federal government is now a stakeholder in the process. Self-insured employers are becoming financially weaker. Corporate assets have been minimized by lack of credit and the massive economic stock value decline. Municipal entities and others involved in joint insurance funds (JIFs) are now having difficulty in maintaining economic viability. Because of the lack of tax revenues and federal support, State and local communities are on the verge of bankruptcy.

The present
ills of the American workers’ compensation system mirror the economic woes of the national economy. The last decade has demonstrated an accelerated decline in the functioning of the system. It is reflective of what Paul Krugman, Professor of Economics and International Affairs at Princeton University, commented in the NY Times, that Americans are having financial “illusions.” “The bottom line is that there has been basically no wealth creation at all since the turn of the millennium: the net worth of the average American household, adjusted for inflation, is lower now than it was in 2001.” The workers’ compensation system is so bogged down in increasing medical debt that it is unable to deliver benefits efficiently. The present compensation system can’t be relied upon to rebound.

Compounding this downturn in the financial sector is the fact that
workplaces have become safer. Over the years there has been a decline in fatalities as reported Bureau of Labor Statistics National Census of Fatal Occupational Injuries. As the United States becomes more of a service-based economy with a dwindling manufacturing sector, less injury risk exists in the occupational sector. The workplace has become safer and there are fewer serious injuries and less occupational illness.

The
corporate downturn has been reflected by the implosion of many defense law firms who have reduced their staffs. Over a thousand lawyers were laid-off in a single day by major defense firms. The legal market restructuring is the result of a domino effect of the downsizing of corporate America. Representing injured workers and defending compensation claims on behalf of corporate America has taken a dramatic downturn. The trend is toward less attorney participation in the present system. Even attorney layoffs have become epidemic as the economic downturn intensifies.

Additionally, workers’ compensation programs have been subject to insurance industry targeted reform. The yet number of claims, eligible for benefits that would require legal representation has
declined substantially as the California wave of reform swept towards the east coast. As the economies of the States shrink, so do the dollars available to operate the administrative programs for injured workers. Workers’ Compensation hearing offices in California will be closed two days per month and in New Jersey, a state that has already imposed a hiring freeze, is about to similarly close State offices.

The workers’ compensation system, based upon new national social and economic characteristics is already being re-crafted into a
new program requiring less need for litigation support. Unlike the Great Depression of the 1930’s and the recession of the 1980’s, the present downturn in workers’ compensation claims activity is not anti-cyclical. It is an illusion of grandeur to believe that the present workers’ compensation system will recover or rebound in its present format. A national universal medical program will ultimately embrace the compensation delivery system and determine the future destiny of workers compensation.