Legal Corner

EEOC settles suit with New York Con Ed for $800,000

New York City and Westchester County’s electricity and gas utility, Consolidated Edison Co. of New York Inc., will pay $800,000 to resolve a disability discrimination suit under the ADA. The EEOC said Con Ed’s doctors violated the ADA by refusing to medically approve qualified applicants to begin employment because of their disabilities, even though they could perform the jobs for which they applied, and by performing medical exams of applicants without first giving them a conditional job offer. The EEOC said also the utility’s doctors imposed improper medical restrictions on some existing employees with disabilities that reduced their earnings and, in one case, led to termination.

Workers’ Compensation

Exclusive remedy bars health care worker from suing employer for patient attack – California

In Mendiola v. Crestwood Behavioral Health, a health care worker contended her employer did not inform staff about a patient who had a history of attacking women and had misrepresented her job duties. The court said that all of her claims, whether based on misrepresentation or concealment, were related to workplace safety and, thus, were covered by the exclusive remedy of workers’ comp.

Insurance companies can recoup benefits from third-party award – California

In Duncan v. WalMart Stores Inc., an employee of a marketing firm fell and injured herself while on business in WalMart. The marketing firm’s insurer, The Hartford, paid roughly $115,000 for medical care and $37,000 in indemnity benefits. The individual successfully sued WalMart and WalMart was ordered to pay her $355,000, which went toward reimbursing her for medical expenses, and pain and suffering. Then,The Hartford sought to take $152,000 from her award.

Her attorneys argued that she hadn’t been awarded wage-loss benefits, so The Hartford wasn’t entitled to take money to reimburse the indemnity benefits it had paid. However, the court followed the legal precedent that allows employers and carriers to seek reimbursement for their workers’ compensation expenses “totally separate and apart from the injured worker’s actions.” The court wrote that allowing insurance companies to recoup their expenses before workers get a chance to see the award is “consistent with the overall purpose of the workers’ compensation system” because of the quid pro quo the system is founded upon.

Exempt corporate officer of subcontractor cannot sue general contractor – Florida

In Gladden v. Fisher Thomas, Inc., an officer of a Florida corporation, who elected to be exempt from workers’ compensation coverage and who was hired by a subcontractor on a construction project, may not sue the general contractor and other subcontractors in tort for the serious injuries he sustained when he fell from the second floor. The trial court concluded the officer was an “employee” under the Workers’ Compensation Law at the time of the accident, notwithstanding his exemption. The defendants were, therefore, entitled to workers’ compensation immunity.

Upon appeal, the court noted that electing the corporate officer exemption did not remove the officer from the entire workers’ compensation scheme and open the door to actions in tort against individuals and entities who would otherwise be entitled to workers’ compensation immunity.

Standards for expert witness testimony in FELA same as personal injury cases – Georgia

In Smith v. CSX Transportation, the Court of Appeals ruled that the same statutory standard for evaluating the reliability of an expert witness applies in cases brought under the Federal Employers Liability Act (FELA) as in any other personal injury case. An employee, who had filed workers’ comp cases for a back injury, a right knee injury and carpal tunnel syndrome in both hands over his 32-year career, filed suit against his company when he developed pain in his shoulders.

He claimed the company had violated the FELA by exposing him to “harmful repetitive motion, cumulative trauma, awkward work postures, vibration and other harmful conditions” that resulted in injuries to both shoulders. His claim was supported by a doctor whom the judge determined did not present reliable evidence.

The Georgia Court of Appeals said it was not an abuse of discretion for the trial judge to exclude the doctor’s testimony from evidence. Although FELA relaxes the standard of causation that would otherwise apply in personal injury cases, the court said that doesn’t mean the standard for evaluating the admissibility of expert testimony is similarly relaxed.

Second Injury Fund shares in the liability for back injury – Missouri

In Barnes v. Treasurer, an employee of an airport parking and shuttle company injured his back in 2009 and returned to work without restrictions. He asked to receive additional care, but was refused and began seeing a chiropractor and neurosurgeon, who recommended surgery. When the company refused to pay, he went through his private insurance, but only received authorization for one-level fusion, even though the doctor had recommended a two-level fusion. Following the surgery, the doctor imposed strict limits on his activity and the company eventually terminated him and he has not worked since.

This was not the first time he had injured his back; in 2000, at another employer, he suffered a back injury in a motor vehicle accident. There were two experts who opined that the permanent and total disability was a result of the last work injury, and there was one expert who opined that at least some of the disability was attributable to the 2000 accident. While a judge ruled that the company was liable for 100% of the costs, the Labor and Industrial Relations Commission disagreed, finding he was disabled by the combined effect of his pre-existing disabilities and the 2009 back injury.

Benefits allowed for staph infection related to epidural injections for lumbar injury – Mississippi

In Lowe’s Home Ctrs., LLC v. Scott, an appellate court noted weighing of the evidence, including expert testimony, was the responsibility of the Workers’ Compensation Commission. The Commission had given greater weight to the testimony of the employee’s medical expert who opined that, more likely than not, the worker’s staph infection was causally connected to epidural injections the worker received as treatment for a work-related back injury, and, thus, the decision to award benefits will stand.

Standards for evaluating appropriateness of vocational rehabilitation plans set by high court – Nebraska

In Anderson v. EMCOR Group, an injured employee had reached maximum medical improvement and was entitled to a vocational rehabilitation evaluation. The counselor determined that the company had no jobs appropriate for the worker and an Internet search of appropriate jobs revealed a much lower pay scale. The counselor, therefore, recommended a vocational training program. The Workers’ Compensation Court ordered the implementation of the plan, the company appealed, and the case ended up in the Supreme Court.

The Court noted that the purpose of the Workers’ Compensation Act is the restoration of an injured employee to gainful employment, although, it acknowledged it has never defined what it means to restore a worker to suitable or gainful employment. Having cited Alabama case law in previous decisions, the Court adopted the definitions used in Alabama, which provide that “restore” means “to put back.” Since the plan was geared toward putting the injured worker back to employment paying wages similar to those earned prior to the injury and in a field that would be compatible with his age, education and aptitude, the Supreme Court said approval of the plan was not “clearly wrong.”

Worker with PTSD entitled to further disability – New York

In the Matter of Perez v. SN Gold Corp, an employee of a jewelry manufacturer was robbed at gunpoint. It was found he was entitled to PTSD benefits. Later, a WC judge and The Workers’ Compensation Board found the employee had a further causally related disability. The company appealed, but the court found substantial evidence to support the finding and noted it found no error in the exclusion of the independent medical examiner’s report at the proceedings because the company had failed to comply with the law, which required that a copy of an IME report be provided to a worker’s treating doctor on the same day that the worker, the board and the employer’s insurance carrier receive it.

Property owner and general contractor liable for fall from scaffold – New York

In Yaucan v. Hawthorne Village, a New York appellate court ruled that a property owner and general contractor were liable under Labor Law Section 240(1) for a construction worker’s fall from a scaffold, and that they were not entitled to summary judgment dismissing the worker’s Section 241(6) claim. The injured employee who fell from the third floor claimed the scaffolding shifted when it was hit by a large piece of material and, although he wore a safety harness and lifeline, it was too long to stop him from hitting the ground. The court said the employee was entitled to summary judgment on his Section 240(1) claim, since he established that he was not provided with adequate safety equipment to prevent him from falling and it was the owners and general contractor’s duty to provide the safety devices necessary to protect workers from the risks inherent in elevated work sites.

Time limits for filing claims against guaranty fund upheld – North Carolina

In Booth v. Hackney Acquisition Co., an employee who died from lung cancer in 2008 worked for a company whose Workers’ Comp carrier was declared insolvent in 2003. His widow asserted the cancer was caused by his exposure to welding rod fumes during the course of his employment and filed a claim with the Insurance Guaranty Association. There are two sections of the statute that set time limits for such claims, but the widow contended the statutes violate principles of due process and equal protection for workers with occupational diseases that do not manifest within the time limits. The Court of Appeals, however, found both sections constitutionally valid, since they further the state’s legitimate interest in protecting the integrity of the guaranty fund.

Ambulatory surgery centers subject to same fee schedules as hospitals – North Carolina

The North Carolina Court of Appeals ruled that Ambulatory Surgery Centers (ASC) are not separate and legally distinct from hospitals, overturning a Wake County Superior Court decision that invalidated a new Medicare-based fee schedule for ASCs.

Employer who alleged violation of safety rules led to fatality must pay benefits to widow – Pennsylvania

In M.A. Beech Corp. v. WCAB (Mann), a bridge inspector suffered a fatal injury when he was pinned between an aerial lift and the beam of an overpass. While the company contended that the use of the lift had been a violation of the company’s safety rules, lower courts awarded benefits to the injured employee’s widow.

Upon appeal, the Commonwealth Court noted a company that relies on an alleged violation of safety rules must prove that the worker’s injury was caused by the violation of the rule, that the worker knew of the rule, and that the worker was engaged in an activity that was wholly foreign to his employment. The court did not find sufficient evidence that a safety rule was violated and also noted it was appropriate to grant benefits to the widow, since her husband was attempting to perform his duties as an inspector at the time of his fatal accident.

Widow receives benefits for unknown occupational exposure – Tennessee

The Supreme Court’s Workers’ Compensation Panel upheld an award of death benefits to a steelworker’s widow whose husband went to Stockertown, Pennsylvania, to work on an installation project at a cement plant and suddenly became very ill. Although he sought treatment at a walk-in clinic, his condition deteriorated and he was hospitalized and went into a coma. Doctors suspected he had pneumonia and septic shock, a serious infection that affects organ function and transferred him to another hospital, but en route he had a heart attack. He died a month later.

The widow petitioned for death benefits, arguing her husband had inhaled something on the job that caused his sudden decline and the treating physicians supported her argument. The trial court ruled, and the Supreme Court of Tennessee Special Workers’ Compensation Appeals Panel upheld in the widow’s favor.

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OSHA watch

Deadline for electronic injury, illness reports was Dec. 31, next date is Jul 1, 2018

OSHA delayed the OSHA 300A upload compliance date until Dec. 31, 2017 for employers to electronically submit injury and illness data for 2016 calendar year. However, OSHA will require 2017 Injury Data to be reported by July 1st, 2018.

If you want to be able to more easily and efficiently manage reporting work related injuries and OSHA recordables, please feel free to look at our Free OSHA Software at

Crane operator certification requirements delayed until 2018

As expected, the crane operator certification requirements were delayed by one year, when a final rule was published in the Nov. 9 Federal Register – just one day before the regulation was set to go into effect. “The agency intends to propose removing the capacity component of certification,” according to the Federal Register notice.

New fact sheets available on protecting workers in the shipyard and maritime industries

Four new fact sheets on protecting workers from common hazards found in the shipyard and maritime industries are available:

Enforcement notes


  • Six employers cited over $240,000 for exposing workers to Valley Fever on a solar project construction site in Monterey County. General contractor and subcontractors McCarthy Building Cos. Inc., Papich Construction Co. Inc., Granite Construction Co. Inc., Sachs Electric Co., Dudek, and Althouse and Meade Inc. were cited.


  • Tampa Electric Co. faces over $28,000 in fines for exposing workers to a hazardous release of a chemical refrigerant. Citations were also issued to Largo-based security services provider Critical Intervention Services, for not developing or implementing a written hazard communication program and failing to provide information and training on hazardous chemicals in the workplace. The company faces $25,350 in proposed penalties.


  • Buford-based auto parts manufacturer, Elringklinger USA Inc., was cited for exposing workers to electrical, fall, and noise hazards and faces fines of $308,906. The investigation followed two incidents, one involving an amputation of an index finger. Citations included failing to install machine guarding, preventing unauthorized employees from performing tasks that require the control of electrical hazards, and protecting workers from excessive noise exposure.


  • A 59-year-old worker was killed at the Amazon warehouse in Plainfield, when his head was crushed by a forklift. In its four-charge complaint, the Indiana DOL cited failure to train employees on lock-out tag-out procedures, as well as failure to follow those procedures and fined Amazon $28,000.


  • Lynnway Auto Auction Inc. faces fines of $267,081 for electrical, struck-by, and other hazards at its auto auction facility in Billerica. Five people were struck by a sport utility vehicle and died as a result of their injuries. Inspectors also conducted a joint employer inspection, and determined that temporary workers from TrueBlue Inc. – doing business as PeopleReady – were also exposed to struck-by hazards. The agency cited the Dover, New Hampshire, staffing firm for one serious violation for a struck-by hazard, and proposed a penalty totaling $12,675.


  • New Albany-based Custom Nonwoven Inc., a subsidiary of Korea Synthetic Fiber, faces penalties of $220,544 for willfully exposing its workers to unguarded machines, electrocution, and burns from exposed electrical wires and control cabinets, and falls from walkways that were not equipped with guardrails.


  • Anderson Foot and Ankle Clinic, a Rolla-based podiatry clinic, was cited for potentially exposing employees to infectious materials, and for violations of the hazard communication standard and faces penalties totaling $93,074.


  • A Dorchester-based Farmers Cooperative faces $373,911 in proposed penalties for failing to protect workers from grain bin entrapment and engulfment hazards. The cooperative was cited for two willful, one repeat, and four serious safety violations of the agency’s grain handling standards.
  • Bimbo Bakeries USA faces $122,625 in proposed penalties for exposing workers to multiple hazards at its Bellevue commercial bakery. Investigators cited the bakery for three repeat and three serious violations including lack of machine guarding, failing to provide fall protection, and using a damaged electrical panel box.

New York

  • Trade Fair Supermarkets faces $505,929 in proposed penalties for exposing employees to safety and health hazards at three of its locations in Queens. Inspectors found blocked exit routes, saw blades without safety guards, and a lack of eyewash stations needed in the event of exposure to corrosive substances. The company also failed to train employees on, and provide safety data sheets for, hazardous chemicals used in the stores.


  • Didion Milling Inc., a corn milling facility faces over $1.8 million in penalties following a fatal grain dust explosion that killed five workers and injured 12 others. Inspectors found that the explosion likely resulted from Didion’s failures to correct the leakage and accumulation of highly combustible grain dust throughout the facility and to properly maintain equipment to control ignition sources. Cited for 14 willful violations, the company was placed in the Severe Violator Enforcement Program.

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HR Tip: Important information about Medicare Set-Aside Arrangements (MSA)

MedLearn article reissued

On November 8, The Centers for Medicare and Medicaid Services (CMS) reissued this MedLearn article to clarify information. Initially, SE17019 was issued on 09/19/17 and addressed acceptance of payment for services from a patient’s Liability Insurance Medicare Set-Aside Arrangement (LMSA), No-Fault Insurance Medicare Set-Aside Arrangement (NFMSA), or Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA).

The revised MedLearn article now generally references Medicare Set-Asides (MSAs); there is no longer any specific reference to a WCMSA, LMSA, or NFMSA; instead, the term “Medicare Set-Aside Arrangement (MSA)” is utilized. However, the article does not limit the discussion to WCMSAs, even though a formal review process only exists for WCMSAs and goes on further to let providers know that Medicare is always secondary to liability, no-fault, and workers’ compensation insurance.

Opioid reserves in Medicare set-asides excessive

While the workers’ comp industry has made significant strides in reducing unnecessary opioid use, it is not the case with MSA’s according to new report from the California Workers’ Compensation Institute. A startling 70% of closed workers’ compensation claims in California include cash for future pain prescriptions, requiring funding for decades of opioid use, according to researchers. They also found the prescriptions were often at dangerously high dosage levels and written in conjunction with other high-risk drugs.

Although the report was based on California data, researchers have no reason to believe this problem is any different in any other state. With little oversight, the federal program allows comp claims to close with cash set aside to pay for future drugs and is clearly a matter the industry and government must address.

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13 point claims annual checkup

The beginning of the year is a good time to take a step back and look at your Workers’ Compensation program to assess strengths and weaknesses. A key aspect of a successful program is proactive management of claims. Every $1 in claim costs represents $2 or $3 in premium costs. Here are 13 points to evaluate:

  1. How quickly are claims reported?Reporting sets everything in motion – medical treatment, incident investigation, recovery at work, and so on. If claims are not reported quickly – within 24 hours or less – return to work is delayed and the cost of the claim and potential for litigation increase.
  2. When a claim is first reported and while it is open, do you provide relevant information about the injured employee to the adjuster?The more information an adjuster has, the more efficiently a claim can be managed. Information on job description, co-morbidities, recovery at work options, prior workers’ comp claims, workplace disputes, and so on will expedite the process. In addition, any changes that occur need to be immediately reported to the adjuster. For example, if you are contacted by an attorney, when the employee returns to work, the employee is not cooperative about recovery at work, or there is a change in medical information or providers.
  3. What is the relationship with the claims adjuster(s)?Regardless of company size, employers who take a hands-off approach and do not properly monitor claim adjusters will likely experience higher claim costs. Workloads are heavy and mistakes do happen. Having a designated adjuster who can work collaboratively with your staff will increase the efficiency of claims management and expedite closure.
  4. How many claims involve lost time?Lost time claims are the most expensive workers’ compensation claims and have the greatest impact on an employer’s premium. Countrywide, roughly 25% of all claims are lost time cases. You want to do better. Taking the time to analyze the claims and assess trends will help you focus your loss control efforts on the underlying issues.
  5. How often are open claims and reserves reviewed?It’s common sense that the longer a claim is open, the more it is going to cost. Excessive time lags in care or claim duration is a red flag that a case is spiraling out of control. Today, claims are more complex, often involving co-morbidities, narcotic drugs, an aging workforce, and expensive medications. Do claims ultimately close within 10 – 15% of the reserved amount? At a minimum, open claims and reserves should be reviewed quarterly.
  6. How are legacy claims managed?Lost time claims can be active for years and if not aggressively managed, the cumulative costs will continue to grow. Are they forgotten? Has any effort been made to contact the employee and explain why it is in their best interest to settle?
  7. How many claims are litigated?There is no question that litigation leads to increased claims costs and often times leads to a worse medical outcome for the injured worker. A 5% litigation rate is very good, 10-15% is good, and anything over 20% should be considered a red flag warranting further analysis. Litigation can start because the injured worker is afraid. Fear of the unknown. Fear for the job. Fear about their injury. Take the time to explain things to injured workers. An advocacy-based model can help (see next question).
  8. Have you moved to an advocacy-based approach to claims?An employee’s perception that an employer doesn’t take the employee’s concerns seriously will escalate a claim and increase the length of a disability. Advocacy-based claims models emerged as “buzz” in the industry in 2016. At its core is a focus on people. It’s treating your injured employee like a customer – helping them every step of the way and advocating for them when bumps occur. Here’s how:
    • Change the script. Don’t focus on how the claim will be investigated or all the insurance jargon. Begin with empathy, concern, compassion, and how you will help them through the process.
    • Designate someone to contact the worker on a regular basis. Don’t rely on the insurance company to be the prime contact; designate a supervisor, risk manager, or HR representative to maintain contact throughout the claim process. Monitor how often the contact occurs.
    • Make medical care easy. Having the support of occupational doctors and therapists and a triage nurse, who share the same objective of improving the injured employee’s health for a recovery at work, eases the process.
    • Don’t have a blanket approach. While one employee may respond well to several texts or phone calls in a week, another may find it disturbing and feel the employer does not trust them. Find a balance that works and set the right tone for maintaining communication.
    • Engage in the recovery at work conversation early. Be sure the employee and the treating physician know the options available and that the supervisor is on board. Involve the employee in the process – find out what they are comfortable with and what they worry about.
  9. Are payments to injured workers sent on an accurate and timely basis?Injured workers who aren’t paid in a timely fashion are fodder for eager attorneys. Designate someone to advocate for them and get it resolved.
  10. How effective are your medical cost controls?While state statutes differ with respect to the extent to which employers can direct injured workers to certain medical providers, the medical management of a workers’ comp claim is essential to reducing costs. Evaluate your relationships with medical providers and medical bill review processes to be sure they are working for you and your injured employee. Monitor the medical progress reports to be sure the treatment is appropriate and be wary of physician dispensing.
  11. How many emergency room visits did you pay for?Treatment at an emergency room is not only one of the most expensive places to get medical care, but also likely to derail a rapid return to work. While often used for convenience, it should be a last resort and used for critical, emergency situations only.
  12. Do you investigate potentially fraudulent claims?While only a small percentage of claims are fraudulent, they do occur. It doesn’t have to be costly surveillance; often times social media activity will tip off employers that something is amiss.
  13. Have subrogation opportunities been identified and pursued?Subrogation is the right to recover Workers’ Compensation benefits paid to the employee because of the negligence of another person or entity. While subrogation laws vary by state, there are common occurrences that should be on the radar screen for potential third-party liability. These include: automobile accidents, slips and falls due to defective premises, defects in machinery or other products, or involvement of dangerous chemicals or other substances. While the process can be complicated and expensive and often the decision to subrogate is in the hands of the insurance company, it behooves employers to immediately notify agents and insurance carriers of the involvement of a negligent third party.

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What employers should expect from an insurance agent

My fellow Institute of WorkComp Professionals educator wrote this article to summarize items that an employer should expect from their insurance agent when it comes to helping the employer to manage their workers compensation insurance program.

By Kevin Ring
Institute of Work Comp Professionals
Editor’s note: Kevin Ring, CWCA, CWCA, MWCA, is Lead Analyst at Institute of WorkComp Professionals, Asheville, NC of which we are a member. It trains and certifies independent insurance agents and their support staff to navigate the complicated workers’ compensation system and act as advocates operating between employers and their insurance companies.
Most workers’ compensation discussions focus on the roles of four active players: injured worker, physician, employer, and insurance company. But what about the insurance agent? Far too often, agents step into the background. There is something wrong with this picture. Workers’ compensation is one coverage area in which insurance agents can effectively demonstrate their value.

Here’s how we work to make a difference for the employers we serve:

Ensure the employee classifications are correct
With an average of 500 to 600 available job classifications, it’s easy for mistakes to occur. For example, a clerical employee (low workers’ comp rate) can be misclassified into one with a higher rate, which increases the cost. This is just one; many others can occur.

In fact, it’s even easier for mistakes to perpetuate themselves. An insurance agent calls on a prospect and asks to submit a quote and the owner agrees, thinking it’s a good idea to shop around. To get the necessary information, the agent asks to see the existing policy, copies the information, and goes back to the office to prepare the quote. If there are mistakes, they keep showing up.

Who is responsible for finding mistakes and correcting them so the employer only pays what is owed? Frankly, it’s the insurance agent who has the account. We’re trained how to find and correct mistakes so employers are not exposed and pay more than necessary.
Help employers develop a physician relationship
When it comes to reducing workers’ comp costs, particularly medical expenses, the importance of employers having a relationship with physicians with work-related injury and illnesses expertise cannot be overstated.

Too often, when an injury occurs, injured employees are sent to their personal doctor, an emergency room, or a nearby walk-in clinic. This can lead to higher costs, delayed return to work, and an increase in the experience mod, which lasts for three years.

If this is to change, it starts with having the right physician relationship. We can help an employer identify physicians with expertise in occupational medicine, go with the employer to interview doctors, develop options for alternate duty, help make sure the selected physician understands the business, the types of work performed, and any other employer expectations so that the physician is prepared when injuries occur.


Help an employer develop a process of what to do when employees are injured
What happens when an employee suffers an injury? Depending on the extent of the injury, in many cases employees are sent home and told to take it easy for the day, go to their own doctor, to the emergency room, or walk-in clinic. When you think about it, this is the only time employers give workers a blank check and tell them to go where they please without vetting the vendor.

It’s not good business because the employer has no control over the quality, cost, or outcome of the service. To change this, our task is to help the employer create a process that assures injured employees will receive proper care so they can return to the job as soon as appropriate.

Such a process may come as a surprise to employers who assume the insurance company is in charge. Actually, it’s more like opening the door and letting the fox in the hen house. Since employers are writing the check for their workers’ comp, they need to take charge of the process.
Analyze data to understand and foresee injuries
There’s a wealth of information in workers’ comp loss run reports, as well as OSHA reporting forms. Proactive agents work with employers to identify problem areas, which are often indicators that a larger, costly injury will occur, if changes are not made.
Serve as an effective conduit between the employer and the insurance company
When it comes to insurance, most employers are ill-equipped to have informed conversations with insurance companies. So, they reach out to their insurance agent when there’s a problem.

Today, insurance companies are all about reducing risks. It’s the agent’s role to position the employer in the best possible light with the insurance company to ensure competitive pricing and policy offerings.

Since the insurance agent knows both the employer and the carrier, it’s the agent who is best able to serve as the intermediary between the employer and the insurance company.
Help employers understand the technical nature of insurance language
Like the law, words have meaning in insurance. No one can feel comfortable with insurance unless they learn its language. Therefore, employers immediately file away insurance policies without even looking at them. They drag them out only when there’s a loss.

It doesn’t take a cynic to suggest that some insurance agents may like it this way. It gives them more control. But we recognize that a “secret language” is a barrier in the client relationship. It’s also an opportunity to help employers understand insurance by communicating its complexities simply and clearly. And, it’s worthwhile. No employer wants to be blindsided because they didn’t understand something, particularly when high costs are involved.
Help employers prepare for the workers’ comp premium audit so they pay only what they owe
Employers tend to view a workers’ comp audit as a minor inconvenience. The big question can be where to put the auditor. All of which suggests the annual audit is a low involvement event.

Now, compare this with an IRS audit, when all the stops are pulled out weeks in advance, and carefully choreographed by the accounting firm. No responsible business owner would go into an IRS audit the way most approach a workers’ comp audit that involves substantial sums of money.

It’s in an employer’s best interest to expect the insurance agent to help them prepare for a workers’ comp audit, particularly since auditors work for the insurance company. The agent understands the insurance language and knows the rules. During the weeks leading up to an audit, the agent can review the payroll records, check for incorrect job classifications, determine whether severance pay is excluded from comp, among others. If they find mistakes, they can correct them before the audit takes place.
Review information on employee injuries prior to the “magic moment”
This is the date the insurance company reports the employer’s information to the rating bureau for inclusion on the experience mod. It occurs 18 months from the inception of the account and every 12 months thereafter. Here’s what the report includes:

  • What has been paid thus far on employee injuries
  • What the insurance company has “reserved” (the estimated funds needed to ultimately resolve an employee injury.)

It’s important to review this data carefully. For example, if the reserves are higher than they should be, the employer’s experience mod will go up, which increases the company’s workers’ comp expense. Higher mods can render a business less competitive or, in the case of construction firms, ineligible to bid on certain jobs. The goal is also to make sure cases are not opened that should be closed, and that the reserves are relatively accurate.
Help the employer build a “recovery-at-work” program, so injured employees can be at work, rather than sitting at home
This is also known as “light duty,” “transitional duty,” or “return-to-work.” However, the term recovery-at-work more accurately describes what should happen and lets the injured worker know what to expect.

The recovery-at-work model sends injured employees the message that they are both valued and they can still be productive. Aided by transitional duty job descriptions, the physician can determine if the employee can return to work, along with job restrictions.

If the injured worker is back to work before lost time wage benefits begin, there is less negative impact on the experience mod. This can be a significant cost savings since the average lost time claim in 2016 was $53,000. But it’s also true that injured employees recover faster if they are at work.

Some managers still say, “Give me a whole man or no man.” But, happily more recognize the value of recovery-at-work. The insurance agent can help employers make it work best by identifying appropriate work activities based on physician restrictions, if any.

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EEOC ordered to reconsider wellness rules

The Equal Employment Opportunity Commission’s (EEOC’s) rules about the fees employers can assess workers who do not participate in wellness programs were ruled arbitrary by the U.S. District Court for the District of Columbia on Aug. 22. Rather than vacate the rules, the court sent them back to the agency for redrafting. The court’s decision does not vacate the EEOC rules and employers are obligated to comply with existing rules, but should be alert to future changes.

Work conditions ‘unpleasant, potentially hazardous’ for more than half of Americans: study

Nearly 55 percent of American workers claim they encounter “unpleasant and potentially hazardous” conditions on the job, according to a study from nonprofit research institute RAND Corp., Harvard Medical School, and the University of California, Los Angeles. Nearly 1 in 5 workers reported exposure to a “hostile or threatening social environment at work” and 1 in 4 said they do not have enough time to complete job tasks.

National survey on fatigue indicates it is a hidden, but potentially deadly workplace epidemic

Some 43 percent of Americans say they do not get enough sleep to mitigate critical risks that can jeopardize safety at work and on the roads, including the ability to think clearly, make informed decisions, and be productive, according to a new National Safety Council survey-based report, Fatigue in the Workplace: Causes & Consequences of Employee Fatigue. An estimated 13 percent of workplace injuries could be attributed to fatigue.

CDC launches website on worker wellness programs

To help employers start or expand employee health promotion programs, the Centers for Disease Control and Prevention has created the Workplace Health Resource Center website.

New app from NIOSH: Lifting Equation Calculator

In an effort to prevent work-related musculoskeletal disorders, NIOSH has released a mobile app based on the Revised NIOSH Lifting Equation, an internationally recognized standard for safe manual lifting.

Updated ergo guide from NIOSH offers strategies for preventing MSDs

The NIOSH Musculoskeletal Disorders Research Program has updated its guidance document on the formation and function of ergonomics programs. Intended for both workers and employers, it provides strategies for identifying and correcting ergonomic hazards, as well as references, forms and questionnaires.

Guide offers best practices for safely using bleach to clean and sanitize

A new safety guide published by the Michigan State University College of Human Medicine, Occupational and Environmental Medicine Division offers best practices for workers exposed to bleach, including janitors, housekeepers, environmental engineers, and hospital, restaurant, maintenance and agricultural workers.

FMCSA, FRA withdraw rulemaking on sleep apnea

The Federal Motor Carrier Safety Administration and the Federal Railroad Administration have withdrawn an advance notice of proposed rulemaking on obstructive sleep apnea. “The agencies … believe that current safety programs and FRA’s rulemaking addressing fatigue risk management are the appropriate avenues to address OSA,” FMCSA and FRA stated in a notice published in the Aug. 4 Federal Register.

Operation Safe Driver Week set for mid-October

Law enforcement officers are expected to keep a particularly sharp eye on the roads Oct. 15-21 during the Commercial Vehicle Safety Alliance’s Operation Safe Driver Week. Officers will be looking for commercial motor vehicle and passenger vehicle drivers engaging in dangerous behaviors such as speeding, texting, following too closely and not wearing seat belts.

Opioids updates

  • One in 12 US physicians received a payment involving an opioid during a 29-month study of pharmaceutical industry influences on opioid prescribing, according to researchers who will publish their findings in September’s American Journal of Public Health. During the study, 375,266 non-research opioid-related payments were made to 68,177 physicians, totaling $46,158,388.
  • A study from the Worker’s Compensation Research Institute examines the prevalence and trends of longer-term dispensing of opioids in 26 state workers’ compensation systems. It also documents how often the services (i.e., drug testing, psychological evaluation, and treatment, etc.) recommended by treatment guidelines were used for managing chronic opioid therapy.

Study casts doubts on effectiveness of marijuana in combatting chronic pain

Research funded by the U.S. Department of Veterans Affairs was published on the Annals of Internal Medicine website. Limited evidence suggests that cannabis may alleviate neuropathic pain in some patients, but insufficient evidence exists for other types of chronic pain. There was also sufficient evidence to conclude that cannabis use among the general population probably increased the risk of car accidents, psychotic symptoms, and short-term cognitive impairment. It was noted more research is needed.

CSB releases animated video on Louisiana refinery fire

The Chemical Safety Board has released an animated video that examines the cause of last year’s ExxonMobil refinery fire, which severely burned four workers in Baton Rouge, LA.

State News


  • New regulations aimed at preventing incidents such as the 2012 Chevron Corp. fire at oil refineries will take effect Oct. 1.
  • Ratings bureau proposes small workers’ comp premium increase for 2018.
  • Workers’ comp bill safeguarding pregnant women put on hold.


  • NCCI recommends comp premium decrease of 9.6% effective Jan. 1, 2018.


  • The National Council on Compensation Insurance (NCCI) recommends a 10.9% workers’ compensation premium rate decrease for Illinois.
  • Governor vetoes state-funded comp insurance plan.


  • Effective August 1, patients with post-traumatic stress disorder can purchase medical marijuana.
  • Department of Labor and Industry adopted the final rule from the federal Occupational Safety and Health Administration about walking-working surfaces and personal fall-protection systems.

New York

  • Employers should prepare to comply with the Paid Family Leave that goes into effect Jan. 1, 2018.


  • The Compensation Rating Bureau filed an emergency 6.06% loss cost increase in the wake of a state Supreme Court decision that blocks impairment rating evaluations.


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Things you should know

Return to work more likely with less-invasive back surgery

A recent study of 364 Ohio workers diagnosed with degenerative spinal stenosis who underwent back surgery found that those who underwent primary decompression, a surgical procedure to alleviate pain caused by pinched nerves, had higher return to work rates than those who had the more-invasive, more-expensive fusion surgery. The study was published in July’s Spine medical journal.

Ohio adopts rule requiring initial conservative back treatment

The Ohio Bureau of Workers Compensation’s new spinal fusion rule requires workers to first undergo at least 60 days of comprehensive conservative care, such as physical therapy, chiropractic care and rest, anti-inflammatories, ice and other non-surgical treatments before lumbar surgery. Conditions that require immediate intervention, such as spinal fractures, tumors, infections and functional neurological deficits, are exceptions to the rule.

DOL will again issue opinion letters on FMLA, FLSA and other laws

The U.S. Department of Labor will again issue opinion letters to assist employers and employees in interpreting laws like the FMLA and Fair Labor Standards Act. The DOL has established a new webpage to submit requests for opinion letters and to review old opinion letters.

New I-9s must be used beginning Sept. 18, 2017

USCIS released a revised version of Form I-9, Employment Eligibility Verification, on July 17. Employers can use this revised version or continue using Form I-9 with a revision date of 11/14/16 N through Sept. 17. On Sept. 18, employers must use the revised form with a revision date of 07/17/17 N. Employers must continue following existing storage and retention rules for any previously completed Form I-9. Changes to the form are considered minor.

Free safe driving kit from National Safety Council

The Safe Driving Kit, sponsored by Wheels, Inc., aims to create safer roads and protect employees through multi-media resources and engaging materials. The kit addresses the key contributors to car crashes, including distraction, alcohol, other drugs, fatigue and seatbelt use. It also brings attention to lifesaving technology that helps prevent crashes.

Workers’ comp making more progress in reducing opioid prescriptions

According to research released by the Centers for Disease Control and Prevention (CDC), the average days’ supply per opioid prescription increased from 13 days in 2006 to almost 18 days in 2015. Meanwhile, nearly half of the states included in a study of opioid prescribing in workers’ compensation cases have seen reductions in the frequency and strength of opioids given to injured workers, according to a study released in June by the Cambridge, Massachusetts-based Workers Compensation Research Institute.

More than 1,000 unsafe CMVs pulled from service during ‘Operation Airbrake’

Brake violations prompted the removal of 1,146 commercial motor vehicles from service as part of a recent unannounced, single-day inspection blitz across the United States and Canada on May 3. According to the Commercial Vehicle Safety Alliance (CVSA), 12 percent of CMVs inspected were taken out of service for brake violations, and 21 percent were removed for other violations.

More than half of workers aren’t trained on first aid, CPR: survey

About 10,000 cardiac arrest situations occur in the workplace each year, yet only 45 percent of U.S. employees have been trained in first aid – and only 50 percent of workers know where to find an automated external defibrillator – according to the results of a survey recently conducted by the American Heart Association.

‘Sleeping in’ on weekends may be bad for your health: study

Going to bed later and waking up later on weekends than during the week – also known as social jet lag – may be linked to poor health and higher levels of sleepiness and fatigue, according to the preliminary results of a study conducted by researchers at the University of Arizona. Results showed each hour of social jet lag was linked to an 11.1 percent increase in the chances of developing heart disease. In addition, participants who experienced social jet lag were 28.3 percent more likely to report their health as “fair/poor.” The study abstract was published in an online supplement to the journal Sleep.

Safety measures lacking on plastic injection molding machines, peripheral equipment: study

Factories with plastic injection molding machines that interact with peripheral equipment – such as robots or conveyors – could do more to improve safety, Canadian scientific research organization IRSST concluded in a recent study. The study was published in May along with a technical guide.

State news

New rule requires preauthorization of all compounds, regardless of price – Florida

  • To clear up a “misunderstanding” among stakeholders, the Florida Division of Workers’ Compensation has clarified that all compounded drugs, regardless of cost, are now subject to preauthorization.

Legislators pass budget without workers’ comp reform – Illinois

  • While the state faces one of the highest workers’ compensation insurance rates in the country, legislators were unable to reach a consensus on reforms.

Prescription drug monitoring program implemented – Missouri

  • Missouri was the only state that lacked a prescription drug-monitoring program prior to last month when the governor signed an executive order directing the Department of Health and Senior Services to create a prescription drug-monitoring program.

Workers’ comp rules tightened – Missouri

  • The new legislation redefines “maximum medical improvement (MMI)” as the point when the condition of an injured employee can no longer improve, and bans any claims for benefits beyond that time period. It also puts more emphasis on the employee proving an employer discriminated against them after they filed a workers’ compensation case.

4.5% decrease in workers’ comp for businesses – New York

  • The New York Department of Financial Services has approved the 4.5% workers compensation premium rate decrease recommended by the New York Compensation Insurance Rating Board effective Oct. 1.

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Legal Corner

Appeals court overturns jury verdict in favor of employer

In Cassandra Woods, Tina Hinton v. START Treatment & Recovery Centers Inc., Addiction Research and Treatment Corp, the 2nd U.S. Circuit Court of Appeals in New York reversed a jury verdict in favor of the employer in a Family Medical Leave Act (FMLA) case. According to the court the judge had wrongfully instructed the jury to apply the “but for” cause of her termination, that she would not have been terminated if she had not taken FMLA leave.

On appeal, Ms. Woods argued that she only had to establish the FMLA leave was a motivating factor in her termination, which is a lower standard. The court agreed, citing a U.S. Department of Labor rule that interpreted the statute in this way. The case was remanded for further proceedings.

Workers’ Compensation
Employer must pay $3.64 million in additional premiums based on audit classifications – federal

Aviation ground services company Servisair L.L.C., which is now a subsidiary of Cheshire, England-based Swissport S.A. L.L.C., contracted with Liberty Mutual Insurance Co. for a guaranteed cost insurance policy in which the final premium would be determined based on an audit of Servisair’s payroll classifications at the end of the policy period. The estimated premium was based on payroll information submitted by the company, which, according to Liberty Mutual, was knowingly over allocated to the inexpensive clerical classification.

The company refused to pay and argued that the policy was a product of a mutual mistake about the premium calculations and that the policy’s premium calculation provisions were ambiguous. The US District Court in Houston and the 5th U.S. Circuit Court of Appeals in New Orleans disagreed.

Exclusive remedy nixes remaining claims in NFL painkiller lawsuit – federal

A federal judge in California dismissed three remaining claims from a wide-reaching lawsuit filed by players alleging mistreatment with medications because the players had previously sought relief through workers’ compensation. The lawsuit argued that the underlying claims should be exceptions to workers’ compensation exclusivity because they were triggered by intentional acts by the teams, team doctors and trainers.

Second appellate court rules that untimely IMRs are valid – California

Recently, the 3rd District Court of Appeal (DCA) issued an unpublished decision in Baker v. WCAB (Sierra Pacific Fleet Services), agreeing with the decision of the 2nd DCA in California Highway Patrol v. WCAB (Margaris). “The interpretation of Section 4610.6, subdivision (d), as directory rather than mandatory is consistent with case law and implements the Legislature’s stated policy that decisions regarding the necessity and appropriateness of medical treatment should be made by doctors, not judges,” the 3rd DCA said.

Decision overturning total disability benefits limits to 104 weeks applies to case pending at the time – Florida

In June 2016, the Supreme Court (Westphal decision) ruled that terminating disability benefits after 104 weeks to a worker who is totally disabled and incapable of working but who has not yet reached maximum medical improvement is unconstitutional. In Ft. Walton Beach Medical Center/Broadspire v. Young, the question is raised whether the ruling applies to a case that was appealed the month before the ruling was issued. The 1st DCA noted the claims were filed in 2014 and 2015 while the Westphal decision was pending in the appellate court. The Supreme Court accepted jurisdiction of Westphal in December 2013, so its ruling applies to this case.

Ex-farm employee’s agricultural work precludes workers’ comp benefits – Indiana

In Charles O’Keefe v. Top Notch Farms, an employee drove a semi-truck and tanker and did a variety of other jobs on a farm. He was injured when he was picking up liquid fertilizer and the tanker overflowed. The injured worker argued that he should be considered a truck driver, not an agricultural employee exempt from the Workers’ Compensation Act. However, the Workers’ Compensation Board and the Court of Appeals disagreed, noting it must exam the “whole character” of the work to determine if it is agricultural in nature, so maintenance work is not categorically non-agricultural. His work as truck driver, granary sweeper, painter and truck washer, collectively, was agricultural in nature.

Undocumented worker placed on unpaid leave after filing workers’ comp claim may have a retaliatory case – Minnesota

In Sanchez v. Dahlke Trailer Sales, a divided Supreme Court held that an injured undocumented worker had raised a genuine issue of material fact as to whether an employer had discharged him because he sought workers’ compensation benefits. The employer argued it was not a discharge – the worker was placed on unpaid leave until the worker could show that his return to employment would not violate federal immigration law. However, the worker argued the company had long known and accepted his undocumented status. The Court also found that federal immigration law does not preempt an undocumented worker’s claim for retaliatory discharge under Minn. Stat. § 176.82, subd. 1 (2016).

General contractors must provide workers’ comp for all subcontractors – Mississippi

In Builders and Contractors Association v. Laser Line Construction Co., the Supreme Court ruled that Mississippi Section 71-3-7 requires general contractors to purchase workers’ compensation coverage for the employees of subcontractors, even if the subcontractors are exempt from a requirement to hold workers’ compensation coverage themselves.

Appeals court narrows compensability of horseplay – Missouri

In Hedrick v. Big O Tires, the Court of Appeals upheld the denial of benefits to a tire shop employee who sustained severe burns when he used a lighter to ignite a can of glue held in a coworker’s hand during an apparent lull in the workday. It noted that the worker’s ignition of the glue was not an accident and that it is the accident, and not the injury, that must be the prevailing factor in causing both the resulting medical condition and disability. Even if the extent of the injuries from the “non-accident” is more serious than expected, it does not warrant coverage.

Pre-existing asthma condition insufficient for relief from Special Disability Fund – New York

In Matter of Murphy v. Newburgh Enlarged City Sch. Dist., the court found that the employer had failed to demonstrate that a preexisting asthma condition hindered, or was likely to hinder, an injured worker’s employability. The court ruling was consistent with earlier decisions, which had held that preexisting conditions that are controlled by medication generally do not constitute a hindrance to employability.

Home health care services must be paid to injured worker, not spouse – New York

In Matter of Buckner v. Buckner & Kourofsky, LLP, the court found it was an error for the Workers’ Compensation Board to directly pay the wife, who was authorized to provide some home health services to her hemiplegic and wheelchair bound husband. Citing multiple earlier decisions, the appellate court held the award must be paid to the worker.

Construction worker independent contractor, not employee – North Carolina

In Bentley v. Jonathan Piner Construction, a construction worker printed business cards in the name of Bentley Construction and Maintenance, placed a decal on his truck with the company name, started a website to advertise the business, hired his own crew, set their hours, and used many of his own tools when working on various jobs. He and some of his crew were hired by a subcontractor to do framing work. The subcontractor offered to pay the business for the work, but was asked to issue a separate check for each man on the crew.

The owner of Bentley Construction and Maintenance sustained an eye injury and filed for workers’ comp, which was denied by the carrier. Applying the eight-factor test set forth in the North Carolina Supreme Court’s 1944 ruling in Hayes v. Elon College, an appellate court determined he was an independent contractor and not entitled to benefits.

Worker who jumped off roof entitled to benefits – Pennsylvania

In Wilgro Services, Inc. v. Workers’ Compensation Appeal Board (Mentusky), a HVAC mechanic, working on the roof of a building, had used a ladder roofers had been using to get up and down from the roof. One day he was the last one on the job, and there was no ladder available. He chose to jump from the lowest part of the roof, perhaps 16 to 20 feet from the ground and ended up with multiple fractures. The carrier denied the claim but the Workers’ Compensation Judge (WCJ) granted benefits, noting although the jump was ill advised, the worker did not intentionally injure himself.

On appeal, the case made its way to the Commonwealth Court, which agreed that the worker was in the scope and course of his employment and entitled to benefits.

Employer’s denial of benefits does not preclude right to subrogation – Pennsylvania

In Kalmanowicz v. WCAB, a divided Commonwealth Court ruled that an employer’s denial of a workers’ compensation claim does not forfeit its ability to partake in any recovery from a subrogated claim. In Pennsylvania, an employer’s subrogation right is often described in terms of being “absolute” and there are only “very narrow circumstances” in which that right can be waived.

In this case, the employer was contesting a claim for PTSD that arose from a fatal automobile accident where an oncoming vehicle swerved into the employee’s lane with the driver pressing his head against the windshield and staring at the employee. The employee argued that employer could not recover a subrogation lien because it had not accepted liability for the PTSD. Since the employer had not acted in bad faith nor failed to exercise due diligence in enforcing its subrogation rights, the court said the employer had not waived its right to subrogation.

Pension offset for workers’ comp based on maximum amount, not what was actually received – Pennsylvania

In Harrison v. WCAB, a divided Commonwealth Court ruled that an employer was entitled to an offset against an injured worker’s pension benefits based on the maximum monthly amount of pension benefits he could receive, even though he was receiving a lower monthly rate that provides a survivor benefit for his spouse. The court argued even though he received a reduced payment, his employer needed to provide funding to the pension plan to pay the survivor benefits to his wife and, therefore, both pensions would be “actuarially equivalent.”

Worker cannot sue co-worker for injuries in auto accident – Tennessee

In Williams v. Buraczynski, the Court of Appeals of Tennessee at Knoxville found that an injured worker could not sue his co-worker who was driving at the time of the accident for negligence. It noted the exclusive remedy was workers’ compensation and that case law provided the rights under the system. One of those rights is to “not be subject to a tort suit by another employee for actions taken in furtherance of the employer’s business.”

Claim for surgery treating pre-existing condition, not injury, disallowed – Wisconsin

In Flug v. Labor and Industry Review Commission, a divided Supreme Court ruled that a worker was not entitled to benefits for her surgery to treat her degenerative disc disease, even though she had a good-faith belief that the surgery was reasonable and necessary treatment for her work-related back and shoulder injuries.

A Wal-Mart supervisor suffered an injury to her shoulder and received conflicting opinions from three physicians regarding treatment. Following the recommendations of a neurosurgeon, she underwent surgery for an anterior cervical discectomy. However, the carrier only provided coverage for a muscle sprain based on the opinion of the doctor hired by Wal-Mart to perform an independent medical evaluation who concluded she suffered a cervical and shoulder strain that was resolved long before the surgery and that she had pre-existing degenerative disc disease.

While the Court of Appeals found that she was entitled to disability benefits for her surgery as long as she had a good-faith belief that it was necessary treatment for her industrial injury, the majority of the Supreme Court held “if the disability-causing treatment was directed at treating something other than the employee’s compensable injury” it is not compensable.

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The quandary of legal pot and workers’ compensation deepens

Now that 28 states have legalized the medical and/or recreational use of marijuana, employers are struggling with zero tolerance policies, pre-employment drug testing, employee drug testing, discrimination suits, and general uncertainty. Laws about marijuana vary from state to state, making questions about how it affects workers’ comp and other employer policies even more confusing. Further, as states tighten up laws on the use of opioids to manage pain, some argue that cannabis is a viable alternative, raising concerns that workers will be impaired when they return to work.

The changing landscapes are challenging for employers and will lead to more litigation, new laws and regulations. Here are six recent actions and trends that employers should know about:

  1. Federal budget protects medical marijuanaAlthough Attorney General Jeff Sessions has been an outspoken critic of medical marijuana, the $1 trillion spending bill approved in May, which will fund the U.S. government until the end of September, includes language that protects state medical marijuana programs from federal enforcement. It provides no funding for any prosecution of cases involving medical marijuana where it has been made legal. Recreational users are not protected under this provision.
  2. Opioid crisis drives loosening of use of medical marijuana in comp casesAlthough medical marijuana remains illegal under federal law, the landscape of marijuana use in workers’ comp is changing. Some advocate its use as a way to stem the epidemic of addiction and opioid abuse, but others argue there is little validated research to determine its effectiveness and possible side effects. Others see it as an effective way to reduce the ongoing costs of legacy claims, particularly those involving workers who will not return to work.In states such as New Mexico and Louisiana, judges have ordered insurers to reimburse injured workers for medical marijuana, when deemed medically necessary by a treating physician. New Mexico also required carriers to start reporting marijuana reimbursements beginning Jan. 1, 2016. For 2016, 15 payers reported reimbursements for medical marijuana totaling $46,826 for 19 claims. The average reimbursement amount per claim was $2,465. On average, each injured worker was reimbursed for 205 grams of marijuana, or about 22% of the maximum 920 grams allowed per year.In May, the Maine Supreme Court agreed to hear a case in which an administrative law judge had ordered reimbursement under workers’ compensation for an injured worker’s medical marijuana. While the Maine law made clear that medical marijuana was not a drug that could be paid for by a private health insurer, the statutory language does not apply to other insurers, including workers’ comp. Insurers and employers are awaiting the outcome of Bourgoin vs. Twin Rivers Paper Company.

    Even when the law permits insurers to reimburse injured workers for medical marijuana, the claims are complex. The doctors prescribing cannabis typically may not be the same physicians treating injured workers for the medical cause of their workers’ comp claim. It needs to be determined whether marijuana is medically appropriate, why they recommend it, and whether it is really for the work-comp injury or some other condition.

  3. Employers rethinking drug testing policiesA key challenge to employers is measuring impairment, when an employee uses marijuana. At issue is how long marijuana stays in a person’s system and the lack of a reliable test to determine what level of THC (the chemical ingredient that causes the “high”) leads to certain impairment.Positive marijuana tests continue to climb in both federally mandated, safety sensitive workplaces and the general workforce, according to Quest Diagnostics, Inc. Colorado and Washington, where recreational marijuana has been legal for several years, saw some of the biggest leaps for workers in safety-sensitive jobs. However, the dilemma for employers is that a positive test does not always equate with impairment.Although courts have supported employers in pre-employment drug testing cases, fewer Colorado employers are doing it. A tight labor market may be a reason, but some believe employers have become more accepting and looking for other ways to manage the issue.

    Some experts suggest that employers have a separate policy for marijuana testing. In developing any policy, it’s important to consider what type of work employees are doing. Employers can have separate drug testing policies for those in safety-sensitive positions, machine operators, and still another for office and administrative workers.

    Others suggest the use of impairment or psychomotor testing, rather than the traditional urine, saliva, or hair testing, when legally possible. With traditional testing, it’s difficult to determine whether the employee is high and impaired or is testing positive with lingering traces from weekend use. They argue that the point of drug testing is to determine if workers can do their job safely and not endanger others, and that impairment testing that measures reaction time, decision-making, and pattern recognition against an employee’s baseline is more effective.

    The state of Maine recently offered state employers “impairment detection training,” noting employers can continue drug screening of employees until the recreational marijuana law goes into effect in February 2018. However, thereafter, if not amended, testing for marijuana use will violate the state’s regulations protecting those who wish to use marijuana recreationally outside of work.

    However, many employers and federally mandated testing still rely on traditional testing, believing it is the best way to control risk. For example, the Department of Transportation (DOT) determined that the urine tests would not change because of the new state laws legalizing marijuana.

    For a workers’ comp claim to be denied, some states require employers to prove that a worker’s intoxication caused the injury, which can be difficult when the only evidence is a positive marijuana drug test. Employers are encouraged to better train supervisors and employees to recognize impairment and take steps to control and document it.

  4. Non-hiring or firing for positive marijuana testing can lead to discrimination suitsA “watershed” decision in Massachusetts sheds light on the issues employers face in employment practices and zero tolerance drug policies. In Cristina Barbuto vs. Advantage Sales and Marketing L.L.C., a worker was authorized by her physician to use marijuana to stimulate her appetite and help with symptoms of Crohn’s disease and informed the company that she would test positive on drug screenings. A supervisor told her the medicinal use of marijuana “should not be a problem,” which he later confirmed after consulting with others at the company, according to court documents.On her first day of work, she submitted a urine sample for a mandatory drug test and began work. Later in the day, she was terminated by an HR rep for testing positive for marijuana and was told the company followed federal, not state, law. She filed discrimination charges, alleging six claims, including handicap discrimination, invasion of privacy and denial of the right to use marijuana lawfully as a registered patient to treat a debilitating medical condition.A trial court judge dismissed all claims except the invasion of privacy claim, but a six-judge panel of the Massachusetts Supreme Court reversed the lower court judge’s dismissal of her claim for handicap discrimination and related claims, but affirmed the motion to dismiss on counts claiming an implied private cause of action and wrongful termination in violation of public policy. Notably, the supreme judicial court became the first appellate court in any jurisdiction to hold that medical marijuana users may assert state law handicap or disability discrimination claims-regardless of whether the state’s medical marijuana statute provides explicit employment protections. (Massachusetts’s medical marijuana statute does not provide such employment protections.)

    “The fact that the employee’s possession of medical marijuana is in violation of federal law does not make it per se unreasonable as an accommodation,” the court ruled. “The only person at risk of federal criminal prosecution for her possession of medical marijuana is the employee. An employer would not be in joint possession of medical marijuana or aid and abet its possession simply by permitting an employee to continue his or her off-site use.” The case has been remanded to the Superior Court.

    Takeaways for employers:

    • Employers may find it harder to argue that an adverse employment action against a medical marijuana user is justifiable solely because marijuana is categorized as an illegal controlled substance under federal law
    • Courts may increasingly look upon “the use and possession of medically prescribed marijuana by a qualifying patient as lawful” as the use and possession of any other prescribed medication
    • State law handicap or disability discrimination claims may apply to medical marijuana users
    • Employers should engage in the “interactive process” with medical marijuana users to determine if they can perform essential job functions with a reasonable accommodation
  5. Comp coverage for medical marijuana dispensaries uncertainThe conflict between federal and state laws on marijuana means that individual insurers are using their business and legal judgment in deciding whether to provide services to the marijuana industry. Hawaii’s largest workers’ compensation insurer, Hawaii Employers’ Mutual Insurance Co. (HEMIC), recently announced that it is canceling insurance policies for seven medical marijuana dispensaries that were slated to open this summer. In its statement, it noted that legal opinions clearly acknowledge that HEMIC and its board of directors have potential exposure for criminal liability based on federal law applicable to marijuana businesses.While many major carriers have provided coverage in other states, there is more uncertainty under the new presidential administration. On the other hand, it is a $6.5 billion dollar business and legitimate employers can be an attractive market for insurers.
  6. New information is emergingThe federal government’s stance that marijuana is an illegal substance has stalled research on its effectiveness, side effects, dosage, and so on. The first large study to directly compare medical marijuana to an opioid drug is beginning at the University of Colorado, Denver. The grant for this study is part of $9 million awarded by the state for trial purposes, funded in part by tax money from marijuana sales.A recent study by the Highway Loss Data Institute (HLDI) showed a correlation between marijuana use and traffic accidents. Claims frequency in Colorado, Washington, and Oregon, the states to first legalize recreational marijuana, was 3% higher than the controlled states that had not legalized marijuana. The HLDI has also begun a large-scale study in Oregon to assess how legalized marijuana use may be changing the risk of crashes with injuries.

There’s no easy answer for employers trying to respond to the increase in marijuana use and be compliant with the law. While the use of medical marijuana is still in its infancy, it’s important to recognize that if a doctor concludes medical marijuana is the most effective treatment for an employee’s debilitating condition, an interactive process, including an exception to an employer’s drug policy, may be warranted. Staying informed, updating and monitoring drug policies, educating employees on how it can impair judgment and motor skills, developing policies based on the employee base, and consistent hiring and disciplinary treatment can help ensure that they have a safe and productive workforce.

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Things you should know

Employer control over medical providers can lower costs for spinal injuries

A study by the Workers Compensation Research Institute (WCRI) found the greatest disparity in medical and indemnity costs between states that allow injured workers to choose their own providers and those that give employers more control is for spinal injuries. Researchers noted that there is more subjectivity in the nature of care for back and neck injuries, whether employees can go back to work, and the level of pain.
ISEA updates fall protection guide

In response to new regulations and standards, the International Safety Equipment Association (ISEA) has updated its Personal Fall Protection Equipment Use and Selection Guide. The 30-page document explains how to set up a fall protection program, details the major parts of fall protection systems, and advises on the selection of equipment based on industry. It also includes relevant OSHA regulations and U.S. and Canadian consensus standards.
New chronic pain guideline emphasizes physical activity

An “overwhelming theme” in treating patients for chronic pain is to keep them as physically active as possible, according to an American College of Occupational and Environmental Medicine treatment guideline recently released, which has not been released to the public. The therapy needs to move beyond simply stretching to strengthening, aerobic conditioning, and functional improvement and one key is to not prescribe activity “as tolerated” or “as needed.”
Study of severe injury data finds poultry and meat workers at high risk

Every day, 27 workers suffer on-the-job amputations or injuries that require hospitalization, according to a recent report from the National Employment Law Project. According to the data, employers reported 17,533 severe injuries between Jan. 2015 and Sept 2016.

Out of more than 14,000 companies reporting to the government, Tyson Foods ranked fourth, and JBS/Pilgrim’s Pride ranked sixth, in terms of the number of severe injury reports filed. Further, the poultry industry as a whole has the 12th highest number of severe injuries of all industries reporting-higher than the sawmill industry, auto, steel, and other high-hazard industries.
Large variation in worker attorney involvement by state: study

WCRI released a new FlashReport to help inform policymakers and stakeholders about worker attorney involvement in their state. According to the study, the percentage of claims with worker attorneys ranged from 13-14 percent in Wisconsin and Texas to 49-52 percent in New Jersey and Illinois. States included in this study are Arkansas, California, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Texas, Virginia, and Wisconsin.
Mine safety rule implementation delayed until Oct. 2

The U.S. Mine Safety and Health Administration (MSHA) has extended the effective date for its rule on workplace safety examinations for metal and nonmetal mines to Oct. 2. The rule addresses the timing of workplace safety examinations and strengthens notification requirements.
MSHA launches lone miner safety initiative

MSHA announced it will begin focusing inspections and mine visits on lone miner situations after five of eight miner fatalities this year have involved miners working alone.
State updates


  • Insurance Commissioner Dave Jones has issued a revised advisory pure premium rate, reducing rates by 16.5% to $2.02 per $100 of payroll effective July 1.
  • Occupational Safety and Health Standards Board approved a new regulation that serves to strengthen process safety management around the state’s oil refineries.
  • The start date for the planned drug formulary will be delayed by six months to January 1, 2018 to revise parts of the plan and receive public comments.


  • 14.5% increase in comp premiums upheld by appeals court.


  • The average indemnity benefit per claim in Illinois was $21,275 in 2013, while the median state benefit per claim was $18,269 according to a WCRI study.
  • The Senate passed two pieces of workers compensation reform legislation that would reduce the cost of workers compensation insurance for employers and introduce market competition. The bills will be sent to the governor for signature.


  • The Workers’ Compensation Commission has adopted an amendment to its 2017 fee schedule, adding opioid guidelines.


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