At the 2018 SAWCA All Committee Conference, a session discussed the state of the Grand Bargain of workers’ compensation. The speakers were:
- Wade McGuffey – Attorney, Goodman, McGuffey
- Beth Aldridge – Commissioner, Mississippi Workers’ Compensation Commission
- Rita Hedrick-Helmick – West Virginia Workers’ Compensation Board
- Scott Beck – Chair, South Carolina Workers’ Compensation Commission
- Amy Kingston – Manager of Claims Management, State of Colorado
The Grand Bargain of workers’ compensation started over 100 years ago. The “bargain” was workers giving up their right to sue in civil court for work injuries in exchange for a no-fault system that provides indemnity and medical benefits. This made workers’ compensation the exclusive remedy for workplace injuries.
The panelists felt workers’ compensation still does a good job providing for lost wages and medical treatment. They felt the medical with no deductible or co-payment was the greatest benefit. For high wage earners, the weekly benefit caps undermine the bargain of workers’ compensation as injured workers suffer a significant loss of earnings if injured on the job.
One question the panelists discussed is the purpose of permanent impairment. The system was set up with a focus on lost wages and medical treatment and the concept of permanent impairment evolved over time. This seems driven by attorneys wanting to add a tort element to this no-fault system and it is the main source of litigation in the workers’ compensation system.
The panelists acknowledged that some states do not adequately provide benefits for workers killed or permanently injured. For example, some states limit death benefits to two years, while others limit indemnity benefits to less than nine years. If a person is permanently totally disabled those benefits are not an adequate remedy.
The panelists felt that litigation of workers’ compensation issues before administrative law judges moves quickly. However, once the litigation moves into the appeals courts everything slows down and that can take years.
Workers’ compensation has helped to make workplaces safer and this is clearly demonstrated by the declining accident frequency rates. Employers that have higher injury rates pay significantly more premiums, so safety is rewarded.
The dramatic differences between benefit levels and what is compensable in different states is concerning. In 2016 the US DOL took note of this in a report very critical of state workers’ compensation systems. Under the current administration there is no push for minimum benefit levels from the federal level but that could happen in the future with a change in administrations.
Overall, workers’ compensation has been a successful social welfare program that serves both employers and injured workers’ well.