Two major studies of the current state of workers’ compensation benefits across the country found startling inadequacies in the amount of benefits the average injured worker receives from his or her employer’s workers’ compensation insurance company. Experts believe that it is time to reform the system to make it work in the best interests of the worker, not the insurance company.
Report Finds Payments to Workers Have Been Falling Over Time
The IAIABC Journal is the semi-annual publication of IAIABC, an association of government agencies that regulate workers’ compensation acts in the states. This spring, the IAIABC Journal published an article on whether or not reforms made four decades ago have lowered workers’ compensation cash payments across the nation.
According to the article, experts found a decrease in cash payouts to injured workers over the past twenty years. Experts believe the cause has to do with how states define who is eligible for benefits. States have been narrowing their interpretation of what “arising out of the course of employment” means, resulting in lower payments or denial of workers’ compensation claims.
With the reduction in workers’ compensation benefits, some wondered what has been supplementing the loss of benefits. Some believe that injured workers are relying more on federal disability benefits, but the experts disagreed on whether or not the reduction in workers’ compensation awards has forced injured workers to increasingly rely solely on federal benefits like Social Security Disability Insurance.
The Social Security Administration’s Study
The Social Security Administration has also studied the adequacy of workers’ compensation benefits since reforms took place. Since injured workers may be relying more and more on SSDI benefits, the SSA has a legitimate interest in whether injured workers are adequately covered by their employers’ workers’ compensation insurance.
The SSA compared three methods of measuring workers’ compensation benefits. One study found that the weekly benefit for temporary total disability increased between 1972 and 1998 from 80 percent of the poverty level to 107 percent of the poverty level, meaning that workers in 1998 received benefits over the poverty line. This trend is considered a positive benefit from workers’ compensation reform, though the poverty line is a low standard of adequate care.
However, other changes were not as beneficial to workers as the poverty level increase. The SSA found that the oft-used wage replacement rate of two-thirds of normal wages is inadequate, especially for workers permanently disabled while on the job. Additionally, when compared to a standard benefit amount known as the Model Act, nearly all state temporary disability benefits are inadequate, with a quarter of states providing benefits less than 40 percent of the Model Act’s value. Only Pennsylvania provides benefits exceeding the Model Act standard.
Since workers’ compensation reforms over the last few decades have decreased the amount of cash benefits provided to injured workers, it is imperative that states take action to improve the benefits they require employers and workers’ compensation insurance companies to provide. Establishing a minimum benefit standard in all states would help ensure that workers are covered when they are injured while on the job.
When it comes to workplace injuries, experience matters. Injured workers should look for workers’ compensation lawyers with a long history and strong track record of representing workers’ interests. Workers need to be able to focus on their recovery. Having lawyers they can trust to help them get the benefits they deserve can make this possible.
Article provided by Cherry, Fieger & Cherry, P.C.
Visit us at www.cherryinjurylaw.com
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