- We Agree! (insert final Pettegrew article)
- Benefits & Negligence Liability in Balance
[RNPR insert new graphic on the three choices in Venn diagram format per chart in this “System Structure & Improvements” folder on Google Drive]
Injury Benefits. With no workers’ compensation insurance coverage, Texas employers that pay ANY medical expenses for injured workers must comply with federal employee benefit laws described below. [link to “ERISA Basics” section below]. Benefit adequacy has been achieved by coupling this employer discretion in benefit commitment with negligence liability exposure. Employers are motivated to care for their most important asset (workers) AND to eliminate the employee’s primary measure of damages. Employers can afford and commonly desire to be more generous on benefit payments to injured workers under a system that supports employee accountability, better medical outcomes, and more efficient dispute resolution.
Negligence Liability. With no workers’ compensation insurance coverage, Texas employers are fully exposed to negligence liability claims for an injured workers actual and punitive damages. The Texas Labor Code strips these employers of defenses based on an injured worker’s assumption of risk or contributory (or comparative) negligence, or the negligence of a fellow employee. This liability exposure is a powerful force in motivating employer investments in job training, safety programs and injury benefits coverage. Such lawsuits have developed a deep body of case law and an experienced group of attorneys representing employers and injured workers. These benefit and liability exposures are fully insurable within a competitive insurance market (subject to a deductible or self-insured retention that requires the employer to always have dollars at risk). Read more at:
[insert scales of justice symbol]
- [link to “The Market” under Resources tab]
- [link to Part 3 of Innovation Series on “Active Engagement”]
- [link to PartnerSource’s April 2019 data release on Largest Settlements/Judgments]
- ERISA Basics. Every separate state workers’ compensation system relies on its own unique statutes, administrative rules and bureaucracy. Texas injury benefit plans rely upon the same federal laws and related government oversight that has worked well for over 40 years with other forms of employer-sponsored benefit programs (like group health plans, disability programs and 401(k) plans).
Congress enacted the Employee Retirement Income Security Act of 1974 (“ERISA”) to protect “the interests of participants in employee benefit plans and their beneficiaries, by requiring the disclosure and reporting to participants and beneficiaries of financial and other information with respect thereto, by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate remedies, sanctions, and ready access to the Federal courts.” These laws have supported the efficient processing of Texas injury benefit claims for three decades.
In brief, ERISA requires:
- Clear Communication and Disclosure of Employee Rights and Responsibilities – through an official Plan document, a Summary Plan Description provided to every covered employee (understandable by the average employee regarding benefits provided, any exclusions and limitations, and how benefits can be obtained, including interpretive assistance, and periodic updates), and any Summary of Material Modifications. Plan fiduciaries must provide these and all benefit claim documents within strict timeframes or face stiff penalties.
- Employer Accountability and Fiduciary Responsibility – ERISA provides a robust system of employee protections that includes fiduciary rules, very detailed claim procedures that ensure a full and fair review of benefit claims (including discovery, separate levels of review and access to the courts), and other administrative safeguards.
State & Federal Law Hybrids are the Norm. The application of state labor and insurance laws, as well as federal labor and employee benefit laws, to employer-sponsored benefit plans has been the norm in Texas and other states for many decades. For example, just like Texas injury benefit programs, workers’ compensation programs must comply with federal laws like the Family and Medical Leave Act (FMLA), Americans With Disabilities Act (ADA), Occupational Safety and Health Act (OSHA), and Fair Labor Standards Act (FLSA).
Acceptance by the Insurance Community. Insurance markets and insurance agents are very familiar with and have relied upon ERISA as a fair system of administration for employer-sponsored group health, disability and retirement plans for over 40 years. They have existing personnel and resources to support ERISA compliance, as well as proven, free-market insurance underwriting models.
Read more on “The Market”. [link to this subsection under Resources tab]
Read more about public policies supported by ARAWC in this “We Agree!” blog post. [link to Pettegrew’s first blog post April 2019 and perhaps a related image]
- Recent Improvements – State workers’ compensation systems rely upon excruciating detail within many thousands of pages of statutes, regulations, directives, interpretations and “reforms”. Only on occasion does more system complexity and bureaucratic cost lead to better medical outcomes and higher employee satisfaction.
On the other hand, Texas injury benefit programs have a long history (since 1989) of non-statutory-based innovation and continuous quality improvement. For example, constructive criticisms related to the “Oklahoma Option” [link below] and Other States [link below] have resulted in widespread updates to Texas injury programs over the past three years, such as:
[insert lightbulb or other symbol of good ideas or innovation]
- Removing unnecessary exclusions and limitations on coverage,
- Adding “good cause” exceptions for late injury reporting and medical management requirements,
- Ensuring the injury benefit plan is the employee’s primary source of recovery (avoiding cost-shifting to government programs),
- Updates for new employee protections in ERISA disability claim regulations that became effective April 2, 2018, and
- More fiduciary training on claims handling to ensure a “full and fair review” – the legal standard approved by the U.S. Supreme Court for ERISA benefit claims.
Compliance with new legal developments, as well as self-regulated improvements in the interests of injured workers and employers, will ensure the continued, long-term success of Texas injury benefit programs.