In recent years, the workers compensation market has shown its propensity to maintain a steady incline. This upward trend is brought about by a lot of factors – both national and local in scope – and continues to trigger workers compensation costs to rise beyond limits. Higher compensation costs result to higher business expenditures and, as history always proved, bigger employment issues eventually. Let’s take a look at the top three most critical issues hounding the workers compensation market today and see how these affect the way business is done in and outside the state.
Re-entry of Middle East war veterans into the workforce
Out of the 2.4 million Americans deployed during the Iraq and Afghanistan wars, more than 50,000 soldiers sustained injuries and are now returning in droves to re-enter the US workforce. And with the Administration’s promise of getting all US soldiers out of combat by 2016, the reintegration of these veterans, injured or not, will certainly affect the workers compensation market.
The effect will fall on the companies that will have to employ veterans, though those who will employ veterans with service-related injuries will still enjoy the support of the Veterans Administration (VA). The VA’s coverage ensures that veterans with service-related injuries are continuously addressed even when the veterans turn to private employment.
That saying, the issues are still many. First, how will a private work injury be treated when there is a pre-existing service-related injury? While it could easily be treated as any other work injury superimposing a pre-existing work injury (from a previous employer), it is reasonable to expect that the veteran would prefer to seek assistance from the VA as it is where he or she is getting service-related injury treatments. In such a case, the question of reimbursement for the work injury to the federal government looms.
The Affordable Care Act
The much awaited implementation of The Patient Protection and Affordable Care Act of 2010 (‘Affordable Care Act’ or ACA) finally started this January 2014. The ACA will definitely have an impact on workers compensation costs as medical expenses have been shown to take up a huge chunk of the market.
The predictions with regard to ACA favor the businesses as it has aspects that are expected to reduce workers compensation costs. First, the removal of lifetime caps on medical insurance coverage (typically pegged at $1 million) will change the way workers apportion the costs between their health insurance and the workers compensation carrier.
Second, the mandatory coverage of employees with pre-existing conditions such as hypertension or diabetes would shift treatment costs to the insurer. An illustration: A hypertensive worker who suffers a fall and would need hypertensive treatment prior to orthopedic surgery would normally turn to the workers’ compensation carrier for treatment of both hypertension and orthopedic injuries. Under the ACA, it is the health insurer who is liable.
The ACA is generally favorable to both employees and employers. After all, a healthier workforce will ultimately yield to a lower workers’ compensation cost.
Return to litigation from mediation of workers’ compensation claims
The shift has reversed. Ten years ago, the trend has been towards mediation. Today, given the way mediation has not favored them, businesses have started to demand their cases to be litigated instead. From settlement of dubious injuries to paving the way for some unwritten worker benefits, mediation has proved to be a dangerous way of doing things. This reversal will definitely affect the number of workers compensation claims in the future.