February Recap: WC Issues
Temple Students Melissa Medina, Channa Feibush, Amy Vanderhei
Niki Ingram, Wayne McOwen, and Ed Palsho share WC Views
With Audience of Over 50 Attendees
RECAP BY DONNA POPOW
“News you can use” proved to be a big draw for the Chapter. The February breakfast meeting attendance exceeded the expectations of everyone. In addition to the members we were pleased to have three students from Temple’s Risk management program join us. While Melissa Medina chatted with Past President Ann Myhr about how to take a CPCU exam, Directors Mayleen Gallagher and Donna Popow talked with Channa Feibush and Amy Vanderhei about what drew them to the risk management program. Amy has found risk management to be an excellent partner to her actuarial science studies. Channa also has a background in business and has found that the risk management program provides her with information that can be put into practice immediately, rather than so many other courses that teach only theory.
The Temple students, chapter members, and guests were presented with very practical information on the current state of Workers’ Compensation in New Jersey and Pennsylvania by a distinguished panel. Niki T. Ingram, Esq., an attorney with Marshall, Dennehey, Warner, Coleman & Goggin, opened the discussion with her concerns about the use of Impairment Rating Exams (IRE), pursuant to Act 57. Carriers have found conflicts between the Independent Medical Exam (IME) results and the IRE results. Plaintiffs can capitalize on situations in which the IME recommends that the injured employee return to work and the IRE recommends a significant impairment rating. Niki advises clients to use IREs when there is surgery involved in the claim and to use an IME when the employer has a return to work program.
Niki also discussed the labor market survey required by Act 57. Act 57 allows the employer/insurer to show that jobs are available in the community by using a labor market survey. In the past, the employer/insurer had to present an actual job. Case law has been developing in such a way that Niki believes in 6 to 8 months the employer/insurer will again have to show the existence of an actual job. In order to be prepared for this change, Niki recommends that clients offer a light duty job or retain a vocational expert to find an actual job.
Niki’s third topic concerned the Medicare Secondary Payor enforcement initiative currently underway. You may recall that the Chapter had a presentation on this topic in February 2004. For a recap of that presentation, please see the June 2004 Chaptergram at our website,
http://philadelphia.cpcusociety.org/index.v3page?p=50115. Since the beginning of the enforcement initiative, Medicare set asides have been complicating the settlement of workers’ compensation claims. From a practical standpoint, it appears best to settle the indemnity portion of the claim and apply for approval of the medical portion of the claim, which is currently taking about 8 months.
Edward Palsho, Esq., Senior Vice President, New Jersey Manufacturers Insurance Companies, discussed the potential for upheaval in the workers’ compensation arena on the New Jersey side of the river. Currently, New Jersey is an employer choice state, meaning that the employer has the exclusive right to choose the treating physician. While many other states are moving toward this model, there is a growing sentiment in the New Jersey Legislature that this should be changed. The suggestion is to give the employee the choice of physician. Ed does not believe that this will come about but it may result in some sort of compromise such as a guaranteed second opinion. Because the New Jersey workers’ compensation arena has been so stable, this issue deserves watching.
The other major issue in New Jersey concerns the Employers Liability portion of the policy. Beginning with a decision in 2001, the NJ courts have begun to whittle away at the idea of workers’ compensation as the exclusive remedy for an injured employee. This has put plaintiffs in a bind because, while they can avoid the constraints of workers’ compensation for certain intentional acts, there is often no coverage for these acts of the employer under the EL portion of the policy. A Florida court has already held that there is intentional conduct that causes injury and that this conduct removes the case from workers’ compensation. Yet they held, in that same case, that the intentional act is not intentional enough to avoid coverage for the act under the EL portion of the policy. Essentially, the Florida court wants to have it both ways, because that is what benefits the injured worker the most. The fear is that a New Jersey court may rule the same way.
Wayne McOwen, ARM, Senior Vice President for Government Affairs and Industry Relations, Guard Financial Group, has been concentrating his efforts to reauthorize the Terrorism Risk Insurance Act (TRIA). TRIA is a very big issue for workers’ compensation carriers because of the unquantifiable exposures involved with terrorism. Wayne discussed a Tillinghast study on workers’ compensation terrorism risk which found that there is not enough capital in the industry to fund the losses that have been modeled. Carriers need the federal backstop supplied by TRIA, if they are to address terrorism. One major obstacle to the reauthorization effort has been the fact that the insurance industry has not been speaking with one voice on this issue. Support or lack of support tends to be based on geography and line of business. Some carriers do not feel that there is a sufficient exposure to terrorism in their geographic area. Others feel that the line of business they write will not be affected by terrorism. As a result, lobbyists such as Wayne have to convince their own industry that TRIA should be reauthorized, in addition to convincing Congress.
The panel also fielded some questions from the audience, demonstrating to our Temple guests that these issues are being faced daily by underwriters, claims people and risk managers.
