The politics of workers’ comp reform: Who is really behind House Bill 5002?

Michigan workers’ comp lawyer responds to State Rep. Brad Jacobsen’s article published October 26, 2011 in the Morning Sun.

Here is our response to comments regarding House Bill 5002. Quotes from State Rep. Brad Jacobsen are italicized.

“There has been misinformation circulating over the last few weeks regarding my legislation to update Michigan’s workers’ compensation law and I want to clarify my intent and debunk the misconceptions that are out there.”

This is true but the misconceptions are actually coming from the proponents of this legislation. The Michigan Chamber of Commerce has described workers’ comp as “social welfare” and is blaming plaintiff’s lawyers for wanting more confusion and higher costs to employers. This legislation has also been described as a simple codification of current law.

Workers’ comp is not welfare and it is offensive to imply that injured workers are simply looking for a free hand out. Workers gave up their right to sue an employer for an on-the-job injury in exchange for basic medical care and lost wages.

House Bill 5002 goes much farther than just codifying current case law. The Workers’ Compensation Act has never allowed for a reduction of wage loss benefits based upon a hypothetical wage earning capacity. This change has the potential to destroy workers’ comp and break a system that has lasted for 100 years.

“House Bill 5002 updates the Michigan Workers’ Compensation Act in order to remove confusion in the law, helping both employers and employees. Our workers’ comp law is over 100 years old and jobs have changed dramatically since its creation. My legislation simply puts the many Supreme Court rulings on workers’ comp into law, cutting down on the need for future litigation.”

House Bill 5002 seeks to codify only recent decisions from the Michigan Supreme Court. Cases such as Stokes v Chrysler and Rakestraw v General Dynamics Land Systems have been overwhelmingly pro-employer and anti-worker. Testimony before the House Commerce Committee revealed that the supporters of this legislation would not be so quick to codify the law if it went the other way.

House Bill 5002 will create an explosion in the number of workers’ comp cases. People who have never considered calling a lawyer will now find themselves in the position of having their wage loss benefits cut based upon an imaginary job. All workers’ comp cases will require that a vocational expert be hired by both sides. This will greatly increase the cost and time of litigation for both sides. In fact, it was the Stokes decision that began the trend towards requiring vocational experts in every case.

“Getting employees back to work is being painted as a negative thing when it should not be. Employees should return to work as soon as they are able, even if it is not in their traditional role. If an employee is unable to do their current job, the law will require their employer to attempt to find another position for them within the company. The employee will remain in the alternate position until able to return to their regular tasks. If there is a pay difference between positions, the employee will receive up to 80 percent of the difference between the two wage rates through workers’ comp benefits.”

This sounds great but is simply inaccurate. We encourage Rep. Jacobsen to introduce an amendment to House Bill 5002 that does actually require an employer to find another position in the company for an injured worker with restrictions.

House Bill 5002 does not require an employer to find another position within the company. It actually does just the opposite. House Bill 5002 says that an employer or insurance company can reduce wage loss benefits based upon a hypothetical wage earning capacity. This means that wage loss benefits can be reduced or eliminated based upon a job that may or may not exist. It does not guarantee a person a job.

This is a big change from the current law that only allows a reduction of wage loss benefits if the injured worker is actually earning wages in another job. House Bill 5002 removes the powerful incentive that employers have to bring their injured workers back with restrictions. When an employer can reduce wage loss benefits based upon a hypothetical job and virtual wages, what is the motivation to bring them back to a real job within the company?

Nobody is advocating for injured workers to stay home. Most people survive paycheck to paycheck when they are healthy and able to work. Workers’ comp only pays approximately 60% of gross wages with no increases for inflation. The vast majority of our clients simply want to recover from their injury and return to gainful employment.

“If a worker is completely unable to work or an alternate position is unavailable, they will continue to receive their full benefits and will not be required to come to work. Those unable to work due to injury in the workplace will NOT lose their benefits and changes will not impact those currently receiving benefits or those with pending claims.”

House Bill 5002 would immediately result in injured workers losing their wage loss benefits. This includes people currently on workers’ comp. The vast majority of injured workers are not “completely unable to work” but have restrictions that prevent them from doing their job or another that pays equivalent wages. It is not so easy to switch careers or find other work in this economy. Most people require retraining and additional education to make the transition.

Employers and insurance companies routinely hire vocational experts to find lower paying jobs and alternate positions that are supposedly available. This “evidence” is then used at trial to dispute the payment of wage loss benefits. House Bill 5002 turns workers’ comp upside down. Employers and insurance companies will now reduce wage loss benefits based upon hypothetical jobs and the burden will be on the worker to go to court and prove entitlement to full benefits.

Workers’ comp cases typically take a year or longer to resolve and injured workers will find themselves in the position of having their wage loss benefits cut or eliminated entirely. This will ruin people’s lives and destroy families. Expect the number of foreclosures to increase dramatically for people on workers’ comp. The taxpayer will also pick up the tab when the injured worker must resort to food stamps and other state aid.

“The proposed bill changed the specific timeframe that an employee must be treated by a company doctor from 10 days to 90 days. It’s not easy to get into a doctor’s office overnight, let alone receive test results and other necessary treatments within the 10 days required under the current law. This was extended purely to help employees get the treatment they need. After discussion, we have revised the proposal from 90 days to 45 days.”

Workers’ comp already requires the payment of all reasonable and necessary medical care. Make no mistake about this change, it is not for the benefit of the employee. A doctor selected by the worker is just as capable of providing quality medical care as a company doctor or industrial clinic. Employers want to control the choice of medical providers to save money and to manipulate restrictions.

Our experience with employer selected doctors is that they provide substandard medical care and real treatment does not begin until after the worker is free to select his or her own doctor.

The end game is to give employers total control of medical care. This was even included in an original draft of proposed changes that apparently served as the basis for this legislation.

“My goal is to protect both of these groups, not to perpetuate court cases due to confusion in the law. We have the ability to rely on judicial interpretations to stabilize the law, and should take advantage of it.”

Why should the legislature rely on judicial interpretations? The Stokes case has caused nothing but confusion and additional costs for both sides. Requiring an injured worker to define the universe of jobs that he or she is qualified to perform post injury is an impossible and unfair burden. The legislature has the opportunity to fix the law instead of making it even more difficult for injured workers to get benefits. A Stokes fix will reduce costs for employers and bring stability to the law.

“Open discussion of public policy is very important to me and I’m happy to discuss this issue further with anyone who has concerns. It’s in the best interest of employers to have healthy employees and updating current law is a win-win for everyone involved.”

House Bill 5002 is a win-lose proposition. We need to stand up to special interest groups like the Michigan Chamber of Commerce, the Michigan Self-Insurers’ Association, and the Michigan Manufacturers Association. The citizens of the State of Michigan deserve far better than what House Bill 5002 offers. Contact your state representatives and tell them to oppose this bad legislation.

Alex Berman is the founder of Michigan Workers Comp Lawyers. He’s been representing injured and disabled workers exclusively for more than 35 years.  Alex has helped countless people obtain workers comp benefits and never charges a fee to review a case. Call (855) 221-2667 to speak with him today.

Related information:

REP. BRAD JACOBSEN: Outdated workers’ comp law needs revision

House Bill 5002 (2011)

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