Wednesday, October 15, 2014

Why is there a waiting period for workers' compensation?

Many workers’ compensation jurisdictions have a “waiting period” for workers’ compensation.  This is a form of “deductible” whereby the worker absorbs the initial financial impact of wages lost due to a work-related injury.  Most jurisdictions with a waiting period also have a “retroactive period”; if a claim extends to or beyond the retroactive period, workers’ compensation for temporary disability during the waiting period is compensated.  There are also a number of jurisdictions that “waive” or “exempt” certain injuries or occupations from waiting periods. 

Waiting periods are not universal.  They are absent from most workers’ compensation systems in Australia and Canada.  In the US, waiting periods are common.  When John Burton wrote the National Commission on State Workers’ Compensation Laws (Washington, DC July 1972), he summarized the rationale for waiting periods and recommended the upper limits for waiting periods and retroactive provisions.  Specifically, the report’s Introduction and Summary notes on page 18:

Waiting period [Section 27(d)( 1 )(H) ] . Recommendations published by the Department of Labor propose a 3 day waiting period and a 14 day retroactive period. In contrast, the Model Act of the Council of State Governments specifies a 7 day waiting period and a 28 day retroactive period. Most States meet the standard of the Model Act, but do not meet the Department of Labor recommendation. Although the Model Act would provide benefits for 83 percent of lost time, the U.S. Department of Labor standard would compensate for 93 percent. The purpose of the waiting and retroactive provisions are to reduce payments for truly minor incidents and to assure benefits for even moderately serious injuries.

 We recommend that the waiting period be no more than 3 days and that the retroactive period be no more than 14 days. (See R3.5)
Using the National Commission recommendation as a basis for judgement, only 17 of 51 US jurisdictions would meet or exceed the recommendation regarding the length of the waiting period and retroactive period; all twelve Canadian jurisdictions would meet the waiting period recommendation but three would fail to meet the recommended retroactive upper limit.  The accompanying table reports the waiting period and retroactive period provisions in the US and Canada and assesses these against the National Commission’s recommendation. 

Interestingly, back in 1916 when British Columbia was considering its entry into workers’ compensation, the committee of the legislature (under Avard Pineo), the waiting period was avidly discussed.  The BC committee opted for a 3 day waiting period based on the following reasoning: 

We think that a waiting period of three days applicable in all cases will be adequate to accomplish any proper purpose sought by those who advocate the necessity of a waiting period, but will not be found to seriously inconvenience the injured workman, especially as he is during this period provided with full and adequate medical aid.

While the trade-off in 1916 was a three-day waiting period for the best medical aid provision in workers’ compensation at the time, many critics felt the burden of the waiting period was still considerable. The three day waiting period would be supported by three Royal Commissions in BC (Sloan 1942, Sloan 1952, and Tysoe 1966).  In the 1966 Royal Commission in British Columbia, Justice Tysoe sided with the business community and recommended continuation of the three day waiting period because of a fear of the financial impact on business if it were eliminated.  The government adopted that recommendation but in 1972, in the lead up to an election, the government of the day eliminated the waiting period.  

The most recent Royal Commission in British Columbia (1999) closely examined waiting periods.  It heard a number of reasons why a waiting period might be considered.  Reducing employer costs was one but concerns over “moral hazard” and high administrative costs were also noted.  The Royal Commission concluded:

Waiting periods do not reduce the costs of workplace injuries unless legislation and policies promote conduct by employers and workers that results in a real reduction in the number of injuries and illnesses, or a reduction in frivolous claims which would otherwise have occupied adjudicators’ time. If real costs are not being reduced, then waiting periods are simply a means for shifting costs away from the workers’ compensation system and onto individual workers, employers, or both.

The commission does not consider the latter an appropriate objective or result. The commission’s examination of the limited empirical evidence on waiting periods leads to the conclusion that any cost savings associated with waiting periods due to reductions in claims volume may well be more than offset by increases in the average costs of the remaining compensation claims, due to the extension of work absences beyond the waiting period (or beyond the retroactive period if one is introduced). 

Therefore, the commission sees no compelling reason to extend the current waiting period [the day following the day of injury], and in fact is of the view that injured workers should not be unfairly or unnecessarily denied compensation for losses caused by work-related injury.

Royal Commission on Workers’ Compensation in British Columbia Volume II Chapter 1

There may be reasons why a state or province has a waiting period (and retroactive period) in its legislation.  The reasons, however, should be explicit and supported by research.  If the reasons are economic, then the economic magnitude of the policy should be measured.  I can find no current estimate of the “co-pay” or “deductible” portion of workers’ compensation born by workers who must serve an unrecompensed waiting period. 

If the reason for a waiting period provision is to discourage “frivolous claims”, then the central premise behind the argument is questionable.  Is any work-related injury “frivolous”?  Frivolous is a subjective judgement and hard to test from a research perspective.  All work injuries are serious and important in revealing failures in the barriers, safeguards and defenses that would protect workers from harm. 

There are other important questions that need to be examined.  Does the presence of a waiting period influence reporting of work-related injuries?  Is the duration of work-related injury disability influenced by the presence or absence of a waiting period?  What impact, if any, does the length of a waiting period and retroactive period have on recovery outcomes, worker satisfaction, or appeal activity?

Workers already must bear the human cost of work-related injury.  Quantifying the additional economic burden and other impacts of waiting periods and retroactive provisions should be on the research agenda.  

Tuesday, October 7, 2014

Is it becoming easier or more difficult to accommodate persons with disabilities?

I  recently spoke to the  Healthcare Professionals Conference hosted by WorkSafeBC.   My presentation outlined the dramatic demographic factors that are changing –and will continue to change-- our healthcare systems, workplace and communities.  Several presentations focused on the issue of mental injuries, stress, and the duty to accommodate.  A few years ago, conference planners would have confined these topics to a breakout session under an obscure title in an inconvenient time slot.  Not so today!  That may be a sign of progress… or desperation.

Accommodation is primary disability prevention.  Statutes that codify an employer’s duty to accommodate have been around for years.  Employers, disability management professionals and human resource policy makers know the law and what it means.  Whether the specific law, rule or regulation is under Human Rights legislation, the Americans With Disabilities Act (ADA), or a workers’ compensation statute, most medium to large organizations are aware of the duty to accommodate.  They train their managers and likely have supervisors and union leaders with a common understanding—at least for the more common physical disabilities. 

We also have many high-profile examples of persons with disabilities excelling in sports, politics, science, and medicine.  These examples are changing perceptions and awareness.  Although many workplaces have had to make few accommodations, most workers and managers would see both the legal and moral imperative behind the duty to accommodate.  More importantly, they see the value and potential of the individual person rather than the stigma of the impairment.  Having role models and seeing more co-workers accommodated will continue to make accommodation easier.  There may be no hardship involved in accommodating if the environmental barriers no longer exist.  If accommodation is not needed, then the impairment is not likely a workplace disability. 

Technology is further enabling that potential.  Driverless cars, bionic hearing implants, thought-to-input devices, exoskeletons, and many other technologies are lessening the impact of physical impairments.  Our concept of “disability” is changing and our ability to accommodate is being enhanced.  Few would argue that the cost of providing technological aids would constitute an undue hardship.  Technology is making accommodation easier and, in some cases, costless or productivity enhancing to implement.    

Accommodations are not restricted to technological interventions.  There continue to be real barriers to accommodation of persons with psychological or mental conditions and impairments.  Persons with degenerative (Parkinson’s, certain cancers) and episodic conditions (epilepsy, migraines) are also harder to accommodate.  Whether because of fear or ignorance, co-worker or customer attitudes can be significant and continuing barriers.  How effectively are we accommodating persons with severe Turret’s ticks, schizophrenia, recurrent depression, post-traumatic stress disorder? 

Even industries with low injury rates may find it increasingly more difficult to accommodate workers with certain conditions as the prevalence of those already accommodated becomes significant in a department or organization.  Several employers have commented to me that past compliance with mandatory-reinstatement provisions leads to incrementally more difficult accommodation challenges for each new case.  These employers perceive the duty to accommodate as becoming more difficult.  
It may not have reached the point of “undue hardship” but is clearly a concern. 

One employer noted that about half the staff in her operation had one or more accommodations (some temporary because of recent work-related injuries, others permanent because of permanent work and non-work related impairments).  She was happy to support each individual but her concern over the increasing costs and declining competitiveness were obvious.  As more of the certain job requirements were concentrated on fewer non-accommodated staff members, she was concerned about increased risk of injury and the potential for resentment and increased risk in this group of workers. 

Is accommodation become more or less challenging?   The answer is both!  And that situation is likely to continue for some time.  With increasing numbers of older workers, the conditions and co-morbidity associated with ageing will become more prevalent.  The demand for certain skills in short supply may drive an increased “desire to accommodate” as the price of attracting or retaining certain expertise.  Innovation will also be required, not just to adapt and apply new technologies but also to reorganize the way work itself is performed. 

The question itself, however, masks the reality of work environment.  The prevalence of persons with impairments that need accommodation is increasing and will continue to increase in our workplaces.  The biggest barriers to future accommodation are less likely to be the undue hardship of a technological aid.  Attitudes, static organizational structures and persistent prejudices are likely to continue to be the biggest barriers in the coming years.