Workers’ compensation system

L. Matthews. Jefferson, NC McFarland, 1998. Contains chapters written by a psychologist, an attorney and two physicians with expertise in MCS. A medical section addresses porphyria, SPECT scan studies, and psychological issues related to MCS. A legal section discusses how one state s workers compensation system fails workers in a toxic age. A personal section discusses the author s experience in the workers compensation system science and the literature is addressed in yet another section. 

In those jurisdictions where a formal workers compensation system is in effect, the compensation health records provide the most definitive information available because the medical, social, and work history of each employee who applies for workers compensation is investigated in comprehensive detail and is made available in large part to management. Currently, relatively few illnesses, as compared to injuries, are considered for workers compensation claims. However, if a cluster can be found with the same type of complaint, that information can be invaluable. Similar information can be obtained from private insurance companies who provide employee coverage in place of workers compensation. 

Cases involving workers who injure themselves on the job are subsumed by the workers compensation system. The relationship between workplace-caused sleep deprivation and injury is another area in which the traditional scope of liability has been expanded. 

The situation appears more alarming when we consider figure 1.2. After the obligatory dip for the 1982 recession, the number of lost workdays per employee virtually explodes the increase is more than 30 percent Is this an accurate reflection of changing safety conditions during the 1980s Some say that it is not, that the numters reflect a milking of the workers compensation system by dishonest workers... 

Workers compensation is Just such a system. It provides mandatory no-fault disability and death coverage for injuries and, to a lesser extent, illnesses arising on the job, financed entirely by employer contributions. To the extent that it is experience-rated, each employer s payment into the system is equal to the anticipated claims of his or her workers (tt c). All of the provisions of workers compensation are well-known in particular, workers can know with a high degree of certainty with what likelihood and to what extent they will be compensated in the event of an accident on the job. Thus the conventional economic view, predicated on the market determination of wages and working conditions, predicts that neither employers nor workers should care one way or another about the existence of the workers compensation system or the benefits it provides. 

Since output is fixed, the firm s economic problem is to minimize the sum of labor costs and safety costs. In this example, each foreman is paid 100,000 and each construction laborer is paid 40,000. Each accident costs 30,000 in terms of replacement labor and capital costs. These are the only costs associated with on-the-job accidents. Initially, suppose a workers compensation system is in place that only pays some of the lost wages after the waiting period, though the firm s HRM practices allow workers to use their sick-day benefits to replace their lost wages for the first three days following an injury. Hence, injured workers bear some costs of workplace injuries, though not any costs associated with the waiting period. 

Table 3.4 Weibull Estimates of the Duration of Nonwork Spells in the Workers Compensation System The Direct Effects Model (standard error in parentheses) ...

Dependent variable log of nonwork spell in the Minnesota workers compensation system... 

NWSPELL Duration of nonwork spell days of temporary total disability benefits paid in the workers compensation system 55.78 140.91... 

LnRRATE Log of wage replacement rate in Minnesota workers compensation system 4.28 (73.40) 0.19 (14.41) ... 

Workers Compensation System The Direct Effects Model... 

In general, virtually all workers compensations systems are fundamentally no-fault mechanisms through which employees who incur work-related injuries. 

In general, most workers compensation systems possess the following features ... 

Every state in the United States has a workers compensation system. There may be variations in the amounts of benefits, the rules, administration, etc., from state to state. In most states, workers compensation is the exclusive remedy for on-the-job injuries and illnesses. 

Most workers compensation systems include wage-loss benefits (sometimes known as time-loss benefits), which are usually between one-half and three-fourths of the employee s average weekly wage. These benefits are normally tax-free and are commonly called temporary total disability (TTD) benefits. 

Most workers compensation systems require payment of all medical expenses, including hospital expenses, rehabilitation expenses, and prosthesis expenses. 

When an employee incurs an injury or illness that is considered permanent in nature, most workers compensation systems provide a dollar value for the percentage of loss to the injured employee. This is normally known as permanent partial disability (PPD) or permanent total disability (PTD). 

Administration of the workers compensation system in each state is normally assigned to a commission or board. The commission or board generally oversees an administrative agency located within state government that manages the workers compensation program within the state. 

Most state workers compensation systems possess some type of administrative hearing and appeal process. ... 

The results in Tables 5-2 and 5-3 also reveal the implications of extreme changes in the basic parameters of the workers compensation system such as the degree of experience rating and the accuracy of state verification. Applications for claims are the most sensitive to extreme changes in the insurance program parameters with claims paid moderately sensitive, and injuries insensitive to either experience rating or accuracy of state verification. 

To a limited degree the current workers compensation system penalizes nonnegligent parties and rewards negligent parties in an industrial injury. WC makes safety conscious employers pay medical and income replacement benefits when not at fault and only partially compensates careful workers for their injury costs. Similarly, WC less than folly penalizes careless employers by requiring they pay less than foil compensation for injuries and less than folly penalizes careless workers by providing support for injuries. Under workers compensation as... 

For certain workers compensation systems falling under state jurisdictions, the method for tracking and reporting injuries, illness and deaths may also differ from the above examples. Today, safety records may differ also by country and standards organization. One should investigate the current applicable standards that might apply. 

The prevention of occupational injuries and illnesses will definitely reduce the cost of workers compensation premiums. It does not matter whether the company pays into the state workers compensation system or is self-insured. What motivates most employers to reduce workplace injuries and illnesses is usually dollars. Some studies show that other benefits result from a decrease in the number of injuries and illnesses. For example, employers can expect to increase attendance, morale, and productivity. These are just a few of the side effects of reduced workers compensation costs. 

Occupational health and safety is another public policy area in which the broad current of social thought in favour of market solutions has been felt, especially in Australia. The claims mn parallel in some respects to those of the environmental debate government regulation is an inefficient way of ensuring worker health and safety it needs to be replaced with, or at least complemented by, a market approach this approach must restructure the market so that employers have an economic incentive to minimise occupational injury and disease. One suggestion made by some economists is to impose a no-fault injury tax on employers in proportion to the number and severity of injuries (Smith 1980). However, the best known method by which costs may be imposed back on the company is the workers compensation system. 

But, despite all this, compensation pressures can generate real health and safety improvements. This chapter has laid the foundation for a discussion of how compensation costs can be used to focus management attention on safety. This discussion will be undertaken in Chapters 11 and 12 where the particular task will be to identify ways in which governments, health and safety officers and others can best harness whatever safety potential there may be in the workers compensation system. 

It should be noted that even if the workers compensation system were extended in such a way as to include the self-employed the... 

In its simplest case it involves extremely creative approaches to rehabilitation that bring new meaning to the term walking wounded . In the most extreme case it may involve a company in effect acting as a self insurer in order to hide injuries from the Joint Coal Board workers compensation system and the statistics that come from it. 

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