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| | 2014 Onset Of Affect Agents For Workers’ Compensation Claims: The Affordable Care Act, A Botched Computer Upgrade, And All The Rest.
By Jorge Alexandria - January 23, 2014
I heard it somewhere but I can’t remember where, that before a wannabe journalist, columnist, or pundit can be licensed, he or she must first swear or affirm that each year in January (s)he will produce his/her thoughts of the year behind and discuss issues to watch in the year ahead. That includes a list of who or what is in, and who or what is out.
Impact Of The Affordable Care Act
There is much speculation about the potential impact that the Affordable Health Care Act (AHCA) will have on workers’ compensation. To no one’s surprise, the young and healthy are not clamoring for AHCA. In other words, the old folks are signing up faster than the younger “low risk” group. Put another way, there are not enough young adults around to support the aging (and now living longer than ever) population.
At some point, something has got to give with AHCA premiums hovering high and many people in possession of pre-existing conditions. These pre-existing ailments may well cross over into the state mandated system of workers’ compensation, where medical care is free to the claimant if the claimant can prove AOE/COE. Just as is the case with Medicare, there will be some overlap.
You are going to receive more calls than ever before from injured workers
With a botched California State EDD (Employment Development Department) computer upgrade, it is nearly impossible to reach an EDD representative these days. To further complicate matters, EDD representatives are only allowed to answer telephone calls from 8:00 am to Noon. The upgrade continues to delay processing of state disability insurance benefits.
As workers’ compensation is the secondary means or payer, on any given day, be prepared to be peppered with questions and to give straight answers to anxious injured workers who are desperate to reach a real human being. Injured workers typically apply for benefits in both the work comp and EDD forums as a precaution in the event they are turned down in one forum. Remember, you are EDD’s backdoor to calls. I would be tempting to return the favor and give out EDD’s unlisted telephone numbers to the injured workers. I think all adjusters have (or should have) them.
Nowadays, even seasoned claims professionals do not get a fair shake from the industry that can dictate the rules in this now buyers’ market. No college diploma, no job—not even as a claims assistant. The college degree was the new high school diploma in the 1970s but not in the 1980s or 90s. Then in the great Recession of 2008 it became the new minimum requirement again, albeit an expensive one, for getting even the most basic adjuster job. In my experience, claims adjusters are the front line in customer service, and often make the difference in client retention. They should be paid well. However, this is not going to happen without knowledge.
Claims adjusters, even seasoned ones, must pursue claims industry designations such as WCCA, WCCP, or ARM. They must regularly attend seminars to keep up to date. We all have to acknowledge that workers’ compensation is a very technical, complex area of law that requires special knowledge and skills. The job market is opening up a bit but it is still not blooming with opportunities as in years past prior to the Recession.
Social media will continue to aid insurance fraud investigations
Facebook, Twitter and other social media are good tools in the investigation of fraud. Adjusters, investigators, and legal professionals can find photos, employment information, past education, and also see who is interacting with the claimant. Adjusters are often helped in their quest by the very subjects they are investigating—the claimants themselves. Injured workers tend to consider social media to be their “virtual water cooler” and they post photos of themselves boasting their physical prowess or showing their skills on You Tube (i.e. dancing in a competition or playing basketball) while collecting Total Temporary Disability (TTD) benefits.
State Legislative Issues
Years ago while in graduate school, a political science professor told me that if you introduce a bill on any subject and use the word “reform” in its title, that alone will guarantee it 49% of the vote. Several years later, I ran the idea by an attorney/lobbyist friend of mine. After some careful thought, he said it was probably correct that with “reform” in the title you had a likely winner.
With this in mind, it is conceivable that California may get another bite at the apple and clean-up what the last great “reform” of 2012, SB 863, failed to do. When California passed SB863, the expectation was that it would increase benefits to injured workers, while lowering costs for employers in the state. Litigation and unanticipated consequences of the bill have resulted in increased complexity and continually rising insurance rates. In particular, medical vendors in California filed lawsuits to overturn the statute of limitations to file a lien, the $150 filing fee, and against the provision of the bill that prohibits providers from selling their uncollected debt to third parties. So far, there is an injunction on this matter. Nonetheless, these liens continue to choke the WCAB and they take up considerable WCAB time which could be better used to adjudicate claimant/indemnity related issues (i.e. AWW, TTD, PPD).
Rates Will Continue To Climb
Rates for workers’ compensation insurance will continue to rise. Rates are being driven by rising medical costs, the unfulfilled promise of SB 863 savings, and the WCIRB’s projected 5% increase in claim frequency during the first nine months of 2013. Also, payroll, which is connected to premium, will rise with the new minimum wage requirement in California of $9.00 an hour effective July 1, 2014 and $10.00 in 2016. This brings me to a very important point: while a high enough minimum wage may have an effect of raising premiums, it helps the low wage injured workers and provides a big enough incentive for him or her to return to work. A minimum wage increase could also have a small, stimulative effect on the state’s economy, as low wage workers spend their additional earnings.
In closing, I wish for all legitimately injured workers to obtain the coverage and benefits they deserve, and that all claims adjusters will prosper and receive raises in 2014. Keep up the good work. It looks like we will have an interesting year ahead.
Jorge Alexandría is a U.S. Army veteran who received his B.A. in Political Science from Cal State Los Angeles, and graduated from Cal Poly Pomona with a Master’s Degree in Public Administration.
He holds both a California Workers' Compensation Claims Professional (WCCP) designation and the State of California’s Self-Insured Administrator’s License. He has more than 20 years of experience in claims handling, supervision, and risk management.
He currently practices federal workers’ compensation of maritime interest.
He can be reached at Riskletter@mail.com. The views and knowledge expressed in this article are Jorge Alexandría’s alone.
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