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October 16, 2016

Return to Work Remains a Problem

Summary:

Legislative efforts in California on return-to-work have largely been limited to the voucher, an at-best-meager training program.

Photo Courtesy of sxates

According to one published report, (WorkCompCentral, March 4, 2016, “$100 Million in Workers Benefits Sits Unused”), only 3,955 checks have been issued to injured workers from the Return to Work (RTW) Fund established in Senate Bill 863. The checks total slightly less than $20 million, leaving an additional $100 million untapped by injured workers. According to regulations of the Department of Industrial Relations (DIR) that administers the fund, workers receive a $5,000 allowance if they have been issued a Supplemental Job Displacement Benefit (SJDB – commonly referred to as a “voucher”). The voucher is issued if the employer at injury fails to make a qualifying offer of employment to the worker.

While the provenance of the RTW Fund has been criticized – largely by those not in the room to witness its birth – there are more fundamental issues with the fund and its administration. First, the RTW Fund really has nothing to do with return to work.

It can be fairly assumed that the use of that particular section of the Labor Code – Section 139.48 – was a legal accommodation because there was existing statutory reference to the RTW Fund in Labor Code Section 62.5 – specifically Sec. 62.5(a)(1)(B). Section 62.5 is the Workers’ Compensation Administration Revolving Fund statute. That reference, in turn, was to the RTW Program that was originally created more than 15 years ago in Assembly Bill 749 as a mechanism to partially subsidize certain employers who brought injured workers back to work. The employer subsidy as originally enacted was for wages and worksite modifications. Later, Senate Bill 899 further revised the RTW Program to limit the reimbursement to worksite modifications and to expend funds on an “as available” basis. The RTW Program sunset on January 1, 2010, but while Labor Code Sec. 139.48 was taken out of the code, the reference to the RTW Fund in Sec. 62.5 remained.

See Also: A Physician’s View of ‘Return to Work’

Once one gets past the title of “Return-to-Work Program,” however, there is no evidence to suggest that Sec. 139.48 has anything to do with returning a worker to employment with the employer at injury – or anyone else for that matter:

“139.48. (a) There is in the department a return-to- work program administered by the director, funded by one hundred twenty million dollars ($120,000,000) annually derived from non-General Funds of the Workers’ Compensation Administration Revolving Fund, for the purpose of making supplemental payments to workers whose permanent disability benefits are disproportionately low in comparison to their earnings loss. Moneys shall remain available for use by the return-to-work program without respect to the fiscal year.

“(b) Eligibility for payments and the amount of payments shall be determined by regulations adopted by the director, based on findings from studies conducted by the director in consultation with the Commission on Health and Safety and Workers’ Compensation. Determinations of the director shall be subject to review at the trial level of the appeals board upon the same grounds as prescribed for petitions for reconsideration.

“(c) This section shall apply only to injuries sustained on or after January 1, 2013.”

The history of Labor Code Sec. 139.48 is also influenced by the Commission on Health & Safety & Workers’ Compensation (CHSWC) publication, “Report on the Return-To-Work Program Established in Labor Code Section 139.48” (2009). The most telling aspect of that report was the “alternative” recommendation to the Legislature: “California may wish to consider eliminating the program. California may wish to consider a program that more directly assists injured workers who are unable to return to their previous jobs.” (p.7) Given that the program sunsetted roughly eight months later, the commission’s recommendation is almost prophetic.

Three years later, as required by SB 863, the DIR conducted an independent study to determine how best to structure the RTW Fund in the new and improved Labor Code Sec. 139.48. That responsibility fell upon the ubiquitous RAND Corporation, whose 2014 report, “Identifying Permanently Disabled Workers with Disproportionate Earnings Losses for Supplemental Payments” is the foundation for the current RTW program. Among its recommendations were to make eligibility for the program dependent on receiving a voucher. According to RAND, approximately 20% of injured workers receiving permanent disability benefits receive a voucher. (p. 12) Under RAND’s scenarios, and anticipating utilization of the RTW fund at the same approximate levels as the vocational rehabilitation program repealed in 2004 by Assembly Bill 227 rather than their observed voucher utilization figures, RAND estimated roughly 24,000 injured workers would access the RTW Fund, thus resulting in about $5,000 per recipient to exhaust the $120 million annual assessment.

So while that explains where we are today, it also raises questions about whether the current RTW program suffers from the same lack of awareness that caused its statutory predecessors to go quietly away. But that also raises the bigger issue: What has happened to re- employment as an objective of the system over the past 20 years?

The history of vocational rehabilitation in California’s workers’ compensation is a long one – culminating in the repeal of the mandatory vocational rehabilitation program in AB 227 and the repeal of vocational rehabilitation as a compensable benefit with the amendment to Labor Code Sec. 3207 in SB 899. Legislative efforts trying to suggest that return to work is still important in the workers’ compensation system have largely been limited to the voucher, an at-best-meager program that is intended to try to put the injured worker on the path toward gaining skills to find new employment. In no way, however, is it as robust as the former vocational rehabilitation program. It is, regrettably, a $6,000 check, with some restrictions, that is intended to finalize the severing of the tie between an injured worker and the employer at injury.

See also: Return to Work Decisions on a Worker’s Comp Claim  

To paraphrase Will Turner in Pirates of the Caribbean, “That’s not good enough!”

As we move forward and discuss a whole host of issues in the workers’ compensation system, such as utilization review, the use and abuse of opioids, prescription drug formularies, independent medical review and permanent disability ratings, perhaps someone, somewhere, likely in either Oakland or Sacramento, should talk about re-employment of disabled workers.

Not some resurrection of vocational rehabilitation and what became its abuses but, rather, simply how to help workers unemployed due to a disabling injury at work to have the same access to re-employment assistance as disabled or otherwise unemployed workers whose access to re-employment assistance is defined by multiple state and federal programs and not by extracting some form of payment from the employer at injury.

There is no shortage of programs that could provide such assistance. And perceived unintended consequences that expanding the scope of re- employment assistance beyond the employer at injury would increase the number of workers unemployed after a workplace injury are unlikely given the protections of the Fair Employment and Housing Act (FEHA), the Americans with Disability Act (ADA) and Labor Code Sec. 132a.

According to the Workers Compensation Insurance Rating Bureau (WCIRB), in calendar year 2014 roughly $29 million was spent on vouchers. Labor Code Sec. 139.48 assesses $120 million annually. One should ask whether that money would be better spent providing access and coordination to the host of re-employment programs offered by the Department of Rehabilitation, the Employment Development Department (CalJOBS), non-profit private companies, such as Goodwill Industries, that offer re-employment assistance, and a host of federal programs, including those offered from the U.S. Department of Labor, Office of Disability Employment Policy and the Social Security Administration’s Plan To Achieve Self-Support (PASS).

In today’s complex world we simply cannot expect the employer at injury – especially the small to medium-sized employer – to provide all the resources necessary to facilitate meaningful re-employment for injured workers who are permanently disabled. Expanding the concept of re-employment and coordinating programs designed to create jobs for the disabled is a logical step forward to address this problem. No amount of vouchers or RTW fund disbursements will ever be a viable substitute for a job.

The sooner we realize this and look to Sacramento and Washington to break down the barriers created by the workers’ compensation system to full access to re- employment resources for disabled workers, the better.

 

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About the Author

Mark Webb is owner of Proposition 23 Advisors, a consulting firm specializing in workers’ compensation best practices and governance, risk and compliance (GRC) programs for businesses.

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