Tag Archives: compensation claims

Looming Collapse of SSDI–What It Means

An extremely well written article from David Langham graces our Blogwire pages today. In it he recounts for us the looming financial collapse of the Social Security Disability Income program, or SSDI. Langham is the Deputy Chief Judge of Compensation Claims for the Florida Office of Judges of Compensation Claims and Division of Administrative Hearings. Within this jurist’s missive he provides one of the best breakdowns that I have ever read concerning the financial issues that program faces.

Bottom line? SSDI now supports over 11,000,000 people, and is projected to be broke within two years. Each and every full time worker in this country needs to cough up $750 a year just to maintain this entitlement program at its current levels (and it has grown 73% since 2000, so good luck with that).

Langham goes into excellent detail as to the causes of this unprecedented growth. There are a good number of contributing factors, including population growth, aging population, more working women eligible for the program, and expanded qualifications for disability. However, there is one postulation he did not make. That is the possibility that intentionally overworked Social Security Disability Administrative Law Judges find it much easier to approve cases than to deny them. I once heard of one judge indicating as much, saying that when he approves an application, it simply takes his signature. When he denies one, it requires many written pages of justification.

Approval in the face of an overwhelming workload, it would seem, is the path of least resistance.

One other very interesting tidbit that Langham provides: at one point during the economic downturn, an estimated 117,000 Americans “double dipped”, drawing simultaneous payments from both unemployment and SSDI. With one program dedicated to assisting people who cannot find work, and the other designed to support those who cannot work, how can that possibly be?

So we find ourselves with another bloated and overwhelmed government program screaming towards financial crisis, and a generally oblivious public will soon awaken (once again) to the fact that there is no such thing as a “lock box” or “government trust fund”. The money is gone. We’ve spent it all on underwear for the illegals streaming across our southern border.

Not to fear, however, for I have a solution for this mess. SSDI should hold a fundraising bake sale.

The pivotal bake sale has for decades been the go to solution for those programs in need of a cash infusion. Schools and churches have used them. Rush Limbaugh once famously orchestrated one in the 1990’s for a listener named Dan who couldn’t afford his subscription newsletter. Limbaugh told him to hold a bake sale, and over 100,000 people ultimately flooded downtown Fort Collins, CO the day of “Dan’s Bake Sale”. I believe some misguided people have even used them in some perverted “guns for cookies” exchange program. That endeavor failed miserably when they were robbed at gunpoint and someone stole their cookies. Seems they should have also traded for some ammo.

So why not an SSDI bake sale? Think of the pure numbers. There are 11,000,000 people in the program, presumably with a great deal of free time on their hands. If they all fire up their ovens and contribute to the effort, we’re talking one crapload of cookies and other baked goods available for sale. Granted, there are people receiving SSDI that are completely disabled, and would not be able to contribute to the effort, but many would still be able to do so.

There was the woman who once blasted me in my blog for using the word “entitlement”. She told me how difficult it was for her to get SSDI, and explained how she was entitled to it – without using the word entitled, of course. Her blog and Facebook page told us she was an active real estate agent, and owned a tax preparation service as well as a legal documents preparation firm. She could probably cough up some cookies, if she can get enough time away from her day jobs and cashing her disability checks. And of course, we have the 117,000 people who collected unemployment while on disability. We can safely presume if they are able to work, they are able to bake. And since they are on unemployment, they have the time.

So for sake of conjecture, let’s say that one half of the people on SSDI would have the ability for a short duration to make cookies or baked goods for one mammoth SSDI “Going Out of Business” Bake Sale. That means with 5.5 million people, baking, say 6 dozen cookies each, and selling them for $5 a dozen (this is a fundraiser, after all), we could raise $165,000,000 in a single afternoon, less location and promotion expenses.

As far as location, I figure we could use Tropicana Field in St. Petersburg, Florida, where the Tampa Bay Ray’s baseball team plays. There is ample parking, and the seats are almost always empty. Plenty of room for a ginormous bake sale.

Now, with the current SSDI burn rate of $12.4 billion a month, or $413,333,333.33 a day, the bake sale would only raise enough to fund the program for an additional 9 ½ hours.

But hey, it’s a start, and I haven’t even yet broached my idea of the SSDI “Going Out of Business Car Wash”.

Same-Sex Marriage: An Update on Handling Claims

The pace of legislative and judicial activity surrounding same-sex marriage has quickened.

Currently, 17 states plus the District of Columbia allow same-sex couples to marry. Several states have expanded the legal rights available to spouses in same-sex relationships through civil unions and domestic partnerships. On June 26, 2013 the U.S. Supreme Court ruled in  Windsor v. United States, No. 12-307 that section 3 of the federal Defense of Marriage Act (DOMA), which defines marriage, is unconstitutional. Since this decision, several state attorneys general have announced that they will no longer defend their state’s same-sex marriage bans.

Here is an update on the issue of same-sex marriage and claims handling considerations:

Same-Sex Marriage Overview

In the states that recognize these unions, the legal status of same-sex marriages is identical to opposite-sex marriages.

The first states that allowed same-sex marriage did so as a result of court decisions—Massachusetts in 2004, Connecticut in 2008 and Iowa in 2009. However, most states and the District of Columbia provided for same-sex marriage through legislation. Below is a summary of changes in the states over the past two years on this fast-moving issue:

2012

Washington

Legislation establishing same-sex marriage was approved February 2012, but opponents gathered enough signatures to put the issue on the November 2012 ballot. Voters upheld the law, and same-sex marriages began on Dec. 6, 2012.

Maryland

Gov. Martin O’Malley signed same-sex marriage legislation into law on March 1, 2012. However, opponents of the legislation obtained enough signatures to file a referendum challenging the law during the November 2012 election. The law was upheld by the voters and became effective on Jan. 1, 2013.

Maine

During the November 2012 election, voters approved a ballot measure legalizing same-sex marriage. The measure became effective Dec. 29, 2012.

New Jersey

The legislature passed a same-sex marriage bill in February 2012, but the measure was vetoed by Gov. Chris Christie. A legal challenge was raised to the state’s law that only provided civil unions for same-sex couples, and a lower court ruled that the state had to allow same-sex couples to marry beginning Oct. 21, 2013. After the New Jersey Supreme Court denied an appeal for delay, Gov. Christie announced that the state would drop its appeal, making same-sex marriage legal in New Jersey.

2013

Rhode Island

Gov. Lincoln Chafee signed legislation that legalized same-sex marriage, eliminated the availability of civil union and recognized civil unions and same sex marriage from other states on May 2, 2013. This bill became effective Aug. 1, 2013.

Delaware

Gov. Jack Markell signed into law on May 7, 2013, same-sex marriage legislation that also recognized civil unions and same-sex marriage from other jurisdictions. The law became effective July 1, 2013.

Minnesota

Following the defeat of a constitutional prohibition of same-sex marriage during the November 2012 election, the legislation passed a bill allowing same-sex marriage May 2013. The law went into effect on Aug. 1, 2013.

California

On June 26, 2013, the U.S. Supreme Court declined to decide the California challenge to Proposition 8, concluding that it had no authority to consider the question in the case. The effect of that decision was to reinstate the federal district court decision overturning Proposition 8, thus allowing same-sex marriage in California.

Hawaii

During a special session held in October and November 2013, same-sex marriage was passed after both houses agreed to the addition of an amendment that strengthened the exemption of religious organization from being required to provide facilities, goods or services for the marriage or celebration of the marriage if it violates their religious beliefs. Gov. Neil Abercrombie signed the bill on Nov. 13, 2013, and it became effective on Dec. 2, 2013.

Illinois

Gov. Pat Quinn signed Senate Bill 10 into law on Nov. 20, 2013, and same-sex marriages will be available beginning June 1, 2014. A ruling by a U.S. district judge allowed residents of Cook County, Ill., to begin marrying on Feb. 21, 2014.

New Mexico

The New Mexico Supreme Court ruled on Dec. 19, 2013, that same-sex couples are allowed to marry. The ruling went into effect immediately.

Of the 33 states that still prohibit same-sex marriage, 29 have done so through constitutional provisions. Efforts to overturn state constitutional prohibitions have been initiated in the federal courts and have moved, or are about to move, into four federal appellate courts.

  • The Virginia case, Bostic v. Rainey, is expected to be appealed to the U.S. Court of Appeals for the 4th Circuit in Richmond, Va.
  • The Oklahoma case, Bishop v. U.S., 04-cv-848, U.S. District Court, Northern District of Oklahoma (Tulsa) is to be heard before the U.S. Court of Appeals for the 10th Circuit in Denver, Colo., along with the Utah case, Kitchen v. Herbert, 13-cv-00217, U.S. District Court, District of Utah (Salt Lake City). Oral arguments are scheduled to be heard separately for these two cases in April 2014.
  • The Nevada case, Sevcik v. Sandoval, 12-17668, will be heard before the U.S. Court of Appeals for the 9th Circuit in San Francisco, Ca.

In all four cases, the rulings are stayed pending appeal, meaning marriages cannot occur at this time. It is anticipated that the U.S. Supreme Court will be again asked to review this issue in 2015 or soon thereafter. Meanwhile, more action through legislation and ballot initiatives is expected to occur this year.

Civil Unions

A civil union is a category of law created to extend rights to same-sex couples. These rights are recognized only in the state where the couple resides, and no federal protection is included.

In 2013, the Colorado legislature passed a bill to establish civil unions for same-sex couples. The bill also provides recognition of civil unions from other jurisdictions. Gov. John Hickenlooper signed  SB 11 into law on March 21, 2013, and it became effective on May 1, 2013.

Delaware and Rhode Island replaced their civil union provisions with same-sex marriage, as previously occurred in Connecticut, New Hampshire and Vermont.

In Hawaii, civil unions remain available to same-sex and opposite-sex couples alike. The status of civil unions in Illinois and New Jersey are not yet clear with the legalization of same-sex marriage.

Domestic Partnerships

Domestic partnership is a civil contract between same-sex or opposite-sex, unmarried, adult partners who meet statutory requirements. Laws vary among states, cities and counties for domestic partnerships. Several states register these partnerships.

Washington has recently announced that registered domestic partnerships for same-sex partners will be converted to marriages on June 30, 2014, if marriage has not occurred or the partnership has not been dissolved by that time. The conversion will not apply to the domestic partnerships of heterosexual couples.

Reciprocal Beneficiaries

A reciprocal beneficiary agreement is a consensual and signed declaration of relationship for two adults unable to marry each other. Reciprocal beneficiary laws in Colorado, Hawaii and Maryland allow some benefits of marriage such as workers’ compensation survivor and health-related benefits.

Claim-Handling Considerations and Suggestions

The definitions of “spouse,” “dependent” and “marriage” are changing, and these changes affect the handling of casualty claims as we determine who is an eligible dependent or has legal standing to file certain causes of action. It is important that we are mindful of the state laws and any case law in the particular jurisdiction relating to same-sex unions.

Some state insurance departments have issued bulletins regarding their compliance expectations. For example, the Minnesota Departments of Commerce and Health issued  Administrative Bulletin # 2013-3 to advise property and casualty insurers that any policy issued in Minnesota on or after Aug. 1, 2013, providing dependent coverage for spouses must make that coverage available on the same terms and conditions regardless of the sex of the spouse. The bulletin reminds insurers that defining a spouse in a way that limits coverage to an opposite-sex spouse would be discriminatory and unfair and a violation of Minnesota Statutes section 72A.20, subdivision 16.

When evaluating the eligibility of dependents, one area of uncertainty involves same-sex couples that have a valid marriage but move to a state that does not recognize their marriage. The U.S. Supreme Court decision in Windsor did not address Section 2 of DOMA, which does not require states to give effect to same-sex marriages performed under the laws of other states. In the past, most federal laws looked to the state of residence at the time benefits are sought, rather than where the marriage occurred.

In response to the U.S. Supreme Court DOMA decision, the U.S. Department of Labor published  Technical Release  2013-4 on Sept. 18, 2013. This release indicates that the rule of recognition to be applied is based on the state where the marriage was celebrated, regardless of the married couple’s state of domicile. Guidance is also provided on the meaning of “spouse” and “marriage,” as these terms appear in the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), and the Internal Revenue Code that the department interprets.

This release likely also applies to the following four major disability programs administered by the Department of Labor's Office of Workers’ Compensation Programs (OWCP):

  • Longshore and Harbor Workers' Compensation Program and its extensions, including the Defense Base Act
  • Energy Employees Occupational Illness Compensation Program
  • Black Lung Benefits Program
  • Federal Employees' Compensation Program

Additional recommendations include:

  1. Ascertain whom the employer shows as the spouse.
  2. In addition to determining marriage or civil union, domestic-partnership registration should be confirmed.
  3. If interviewing a claimant in a jurisdiction that recognizes same-sex unions, in addition to “spouse” add the terms “domestic partner or designated beneficiary” to the questions.
  4. It might be necessary to find out when and in what state the marriage occurred.
  5. Any questions or concerns should be discussed with your supervisor, team leader, manager or defense attorney.

Sometimes, our duties as claims examiners are affected by laws seemingly unrelated to insurance. It is important that we consider the impact of headlines and changes in the law on our handling of workers’ compensation claims.