Tag Archives: maryland

Is Mediation Effective in Workers’ Comp?

Babe Ruth’s lifetime batting average was .342. Studies in states with a history of workers’ compensation mediation suggest your success rate with it is likely to be a whole lot better.

In Florida, parties must mediate workers’ compensation claims within 130 days of the filing of a petition for benefits. Results for the fiscal year ended June 30, 2013, showed a 74% success rate, defined as partial or complete resolution of the issues.

The Minnesota Department of Labor and Industry reported that the state’s mediation resolution success rate between June 2007 and September 2008 was never less than 60%. The success rate was 100% in four of those months.

The Maryland Judiciary’s Mediation and Conflict Resolution Office conducted a study where half of Baltimore’s workers’ compensation filings were referred to mediation. The 2002 report details the results. Measured at various points in the litigation process, the mediated cases were consistently found to conclude more quickly and with less discovery than the control group. For example, 83% of cases in the workers’ compensation mediation group were disposed of before their scheduled trial date, compared with 70% in the control group.

In 1992, the Dallas Mediation Project reviewed 981 mediated cases. Workers’ compensation, contract disputes and collection cases showed the highest level of resolution—87% of these workers’ compensation cases settled through mediation. Motor vehicle claims settled 85% of the time, and other personal injury claims settled 77% of the time.

Don’t be afraid to step up to the mediation plate. You might hit a home run.

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.

Flo Won't Handle Your File: Claims in the Social Media Age

Viral phenomena on the Internet more frequently concern “Cats that Look like Hitler” or racy photos of Prince Harry cavorting in Las Vegas.

Insurance claims rarely go viral on social media, but that changed recently with a controversial underinsured motorist claim involving Progressive Insurance Company. You can find background on the case here.

The sad facts here are straightforward. Progressive Insurance Company policyholder Katie Fisher died in a 2010 automobile crash in Maryland. Allegedly, the other driver ran a red light, though there was a dispute as to who had the green light and the right-of-way. The driver that struck Katie’s vehicle was under-insured. The good news: Katie had bought underinsured motorist coverage (UIM).

The bad news: to collect, Katie’s family had to sue the other driver for negligence to force Progressive to pay. However, when the family sued the other driver, Progressive’s attorneys associated with the other driver’s attorneys to defend the liability claim. As a result, the deceased’s brother went viral in social media rounds, complaining that Progressive used premium dollars to defend his sister’s killer in court. That makes for an arresting headline.

This claim illustrates the importance of an insurance company being attuned to social media and having a social media policy. Of course, here Progressive did not stick its head in the sand. It did not ignore the social media buzz surrounding its handling of the case. Apparently, it responded but responded in a way perceived as tone-deaf.

Progressive In A Lose-Lose Situation?
Maybe Progressive Insurance Company was in a no-win situation. If it ignored the social media banter about its stance, consumers would accuse it of insensitivity. It entered the dialogue to justify its actions. In so doing, people accused it of being tone-deaf to consumer sensitivities. I don’t know what response Progressive could have launched on social media that would have satisfied its critics.

This vignette underscores how little people understand what they buy when purchasing underinsured motorist coverage. Buying underinsured motorist coverage essentially risks putting you at odds with your own insurance company. In such a claim, your own insurance company is incentivized to show that you in fact were at fault for the accident and/or that your injuries were not the result of the negligence of an underinsured driver. People assume that the insurance company to whom they paid their premiums will always be on their side. Typically, this is the case. Typically, this is the alignment of interests.

In underinsured motorist coverage and claims, however, “typical” doesn’t necessarily apply. Here, interests are aligned differently. Just because you pay your insurance company for the coverage doesn’t mean that — in a claim involving an underinsured adverse driver — your insurance company is going to act all soft and fuzzy.

Of course, insurance companies would not effectively market and sell underinsured motorist coverage if they made this reality explicit and spotlighted it in the sales process. People don’t think it through. Nobody really believes deep down they will be hurt due to the fault of an underinsured driver. If they pay for the coverage, perhaps they pay for it begrudgingly at best.

Policyholder Ignorance About Underinsured Motorist Coverage
So, those who say “Shame on Progressive” for its stance adverse to its own policyholder could add, “Shame on the policyholder” for not realizing the dynamics in underinsured motorist claims. Of course, it sounds callous to be lecturing a family on the dynamics of claims-handling when they have lost their daughter in a fatal car accident.

Further, there was a reasonable question of fact as to who had the right-of-way. Should Progressive and its adjusters have ignored evidence that the deceased may have been at fault in order to pay the claim? It’s difficult to fault Progressive’s adjusters here, as tempting as it may be to do so. There was a legitimate dispute as to who had the right-of-way and who ran the red light. Was Progressive wrong for exercising its legal right to seek a judicial determination of liability?

Personally, I don’t think so.

Nevertheless, insurance companies now face not just bad faith risks over how their claim department handles or mishandles an automobile loss. They also face reputational risks if disgruntled consumers take to Twitter, Facebook, blogs, Tumblr, etc. to air their gripes.

Internet Megaphones
The Internet and social media provides a bully pulpit and cyberspace megaphone for anyone who has a beef, whether that complaint is justified or specious. On the other hand, since everyone now has an electronic megaphone via the Internet, World Wide Web and social media, the cacophony of complaints can create a “white noise” effect that makes any one complaint difficult to stand out. This complaint did stand out, though, and got widespread media play.

While it is tempting to say “No comment” or “We won’t try our case in the media,” insurance companies — like other businesses — cannot take an ostrich approach and stick their heads in the proverbial sand.

The takeaways and lessons from this go beyond Progressive Insurance Company. Katie Fisher’s case illustrates that in the 21st century:

  • insurance companies must have social media policies,
  • they must monitor social media, and
  • they must be able to articulate a concise yet compelling message to an often skeptical audience.

It’s not enough to handle the claim conscientiously.

It’s not enough to handle it in accord with the policy conditions.

It’s not enough to comply with state insurance department regulations.

It’s not enough to believe that you acted in good faith.

If you have an under-insured motorist claim, you must realize that your adjuster will not be perky Flo from the TV commercials.

Insurers Need Social Media Strategy
This case study also spotlights the need for insurance companies to have a refined social media strategy. That goes beyond grappling with questions like, “Should we be on Facebook or Twitter?” or, “Should we have a blog?”

Sorry — those questions are so 2010. That no longer cuts it as a coherent social media strategy.

It’s no longer enough to have a digital footprint in the social media world. The content of what companies put out on social media is vital, scrutinized, and should promote their brand. Content is king.

Moreover, insurance companies must have institutionalized disciplines to monitor what is being said about them on social media so they can respond quickly and persuasively. The consumer conversation about your service and policies is going on — with you or without you. It is best that it goes on with you. It’s best that you have an opportunity to be aware of customer service firestorms brewing so that you have the opportunity to squelch them, address them and nip them in the bud.

You may have to justify your steps in the court of public opinion through social media or suffer the consequences of a public relations black eye if you hunker down and go incommunicado.

As this case study shows, adjusters are sometimes damned if they do and damned if they don’t.

Pay the claim in the face of conflicting evidence, and be second-guessed for poor decision-making by higher-ups. Contest the claim and align yourself with the other driver’s insurance company, and you get criticized in the court of public opinion for callousness.

No one promised adjusters a rose garden and they certainly don’t get to operate in one in the age of viral posts and social media!