Tag Archives: massachusetts

Marijuana and Workers’ Comp

I read an interesting story recently on the front page of Yahoo.com titled “ESPN’s NFL player poll about marijuana had some surprising results.” I then read the source article on ESPN.com, “Survey: Two-thirds of NFL players say legal pot equals fewer painkillers.” The title is fairly self-explanatory.

First, just to ensure we’re on the same page: This is a workers’ compensation issue. The NFL is an employer. The players are employees. The gridiron is a workplace. Pain and injury are realities for the vast majority if not all players/employees at some point in their careers.

See also: 4 Goals for the NFL’s Medical Officer  

The survey was of 226 players, 11% of the total number of players on active rosters and practice squads. So I would consider it a statistically significant sample, and, depending on how the 226 were selected, likely reflective of the full population.

Following are the highlights as tweeted out by @ESPNNFL:

  • Nearly three-quarters of NFL players surveyed (71%) say marijuana should be legal in all states.
  • About one-in-five (22%) say they’ve known a teammate to use marijuana before a game.
  • Two-thirds (67%) say the NFL’s testing system for recreational drugs is not hard to beat.
  • When asked which was better for recovery and pain control — marijuana or painkillers — 41% say marijuana, compared with 32% for painkillers.
  • More than half (61%) say that, if marijuana were an allowed substance, fewer players would take painkillers.

Do these results scare you? Probably depends on the personal opinion you held before you read them. Do these results surprise you? They shouldn’t. According to the Associated Press-NORC Center for Public Affairs Research survey of 1,042 adults in February 2016:

  • 61% said marijuana should be legal, and of those …
  • 33% with no restrictions
  • 43% with restrictions on purchase amounts
  • 24% only with medical prescription

Add to those figures the five states (Arizona’s Proposition 205, California’s Proposition 64, Maine’s Question 1, Massachusetts’ Question 4, Nevada’s Question 2) that voted last Tuesday whether to legalize recreational marijuana. (Legalization was approved in California, Massachusetts, Nevada and Maine — though by such a close vote in Maine that a recount is being requested. The pro-legalization side appears to have lost in Arizona, but the vote is still being counted.) Add to that four other states (Arkansas, Florida, Montana, North Dakota) that will vote on medical marijuana legalization. (Legalization was approved in all four states.) All of that means the landscape looks very different than it did a week ago.

So if you are a private or public employer, an insurance company, a work comp stakeholder, a clinician, a politician or state regulator … How different do you think your specific constituency is from the numbers listed above? My educated guess is that both surveys are fairly representative of the U.S. (the only other country that I’ve been following is Canada, which appears to be along the same trajectory in public opinion). Which means the numbers above are likely to guide coming public policy.

See also: How Literature and the NFL Shed Light on Innovation

So what does this all mean for the workplace? Of paramount importance is to have a jurisdiction-specific (because all states are different) drug policy (pre-employment, post-accident, return-to-work) that explicitly addresses marijuana (because presence does note equal impairment, a characteristic unique to marijuana among intoxicants).

And … keep your seatbelts handy.

Obamacare Backlash: What Comes Next?

The firestorm over comments made by MIT economist Jonathan Gruber has not helped the cause of the White House and defenders of the ACA in Congress. The historical landslide in the recent mid-term elections will also bring a major legislative backlash in the new House of Representatives and U.S. Senate early in 2015.

I had high hopes for the ACA. I have been a supporter of healthcare reform dating back to my college days and at graduate school many decades ago. The goals of universal coverage, elimination of pre-existing condition limitations and allowing dependents to stay on their parents plan until age 26 are all things I fully support.

However, the rollout of the ACA was a debacle. The campaign promise that, “You can keep your plan if you like it” and that “you can keep your doctor” was given 4 Pinocchios by the Washington Post, not exactly a friend of the GOP. Ask Nixon.

Now after the self-proclaimed architect of the ACA touts the lack of transparency in the design of the ACA to fool the American voters and how stupid “we” are, don’t expect a warm and fuzzy reaction in a GOP-controlled Congress. House Democratic leader and the White House are now busy “misremembering” the major role that Gruber played in drafting the ACA and are hoping the public will eventually, too.

What’s next? Both the House and the Senate will vote to repeal Obamacare in January. The House has already done this a few dozen times, but now Harry Reid can’t block a vote in the Senate. The president will veto this legislation. There will be political grandstanding with press conferences and dire predictions on both sides. Nothing will happen. There is a very little, if any chance, the GOP will have the votes to override a presidential veto.

What will most likely pass is a repeal of the tax on medical device manufacturers, which reportedly has bipartisan support. This will be problematic to the president and ACA supporters, because this will directly affect the proposed financing of the ACA. That lost revenue will have to be accounted for. Let me guess? Higher costs to consumers and companies providing health benefits to employees and their families? Is that correct, Mr. Gruber?

What will also likely pass Congress is a bill repealing the little-known provision providing a safe harbor to health insurance companies under the ACA, which essentially allowed a federally financed bailout if they end up losing money.

The ACA is here to stay, in my opinion, but incremental changes will be attempted. The GOP will support legislation to lower malpractice costs, allow small employers to band together in purchasing cooperatives, allow health insurance to be sold across state lines and make the implementation and administration of the ACA a state responsibility and not run by the federal government.

The president’s own recent in-house advisory group recommended that the ACA be run by the states, because healthcare, like politics, is all local. This received very little, if any, play in the mainstream media. In fact, at least two major, national, mainstream news outlets have yet to even mention the controversy surrounding Jonathan Gruber’s videotaped comments and the firestorm it has created.  I guess they misremembered to run the story.

Finally, for other possible changes, see a previous article of mine at Insurance Thought Leadership on April 9, 2014, regarding how the ACA has gutted major elements of the bipartisan healthcare reform efforts in Massachusetts by virtually eliminating experience rating for small to mid-size employers.

Gruber predicted health insurance premiums are going down because of the ACA. Please tell that to all the small and mid-sized employers across the U.S.  I have not heard from one whose costs are going down. Maybe they misremembered.

It’s time to fix the ACA with a bipartisan effort and study what works and what doesn’t, and certainly not be based on what someone in an ivory tower believes. He thinks we all are stupid anyway.

A Quiet ACA Waiver — and Needed Change

Massachusetts has been on the forefront of American history since the days of Paul Revere and the Boston Tea Party. It is also the state that inspired the Affordable Care Act, a.k.a. Obamacare, by its groundbreaking universal coverage law implemented under former Gov. Mitt Romney. What has received very little, if any, national media coverage is that the heavily Democratic-controlled state of Massachusetts quietly filed for and was granted a three-year waiver on how premiums are calculated under the ACA for small employers.

The waiver request was so quiet that the Boston Globe reported that Gov. Deval Patrick, a friend and supporter of the president, signed the legislation on the Friday afternoon before the July 4th weekend last year “in private when the statehouse was empty and the majority of voters were on vacation.”

One of the major negative consequences of Obamacare for small employers in Massachusetts and throughout the country is that the ACA destroys the entire concept of “experience rating.” Experience rating has been the cornerstone of how workers’ compensation insurance premiums are calculated since time immemorial. In simple terms, employers’ workers’ comp premiums are based on the type of industry in which they operate, the number and type of employees they have and their historical safety record. Employers with great safety records pay less for insurance, and employers with poor safety records pay more. This approach is not only fair but gives employers a strong financial incentive to provide a safe workplace.

After enactment of the Massachusetts universal coverage law, (which I am told was only 70 pages long, compared with the ACA's 2,000-plus pages and growing) employers’ health insurance premiums were 15% above the national average and the most expensive in the nation. Now, under the ACA, Massachusetts health insurance premiums are projected to go up 50% for the majority of small employers.

The basic issue is that the Massachusetts universal coverage law used nine rating factors to calculate premiums for small employers. These include discounts for using healthcare insurance purchasing cooperatives and for providing a safe workplace. Those nine factors are now preempted under the ACA and have been replaced by only four: age, family size, location and smoking habits.

The Chamber of Commerce and other small-business groups protested the changes vehemently. Gov. Patrick said he privately asked for a waiver and was told “no” by the president and the Department of Health and Human Services. Obviously, it would be a political embarrassment to the president if the place where his healthcare reform began, and one of the “bluest” states in the nation, publicly requested a waiver. However, the state legislature overwhelmingly voted to require the governor to do so.

Massachusetts was, in fact, granted a three-year waiver on the ACA's requirements on rating factors. The request for a permanent waiver was denied last September by Secretary Kathleen Sebelius at HHS.

Of course, “progressive” healthcare reform advocates opposed the waiver, stating that it would be “unfair” to other employers. How is it unfair that employers who promote wellness and a safe workplace are rewarded for their efforts with reduced premiums?

A study by the Pioneer Institute predicts that Massachusetts employers will now have to cut back on employment and the number of insured. Tell me, how is that “progressive”?

The Massachusetts Department of Insurance has reported that a study by the state’s health insurers predict that 60% of small employers will see a 50% or greater rate increase after the waiver expires in 2016, on top of the normal yearly increases.

The president, during his State of the Union address, challenged anyone to identify changes needed to the ACA. Maybe it’s time to dump the ACA premium rating factors in the Boston harbor like the British tea and restore full-blown experience rating for small employers in Massachusetts and in the rest of the nation.

States of Confusion: Workers Comp Extraterritorial Issues

As states passed workers compensation laws, each state established its own system. This resulted in a mishmash of laws, benefits, compensability and eligibility from state to state. Courts have ruled that a state has the right to apply its own workers compensation rules and standards to each case. Hence, most states simply don’t care what other states allow, only what is required under their workers compensation laws. There is little meaningful cooperation or coordination among states. Challenges for agents, employers, insurance companies and adjusters include understanding:

  • When coverage is required in jurisdictions where the employer has operations or employees working, living or traveling in or through.
  • How coverage is provided for various jurisdictions.
  • What jurisdictional benefits an employee can collect.

The policy

The two items that reference what states are insured under a workers compensation policy are 3.A. and 3.C. on the information page. (Federal coverage can only be added by endorsement.) 3.A. is fairly simple. The insurance agent for the employer instructs the insurance carrier to list the states where the employer operates when the policy goes into effect or is renewed. 3.C. is a safety net – at least most of the time. That item lists states where an employer expects it may have employees traveling to or through or working in. If an employer begins work in any state listed in 3.C. after the effective date of the policy, all provisions of the policy apply as though the state were listed in 3.A. Notice must be given “at once” if work begins in any state listed in 3.C., although “at once” is not defined in the policy. If the employer has work in any state listed in 3.C. on the effective date of the policy, coverage will not be afforded for that state unless the carrier is notified within 30 days.

It should be noted the insurance policy does not determine what law applies at the time of injury. The law determines what is payable. In addition, note that the workers compensation policy does not apply to Ohio, North Dakota, Washington and Wyoming, “monopolistic” states where coverage may only be purchased from the state. Although larger employers may self-insure in Ohio and Washington (but not North Dakota or Wyoming), no private insurance carrier can write workers compensation coverage for an employer.

It would seem the safe bet is to add all states except monopolistic states to 3.A. However, most underwriters are unwilling to do this or even add the ideal wording for 3.C.: “All states, U.S. territories and possessions except Washington, Wyoming, North Dakota, Ohio, Puerto Rico and the U.S. Virgin Islands and states designated in Item 3.A. of this Information Page.” The reason for the underwriters’ unwillingness varies. Common reasons underwriters provide include:

Licensing issue

The insurer is not licensed in all states. Many regional insurers are only licensed in a handful of states while other carriers may only be licensed in one state…often for strategic reasons. Carriers frequently assert it is impossible — and possibly illegal — to list a state they are not licensed in (even though policies contain wording whose clear intent is to allow carriers to pay benefits in states where they are not licensed).

Underwriting considerations

The insurance carrier may not want to provide insurance in certain states it considers more challenging from a workers compensation standpoint or because carriers do not want to write in states where they have little or no claims adjusting experience, established provider networks and knowledge of the nuances of the law.

Underwriters’ lack of awareness or knowledge

Underwriters are not claims adjusters and do not always have a full understanding  of workers compensation’s jurisdictional complexity and the employer’s risk (no coverage) and agents’ risk (errors and omission claims) for not securing coverage for all states with potential exposure. Agents are often told the employer does not need coverage in the state in which the agent is requesting coverage — which the home or primary state benefits will pay. However, the chance that an employee will be successful in securing another state’s benefits — even if the employee is only there temporarily — is just too much of a risk.

Physical location

Carrier underwriters frequently cite the “physical location” — actually needing an address — as a roadblock to adding a state to 3.A. The National Council for Compensation Insurance (NCCI) has rules on this issue. Most states that follow NCCI rules allow entry of “no business location” — but not all.  States that follow NCCI rules (including the independent bureaus like Texas) will often modify some rules. Arizona, Kentucky, Montana and Texas do not allow “no business location.” It is a regulatory reporting issue. Possible solutions to secure 3.A. coverage include:

  • Providing an entry of “Any Street, Any Town” or “No Specific Location, Any City” for the state. Many carriers will use this.
  • Using an employee’s home address in the state if there is an employee working from home there.
  • Using the agent/brokers address if they have an office there.

Compliance

Only Texas and New Jersey have workers compensation laws that are elective. New Jersey employers still, in effect, cannot go without workers compensation insurance. In Texas, any employer can “unsubscribe” to the workers compensation system and “go bare” and be subject to the tort system. All other states require employers to purchase workers compensation insurance for their employees or qualify for self-insurance.

Which benefits apply? 

If an employer has employees traveling on a limited basis from their home states, the headquarters state may have established a time limit on coverage for out-of-state injuries. The most common limit is six months. This may be written into the statute or may be silent, but over time case law has made determinations. In other words, if an employee usually worked in Michigan but spent three months working on assignment in Kentucky and was injured in Kentucky, the employee would most likely still be eligible for Michigan benefits. In states with a timeline, an employee working in another state for more than the designated duration is no longer entitled to benefits in the home state, but the employee is probably entitled to the compensation in the state in which he or she is currently working.

One of the most important factors is that an employee injured outside of his state of residence may have selection of remedies (benefits) if he lives in one state and works in another. The Michigan employee injured in Kentucky may want Kentucky benefits because Kentucky has lifetime medical and Michigan does not. Or, an employee may have been injured on the way to work, and the state where she was injured does not allow for workers compensation in this circumstance even though this would be a compensable injury in the employee’s headquarters state. Perhaps there is a disqualification in one state because of, for example, an employee’s intoxication that would not be a disqualifier in another state. In addition, the maximum amount of income benefits available to employees varies considerably from state to state.

Piggybacking benefits

Piggybacking occurs when an employee files in one state and then in another state where he qualifies for additional benefits. What is allowed in additional payments will depend on the circumstances of the claim and the states involved. This issue has become particularly dangerous for employers that have not arranged coverage in other states because they are unaware there is an exposure there. The employer then becomes liable for the benefits due in the uninsured state, including all costs to adjust and defend the claim if litigated.

Typically, if an employee collects benefits in one state and is successful in perfecting a claim in another state with higher benefits, the benefits collected in the first state are offset from the second state’s benefits payment. For example, assume an employee collects $10,000 from Indiana then files in Illinois, which grants $18,000. Only the difference between $18,000 and $10,000, or an additional $8,000, would be paid. Employers with employees in both “wage-loss” and “impairment” states face an additional challenge: Employees could qualify for both states’ benefits with no offsets.

Most states don’t care what other states have allowed, only what is required under their laws. If the employee collected under another state’s law but qualifies in our state for additional benefits, well, so be it. If an employee has traveled to, through or lived or worked in another state to create a “substantial” relationship with the state, there is a very good chance he or she will be granted workers compensation benefits in that state.

State statutes, case law, common law and tests

State statutes, case law or the common law in a jurisdiction may influence what benefits an employee may collect. Various criteria that may apply include:

  • State of hire
  • State of residence
  • State of primary employment
  • State of pay
  • State of injury
  • State in agreement between employer and employee (unique to Ohio, and only Ohio and Indiana recognize the agreement)

The “WALSH” test is a good guide to questions to ask, in order of importance:

W   Worked – Where did the employee work most of the time?

A    Accident – Where did the accident occur?

L    Lived – Where is the employee’s home?

S    Salaried – Where is the employee getting paid from?

H    Hired – Where was the contract of hire initiated?

Just about all jurisdictions indicate an employee is entitled to the benefits of their state if the employee was working principally localized in the state, was working under a contract of hire made in the state or was domiciled in the state at the time of the accident. This is why “worked” and “accident” are given the most weight.

Reciprocity

Several states will reciprocate another state’s extraterritorial provisions. Each state has its own reciprocal agreements, with as few as a half-dozen states or as many as 30. For as many states that cooperate with reciprocity, just as many states will not.

In addition, not all reciprocity agreements address the “claims” aspect of compliance. In other words, the reciprocity means the employer does not have to secure “coverage” for an employee temporarily in another state; however, it does not mean that the employee could not pursue a claim in that state. If the employer was relying on the reciprocity provisions of the state law and did not secure coverage in that other state, the employer may be without coverage for that state and may also become “non-compliant” with the state and be subject to fines. The employer (or its agent) has decided to rely on the employee accepting his home state benefits. If the injured employee goes back to her home state for benefits, no harm, no foul.  However, if the employee perfects a claim in another state or in some instances simply chooses to file a claim in that state, then the employer would be considered a non-complying employer and could be subject to penalties.

Washington does not reciprocate in construction employment unless there is an agreement in place. Washington has these agreements with Oregon, Idaho, North Dakota, South Dakota, Montana, Wyoming and Nevada.

Some specifics

Massachusetts, Nevada, New Hampshire New Mexico, New York, Montana, and Wisconsin require coverage in 3.A.

Kentucky allows no exceptions for family members, temporary, part time or out-of-state employers performing any work in the state of Kentucky. Kentucky does not accept the Ohio C110 form.

New York made a significant change in its workers compensation law [Section 6 of the 2007 Reform Act (A.6163/S.3322)] that affected employers if they conducted any work in New York or employed any person whose duties involve activities that took place in New York. Effective Feb. 1, 2011, the New York board clarified coverage requirements. Detailed information can be found on the New York Workers Compensation Board’s website: http://www.wcb.ny.gov/content/main/onthejob/CoverageSituations/outOfStateEmployers.jsp

Florida, Nevada and Montana require all employers working in the construction industry to have specific coverage for their state in 3.A. Ohio and Washington require that employers purchase coverage from the state for all employers working in the construction industry. Otherwise, Florida, Nevada, Montana, Ohio and Washington will honor coverage for temporary work from other jurisdictions. Florida also requires the coverage be written with a licensed Florida carrier. 3.A. coverage status is required for any employer having three or more employees in New Mexico and Wisconsin even on a temporary basis.

The standard workers compensation policy exclusion for bodily injury occurring outside the U.S., its territories or possessions and Canada does not apply to bodily injury to a citizen or resident of the U.S. or Canada who is temporarily outside these countries. State workers compensation will apply, however, for those employers that have employees regularly traveling out of the country; the Foreign Workers Compensation and Employers Liability endorsement should be added to their workers compensation policy. This endorsement is used for U.S.-hired employees who are traveling or residing temporarily outside the U.S. The coverage is limited to 90 days. For employees out of the country for long periods or permanently, coverage needs to be arranged under an international policy.

The extraterritorial issues arise because many states — Alabama, Alaska, California, Connecticut, Delaware, Georgia, Illinois, Indiana, Iowa, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Tennessee and Wisconsin — permit concurrent jurisdiction between State and Longshore coverage. Some states — notably Florida, Louisiana, Maryland, Mississippi, New Jersey, Texas, Virginia and Washington —  do not permit this concurrent jurisdiction, and Longshore becomes the sole remedy. In concurrent jurisdictions, the employee can file in both state and federal court, and the employer must defend both.

Summary

  • Recognize that having employees who work, live or are temporarily traveling to or through other states creates premium and coverage challenges for employers and agents.
  • Take time to understand the rules of the state where there is potential exposure.
  • States requiring coverage in 3.A. for some or all situations tend to be strict and impose severe penalties for non-compliance. Many carriers are often aware of the challenges these states present and will work with the agent/employer and add on an “if any” exposure basis.
  • Always attempt to secure the broadest coverage possible under the workers compensation policy, adding to 3.A. as many states with even minimal exposure. As a fallback, get the state in 3.C.
  • Obtain coverage for operations in monopolistic states separately.
  • Address out-of-state exposures when insured by a state-specific state fund or regional carrier that only writes in one or a few states. Remember, the 3.C. wording is designed to pay benefits — by reimbursing the employer — if the carrier cannot pay directly to the employee.
  • Check for employees traveling out of the country and arrange to expand coverage with the foreign endorsement or through an international policy.
  • Check with a marine expert to assess the exposure to the Longshore Act and whether coverage is required.  Longshore is very employee-friendly.

The white paper on which this article was based can be found here.

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.