3-20-2017; As IL/Chicago March to Financial Armageddon, Can I Suggest One IL WC Reform?; Consider Ascent Risk Mgmt for Modified Duty Off-Site Placement; OSHA Budget Changes and more

Synopsis: As Illinois and Chicago Continue Their March to Financial Armageddon, Can I Suggest One Simple WC Reform?

Editor’s comment: The financial headlines for our Illinois/Chicago governments are imposing. In the last ten days, we were advised our

ü  State’s unpaid bills are now more than $13 billion dollars. That is $13,000,000,000 in the red!!! The unpaid amount is spiraling up at least $11 million every day. While a State can’t be “bankrupt,” to me, not paying your bills is the same thing.

ü  The State has over $130 billion in gov’t pension debt that continues to spiral up as part of the immutable math of 85% fake gov’t pensions with 3% compounded annual increases;

ü  Illinois’ State University system has a budget of $4 billion and ½ of their entire annual budget amount is spent solely on their unfunded and unfundable gov’t pensions.

ü  The City of Chicago is going to pay over $1 billion dollars in interest on the money they have borrowed to run their crazy and precarious government.

ü  The City is increasing any tax they can hike and trying to impose new taxes on anything that isn’t moving rapidly.

ü  As bad as the City of Chicago’s financial plight might be, the Chicago Public Schools may be even worse—they need $500 million by June 30 and they don’t have it. We are unsure whether anyone will underwrite another one of their crazy almost-junk-bond-offerings.

What caused this morass of debt and financial danger? I call it a “benefit-ocracy”—our leaders spend billions on government workers to get their help and support to be re-elected and re-elected again. We can’t get rid of IL House Speaker Madigan because all of the supporters in his District have something like three government jobs and four unfunded government fake pensions. When you are raking that much in from taxpayers, why wouldn’t you remain loyal to your benefactor?

So What Does This Have to Do With IL Workers’ Comp?

Well, our workers’ comp system has a crazy concept that needs to be dumped, oops, we mean reformed one of these days. It is called an “odd-lot” total and permanent disability award. There is no “even-lot” that I am aware of. I often call it a “lazy-lot” total and permanent disability because it encourages and rewards whining and sloth. The words “odd-lot” don’t appear in the IL WC Act--these court-created benefits might be one of the most pricy things in all of this state’s expensive workers’ comp system. I assure you getting such an award is tantamount to what you might receive for winning the lottery. Here is one example of how it works.

Take a IL state prison guard, oops, we mean corrections officers. Let’s make our example guard Sandy Smith, 25 years old. Let’s assume Sandy is unfortunately attacked by inmates and before extricating herself, she suffers a shoulder injury that turns into an operated shoulder with moderate restrictions. Let’s assume Sandy Smith undergoes one of the dumbest tests in IL WC an FCE or functional capacity evaluation. As part of the testing, Officer Smith is now limited to lifting no more than 20lbs. That limitation means she can no longer work as an active correctional officer.

One would think our nutty state government system would bring her back to work in an administrative capacity, right? Well, that almost never happens in this state. Well, wouldn’t plan B mean that would put her into any other sedentary state job for with former Officer Smith might be suited? Heck no, we don’t do that. We kick her out into the private workforce and tell her to locate work on her own. She does a miserable job finding work and never locates anything.

What happens then? Well, we call such folks “odd-lot” total and permanent disability. If former Officer Smith was making $70,000 a year when injured, her total and permanent disability rate would be a tidy $897.43 a week or $46,666.26 on a tax-free basis every year to start. But don’t stop there—she is also entitled to RAF or Rate Adjustment Fund benefits paid for out of a fund wholly supported by Illinois business. That fund will give her COLA increases every year for literally the rest of her life.

Remember, the main rule in Illinois is, in a benefit-ocracy, retired people eventually make double, triple, quadruple or more what they made while working. Former Officer Smith can expect to be making over $90,000 a year during the 23d year of “retirement” as an odd-lot total and permanent disability claimant. She will be 48 years of age at the time. In 23 more years, simple math indicates she will again double her income to about $180,000. She will be 71 years old. And 23 years later, when she is 94, her annual income from taxpayers will be over $300,000!! If you aren’t sure, the combined payout on such a claim, involving one surgery to one shoulder could be $5-10 million dollars or more in lifetime benefits.

Now try to imagine numerous IL State workers who are getting these benefits with regular annual increases. We could stop any and all of them if the State would simply bring them back to sedentary or light work when it became available. We could also stop this silliness to reform the IL WC Act and dump the whole concept.

So How Does This Affect the Private Sector?

In Personnel Staffing Group d/b/a Most Valuable Staffing v. IWCC, Claimant was a staffing worker whose back went out on him. He got one surgery to one level of his spine at one of our top hospitals in Chicago’s west suburbs. Claimant uneventfully recovered from surgery and was provided an office or desk job at the employer’s office.

Claimant testified in order to get to the employer's office for work, he had to take the bus. He asserted it took him 20 to 30 minutes to get to the bus stop because he claimed it was “very troublesome” for him to walk and he was required to stop frequently. The bus ride itself to the office took about 40 minutes. Petitioner claimed riding the bus also caused him discomfort because he had to get up frequently and the shaking of the bus when it hit potholes caused him further pain. Once the bus left him off at this stop, Claimant testified it then took him 20 to 30 minutes to get from the bus stop to the office.

Claimant worked at the employer's office for three months and then stopped because he claimed he wasn't able to do it anymore. At least one of the doctors in the treatment group that provided care to Claimant strongly contradicted his tales of woe and confirmed this medical chart showed a single surgery to a single level of his spine. This surgeon asserted there was literally no scientific basis this man can’t and isn’t working right now.

Back and forth and forth and back, our IL Appellate Court recently affirmed an “odd-lot” total and permanent disability for this whining claimant. His benefits were about $25,000 a year on a tax-free basis and in the next twenty-three years, those benefits will double and later quadruple. If you ask me, we have to take a long, hard look at claims like this and stop listening to subjective complaints and look solely at objective evidence of disability.

In my view, the IL WC Appellate Court ruling, that was “non-published” or somewhat hidden by the panel, reads like a brief for Claimant. The five justices join in the unanimous opinion confirming Claimant doesn’t have to walk to the bus and ride on it if that somehow makes him sore. Who cares if it costs an Illinois business millions of dollars?

It is also my view, if Claimant wasn’t receiving our largesse, he can and would be working right now. Instead the cost to his employers and the businesses that pay into the RAF may be well into the millions. “Odd-lot” total and permanent disability claims are like Illinois and Chicago’s goofy government pensions—they start relatively small and become very expensive to finance and pay.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

Synopsis: How to Avoid “Odd-Lot” Total and Permanent Disability Claims with Ascent Risk Management.

Editor’s comment: We learned of the team at Ascent Risk Management from a client who recommended their MDOS or Modified Duty Off-Site program.

Ascent Risk Management focuses on the big picture of reducing workplace risk through a holistic approach. Just managing claims is the bare minimum for employers who want to create a better world for their employees.

Ascent Return-To-Work Plus

The Ascent Return-to-Work Plus (Modified Duty Off-Site) program provides options to employers who are unable to accommodate temporary light duty restrictions for their employees. Ascent partners with nonprofit organizations who have agreed to accept injured employees during their recovery process. This promotes healing and allows the employer to give back to the community.

Official Disability Guidelines

Ascent utilizes the nationally recognized Official Disability Guidelines (ODG) to benchmark and identify unnecessary disability. We work as part of your team to deliver positive RTW outcomes.

Solid and Rapid Job Placements for Injured/Disabled Workers

Ascent does placements with Nationally Recognized Organizations. They are 99% successful with placements. Statistically, they can do timely placements--35% in 24 Hour; 40% in Two Business Days

47: Average Number of Days Employees Are Placed at a Nonprofit Organization.

Savings Opportunities—rapid job placements of this nature reduce indemnity costs/reserves; reduce medical costs because someone who is working isn’t going to a doctor to justify being off work. Their assistance also lowers OSHA recordable lost days.

Ascent also has the capability to provide electronic timesheets.

For more information, go to http://ascentriskmanagement.com/

Synopsis: Proposed Federal Budget May Allay Fears About OSHA’s Rules and Punitive Enforcement Under the Prior Administration.

Editor’s comment: We have been repeatedly asked about the many rules and expensive citations that came from OSHA under the former administration and whether our clients and readers have to adjust to the rules that remain in place. The news from Washington D.C. appears to indicate your company or local government isn’t going to be hit with lots of OSHA citations under the current administration, as there may not be anyone around to issue them after the budget cuts take place.

A proposed "budget blueprint" released by the current administration will eliminate funding for 19 federal agencies.

The budget cuts, which would offset a proposed $54 billion increase in defense spending, would hit nearly every federal department. The Department of Labor, which includes the Occupational Safety and Health Administration, would face a $2.5 billion, or 21%, budget cut. The budget for the Department of Health and Human Services would be slashed by $15 billion, or 18%.

The OSHA defense team at KCB&A is involved in workplace safety and we have been keeping a close eye on changes at OSHA, where the focus under the new administration is expected to shift from enforcement to compliance assistance, and the agency has already shown signs of doing implementing that model.

Within the Department of Labor, OSHA training grants are targeted for elimination, which would save about $11 million. Instead, the OSHA budget would focus the agency “on its central work of keeping workers safe on the job,” the document states. Although not specifically identified in the budget blueprint, the OSHA training grants are likely the Susan Harwood grants, which used to award $10 million to $11 million per year.

In other sections of the proposed federal budget, certain programs at HHS would receive a funding boost, although funding for the department overall would be cut. The proposed budget would add $500 million for opioid abuse prevention and treatment services within HHS. The Health Care Fraud and Abuse Control program within the Centers for Medicare and Medicaid services would receive an additional $70 million. The budget document says that the former program's return on investment has been $5 for every $1 spent.

The current administration also issued a regulatory freeze, calling for a retraction of any regulations that had been sent to, but not yet published, in the Federal Register. Other regulations will have effective dates postponed so that they can undergo additional review.

There is also an executive order for agency heads to develop reorganization plans within 180 days, which could lead to the elimination of what the order calls unnecessary agencies, components of agencies and agency programs.

We will continue to closely watch what happens at OSHA and report as news develops. We appreciate your thoughts and comments. Please post them on our award-winning blog.