State officials are nervously watching as a case challenging a limitation on compensation for injured workers wends its way through the courts. A woman is challenging the state's policy of ending worker's compensation benefits when an injured worker reaches age 65 and becomes eligible for Social Security and Medicare.
The case calls into question the central purpose of workers compensation insurance. The stakes are huge. Obviously, the outcome could affect the pocketbooks of thousands of Montanans who've been injured at work. But it also could increase the cost of insuring workplace injuries, affecting all Montanans to some degree, and it could create a sizable new liability for state taxpayers. The head of the state-run workers compensation fund pegs the potential cost at $100 million to restore wage and medical benefits for claimants who've reached 65, plus another $163 million in higher insurance rates to cover future claims. This is tantamount to a $263 million tax increase spread across the Montana economy.
That's never a comforting thought. Expensive precedents set by Supreme Court decisions in the 1980s helped effectively bankrupt the state's workers' compensation fund, forcing the Legislature to bail it out with costly taxes on all workers and employers. Also, following the law of unintended consequences, reaction to those court rulings also caused the Legislature to curtail benefits to injured workers. Predictability has never been the Montana Supreme Court's strong suit, least of all on cases involving workers' comp.
Still, it would take quite a legal stretch to overturn the state's policy of ending benefits when Social Security kicks in.
First, the Montana Constitution makes workers' compensation the “exclusive remedy” for redress of workplace injuries. And, second, the Legislature in creating the workers' compensation system made crystal clear the system's limited nature. It's worth quoting the Legislature's “Declaration of Public Policy” (Montana Code Annotated 39-71-105) at some length here to illustrate what we mean:
“An objective of the Montana workers' compensation system is to provide, without regard to fault, wage-loss and medical benefits to a worker suffering from a work-related injury or disease. Wage-loss benefits are not intended to make an injured worker whole but are intended to assist a worker at a reasonable cost to the employer. Within that limitation, the wage-loss benefit should bear a reasonable relationship to actual wages lost as a result of a work-related injury or disease.”
The “Declaration of Public Policy” also says, “An objective of the worker's compensation system is to return a worker to work as soon as possible after the worker has suffered a work-related injury.”
What you see in this statement is the necessary balancing of interests essential to the whole concept of workers' compensation insurance. Workers are entitled to compensation only for lost wages and medical costs. The benefits are limited not because the Legislature is mean, but because unlimited benefits create unlimited risk for employers. Unlimited liability threatens the very existence of businesses, putting everybody's job at risk. We need jobs; we need employers; workers and employers share the need for insurance covering workplace injuries. That's the reality reflected in the Legislature's “Declaration of Public Policy” for worker's compensation.
In explicitly stating that workers' compensation isn't intended to make injured workers “whole,” the Legislature is saying the benefits are for lost wages and certain fringe benefits, not for lost opportunity or quality of life, however tragic those losses sometimes are.
Insurance benefits intended to replace lost wages logically end at retirement. Age 65 is a reasonable retirement age at which Social Security benefits begin. Age 65 also is when people automatically qualify for Medicare, which renders unnecessary continued medical benefits under workers' compensation. Similarly, Social Security disability benefits also, logically, reduce or eliminate the need for wage compensation; after a period, people on Social Security disability also qualify for Medicare.
Montana isn't alone in its approach to “retiring” people from workers' compensation benefits as they qualify for Social Security. Minnesota, North Dakota and Tennessee and West Virginia do likewise. Many other states reduce benefits partially to offset Social Security benefits. Still other states approach the issue a different way - by limiting benefits to a set number of weeks. Indiana and South Carolina, for example, pay benefits for 500 weeks (about 9 1/2 years); Wyoming extends benefits for 80 months - about 6 1/2 years.
Yes, some states do provide lifetime benefits. Those that do explicitly declare that intention in their laws.
All Montanans have a stake in workers' compensation. It must be fair and useful for workers, fair and affordable to employers, for our economy to function, let alone flourish. Montana's constitution gives the Legislature the right and responsibility to define the system, which it has done pretty darned clearly. Nothing says people who believe the benefits ought to be more generous can't go to the Legislature seeking changes. It would be wrong, however, for the courts to discard the Legislature's clear statement of public policy limiting the scope of the insurance benefits by “finding” in the Montana Constitution some right to lifetime benefits.
|
 |
 |
Add your comment now! Write your comment in the form below.
(Email address is for verification only. If you'd like to email a story, look for the link above)