Workers compensation may not be helping injured workers meet their needs
Until recently, America’s workers could rely on a compact struck at the dawn of the Industrial Age: in exchange for giving up their right to sue an employer if injured on the job, their employers would pay their medical bills and enough of their wages to help them get by while they recovered. However, this has changed in recent years. Studies show that states have been drastically cutting compensation to the point that some injured workers will actually plummet into poverty. Even worse, many workers often battle insurance companies for years to get the necessary surgeries, prescriptions, and basic medical care their doctors recommend. This while employers are paying the lowest rates for workers compensation insurance since the 1970s. In fact, in 2013, insurers had their most profitable year in over a decade, bringing in a hefty 18 percent return. Moreover, in Colorado, for the first time since 2010, employers will see no overall rise in their workers compensation premiums this year. What this means for injured workers is that many claims are being denied or pressure is being put on workers to lower costs.
While workers compensation provides a safety net for workers injured on the job, according to industry estimates, nearly 10 percent of all workers compensation claims are fraudulent, which costs insurers $5 billion each year. And although one in four Americans think it’s okay to defraud insurers, what this means to you is that the average U.S. household pays an additional $200 to $300 in health and related insurance premiums every year to offset the cost of fraud. Workers compensation fraud occurs when a claimant, employer, or health care provider knowingly lies in order to gain an advantage, savings, money, or other benefit. While many people believe that workers compensation fraud solely consists of employees lying about or exaggerating their injuries, this type of fraud also can involve employers.
However, a recent ProPublica and NPR investigation shows that few of the cuts were actually driven by concerns about fraud, which is estimated to account for only a small percentage of the $60 billion spent on workers compensation each year. And studies show that most of the money lost to fraud results not from workers actually making false claims but from employers misclassifying workers and underreporting payrolls to get cheaper insurance rates. In fact, the reduction in benefits has been driven largely by big businesses and insurers, which cite out-of-control costs. But the U.S. Occupational Safety and Health Administration (OSHA) found that while businesses are paying record-low rates for their employees’ workers compensation insurance, the actual costs are being shifted to employees, who shell out an estimated $30 billion a year in medical costs and lost wages not covered by workers compensation insurance.
“We think it’s very important for states to ensure that workers who are injured and made sick on the job get full compensation,” says David Michaels, U.S. Assistant Secretary of Labor for OSHA. “It does appear that there is right now a race to the bottom.”
If you or a loved one were injured on the job and need help receiving the benefits you deserve, contact an expert Colorado workers compensation lawyer who can explain your rights and get you the compensation and medical care you are entitled to under the law.
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