ProPublica, NPR: Inside Corporate America’s Campaign to Ditch Workers’ Comp

By Michael Grabell, ProPublica and Howard Berkes, NPR | October 14, 2015

  • October 14, 2015 at 3:47 pm
    GenXUnderwriter says:
    Like or Dislike:
    Thumb up 1
    Thumb down 1

    Worker’s compensation started out as a decent idea, but it’s evolved into a system rampant with fraud and other abuse. I’m sure there is a statistic out there somewhere that would indicate probably only around half of the total work comp expense goes to the worker. Not sure that allowing employers to “opt out” is the best way but it will certainly cut down on fraud.

    • October 18, 2015 at 3:56 am
      UW says:
      Like or Dislike:
      Thumb up 1
      Thumb down 1

      Fraud is a minor issue when it comes to worker’s comp. The main issue with fraud is double-dipping, or drawing from a claim, and going back to work at the same time. In reality, there are stats out there, and more than half goes to the worker, no need for you to look that up though I guess, because you can just throw out “statistics” from your own mind. They shouldn’t get most of the cost. The insurance companies are taking on the risk for a premium. Companies are able to self-insure, but most don’t, because the risk is simply too high, and they could be ruined by it.

  • October 15, 2015 at 9:29 am
    retired risk manager says:
    Like or Dislike:
    Thumb up 1
    Thumb down 2

    An excellent example of biased reporting. Start with the conclusion and write an article that proves that point, regardless of the real facts.

    FYI: Bill Minick did not “pioneer” the concept. Long before Bill even graduated from high school, there were numerous, large Texas employers who had rejected workers comp. The explosion in non subscribers came as a result of the total collapse of the workers comp system in the late 1980’s.

    Bill was not even in law school.

    If you had done your research, you would have discovered such “pioneers” as Al Hardin and Mike Dodge. Their contribution was developing an insurance policy (from Lloyd’s of London syndicate Sterling-Cooke)that allowed employers to transfer the liability risk. That was in the mid 1990’s.

    The ability to nonsubscribe serves as a check on the ability of the workers comp insurance companies to pass along rate increases that are due to their poor claims handling. I have had the pleasure, as an expert witness, in educating numerous companies as to what real claims handling means.

    Texas workers comp rates have fallen due to this competition. Oklahoma rates have already fallen 30%, and will go even lower. That is the incentive for an employer to stay in the system.

    The typical cost difference between the workers comp and nonsubscription is 40-60%, depending on the type of business. High rate classes can reach an 80% savings. That is why businesses opt out.

  • October 15, 2015 at 12:00 pm
    Observor says:
    Like or Dislike:
    Thumb up 1
    Thumb down 1

    It seems like the largest impediment to workers is the reporting period. If Texas makes a law to allow a longer period of time to report an injury, those deserving workers (truly injured) would gain just compensation.

    • October 15, 2015 at 12:24 pm
      Charles Smith says:
      Like or Dislike:
      Thumb up 1
      Thumb down 1

      I see your point for actual injuries- but what about for an employee intent on defrauding their employer, the carrier, and the system? Doesn’t this invite more opportunity?

    • October 15, 2015 at 12:52 pm
      retired risk manager says:
      Like or Dislike:
      Thumb up 1
      Thumb down 1

      You need to carefully read the article. Texas has no say in the terms/conditions of the benefit plan. The plan is governed by ERISA.

      Every example of denial for late reporting was the fault of the employee. All they had to do was report it. “I think I might have hurt myself.”

    • October 22, 2015 at 4:10 pm
      Agent says:
      Like or Dislike:
      Thumb up 1
      Thumb down 0

      Not an impediment at all. An injured employee should know he is injured within seven days, shouldn’t he? Most know it right away and report it to a supervisor or owner of the business. They then send him to a first aid provider for treatment and a claim is reported to the carrier to handle.

      The last thing we should want is some “injured” worker telling an employer that he fell in the warehouse 3 months ago and he is just now hurt with no witnesses. More likely, if he were injured, he did it on his own time out water skiing or hunting or playing a sport. That is fraud!

  • October 15, 2015 at 12:21 pm
    Charles Smith says:
    Like or Dislike:
    Thumb up 1
    Thumb down 1

    Having been an agent in Texas, I can say that Occupational Accident policies were offered in lieu of nothing at all. That being said, even then employers chose to take a chance that employees wouldn’t get hurt.

    The problem is the system- when you have a situation where someone makes money every time an event occurs- be it the employee (who usually comes out on the short end), or a provider, or a claims department- then who is looking out for the employer?

    The story cites a man in Texas who had the bad luck to the get WRONG type of hernia, so there is no coverage? What the heck is that about?

    Fortunately, there are ways to handle this AND work within the Workers Compensation system. While the WC system has its flaws, it is still good public policy. What employers need are advocates to make sure that their interests are being looked after.

    At Workers Compensation Company of America- we make Workers Comp work for the Employer! We work only for the employer, not the carrier, not a TPA. By instituting our proprietary claims management system, The WCCA Method, we are able to help clients reduce claims by an average of 21% and reduce cost of claims by an average of 51%.

    In fact, we are so confident that we are the only company in North America to put our money where our mouth is- guaranteeing our results 100%. Our clients get outstanding returns on their investment- in excess of 600%!

    • October 20, 2015 at 4:20 pm
      Agent says:
      Like or Dislike:
      Thumb up 1
      Thumb down 0

      I have been an agent for a long time in Texas. By the late 1980’s, WC was so bad that the poor employer was automatically put in the Pool with surcharges applied by servicing carriers. Claims were very bad with suits by lawyers on every small claim that should have been routine. Finally, the legislature reformed the WC system and returned it to what it was intended to do, pay medical and indemnity on an injury. Yes, Texas allowed Occ Acc policies for those who didn’t want WC and it worked ok for smaller Mom & Pop businesses who weren’t concerned about being put out of business because of a claim. The WC reform has resulted in rates going down and claims being handled. Texas Mutual aka The Fund was created and they morphed into Texas Mutual, the leading writer of WC in the state. They even pay dividends to policyholders who control losses and they also prosecute people who try to defraud them and the system.

  • October 15, 2015 at 1:55 pm
    Ron Smith says:
    Like or Dislike:
    Thumb up 1
    Thumb down 3

    This is a smear campaign article against “opt-out” options and totally biased. I challenge any “insurance industry” folks to attempt to objectively comment on the PP/NPR site and you’ll be rejected like I was. Read all of the comments and you can see most if not all are anti-Republican as if this article is even politically relevant) or anti-Texas or Red State. Just a bunch of political trolls commenting and many of the sources in the article are plaintiff attorneys.
    While Opt-Out isn’t perfect or for all employers at least in Texas and OK we have another choice unlike the WC monopolies prevalent everywhere else. If you are an advocate for the WC system I’d urge you to seek fixes to that system rather than denigrate “options”.

    • October 18, 2015 at 4:01 am
      UW says:
      Like or Dislike:
      Thumb up 2
      Thumb down 1

      This isn’t an option, it’s an elimination. I know that doesn’t fit into your long-winded, irrelevant, moronic political diatribe, but it is reality. Companies most places can self-insure for this, but they don’t, because the risk and liquidity requirements are too high, because claims are hugely expensive. On top of that WC claims are very frequent, and usually expensive. This is nothing but another way to shift the risk from the people taking the profits, i.e. the business owners, onto the people doing the work and having their labor profited on, i.e. the workers.

      If we get rid of this when people get injured they will be left with nothing. All the usual suspects crying for “tort reform” will be crying about this, making it impossible for an injured employee to sue, and if they do win, the company will just go bankrupt and start again with a new name.

      • October 22, 2015 at 9:51 am
        Agent says:
        Like or Dislike:
        Thumb up 1
        Thumb down 2

        UW, Congratulations. You win the Progressive Socialist class warfare award of the week. The reason why Workers Compensation failed in the late 80’s were Trial Attorneys suing over ever cut finger and driving up cost of claims and making coverage untenable for employers. If we didn’t have a WC law, almost every claim would result in a suit. By the way, the lawyers really took a hit when the law was fixed and they had to move on and do other lawsuits like Auto Accidents and Products claims.

  • October 15, 2015 at 3:37 pm
    John Edwards says:
    Like or Dislike:
    Thumb up 1
    Thumb down 1

    The Insurance Journal is a gullible publication, as it demonstrates by running this article without noting it was prepared by an organization with a notorious left-wing agenda. According to slate.com. (a liberal website), ProPublica is mainly funded by liberals Herbert and Marion Sandler. Here is Slate’s account: “What do the Sandlers want for their millions? Perhaps to return us to the days of the partisan press. The couple made their fortune, at Golden West Financial Corp. In recent years, they’ve spent millions on politics. The Federal Election Commission database shows the two of them giving hundreds of thousands of dollars to Democratic Party campaigns.” ProPublica is also funded indirectly by another infamous left-wing billionaire George Soros. NPR, equally well known for its liberal leanings, is a willing partner. Perhaps most telling is ProPublica’s previous investigations (found here: http://www.propublica.org/investigations/) that read like a liberal’s wish list. To run this article in an without noting the clearly political agenda of the writers brings into question the Insurance Journal’s reliability as a news source.

    • October 18, 2015 at 4:04 am
      UW says:
      Like or Dislike:
      Thumb up 1
      Thumb down 1

      Idiot, ProPublica reported what the guy stated, they didn’t create a story. Instead of bitching about the source, which seems to be the MO for any non-Fox, non-Limbaugh, or any non-retarded source, why don’t you make a single coherent comment on what your problem on your problem with the topic?

      • October 21, 2015 at 12:22 pm
        KD says:
        Like or Dislike:
        Thumb up 1
        Thumb down 1

        You are correct. They reported what “the guy” stated. A fallible argument since that doesn’t absolve them from the possibility of doing so with a bias..

        Then you bash audiences to Fox and Limbaugh, notoriously biased reporting agencies, to defend biased reporting? You’re an interesting fellow. I suppose the “non-retarded” sources you speak of are the ones you approve of with, based on your writing, liberal agendas?

        Now why don’t you make a single coherent comment on “what your problem on your problem” is, idiot?

    • October 20, 2015 at 10:15 am
      Agent says:
      Like or Dislike:
      Thumb up 1
      Thumb down 1

      I agree – the bias of ProPublica and NPR should have been disclosed in the article. Great point.

      • October 21, 2015 at 7:26 pm
        UW says:
        Like or Dislike:
        Thumb up 1
        Thumb down 1

        So illiterate along with stupid. I guess the first explains the second.

  • October 15, 2015 at 4:56 pm
    SacFlood says:
    Like or Dislike:
    Thumb up 1
    Thumb down 1

    Minick and his wife are trying to corrupt and privatize Workers’ Compensation in the South, just like Sacramento Mayor Kevin Johnson and his wife Michelle Rhee are trying to corrupt and privatize Education in the West and throughout the nation. All four of these people are morally corrupt, morally bankrupt, are destroying good systems, and are profiting from others’ suffering. I pray that the Legislatures and Departments of Insurance in the affected states will reverse opt-out and, instead, try to improve and reform their existing Workers’ Comp systems, as also needs to happen here in California.

  • October 16, 2015 at 3:01 pm
    ProductGuy says:
    Like or Dislike:
    Thumb up 1
    Thumb down 0

    Seems like there are too many opportunities for denial of service to the wounded employee. The article doesn’t address this, but I wonder what kind of allowances are made for employees who are rendered unconscious due to injury. If they’re out for longer than the reporting period are they then ineligible for coverage? How do their next of kin know to report? Are the shift managers responsible for reporting in these cases and what are the repercussions if that manager fails to file…

    Um… wife/physician of the opt-out plan’s CEO is one of the gateways to approved coverage? Slight conflict of interest.

    I’m also troubled by the lack of oversight that the Oklahoma DOI has exercised in the review of policy language, not to mention the apparent lack of authority to enforce any corrections to policy language. As one who works in both product development and compliance, I expect the DOI to enforce standards of coverage and crafting of policy language. Yes, this is related to the standard of care to employees. But from the business side, this also becomes an issue of a level playing field with our insurance competitors. If we were able to write whatever we wanted to for coverage and call it a policy, then I could guarantee profitability by issuing policies not worth the paper they’re printed on. Minimum standards of care are fine as legislated, but only as good as the enforcement that accompanies it.

  • October 19, 2015 at 11:57 am
    WCB says:
    Like or Dislike:
    Thumb up 1
    Thumb down 1

    I tend to lean more conservative than liberal, but sometimes liberals are right and they are correct on this issue–opting out should not be permitted in the workers’ compensation aspect of insurance.

    • October 21, 2015 at 12:25 pm
      KD says:
      Like or Dislike:
      Thumb up 1
      Thumb down 0

      WCB – This is the correct way to look at both yourself and the topic at hand. Congrats on being a moderate, wish we could say the same for our President, our Congress, and ‘UW’. Fatally left, fatally right, and unfortunately just plain stupid.

  • November 3, 2015 at 1:30 pm
    InsuranceWorker says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    I do work in WC insurance, I’m an attorney (never litigated WC, though, so no bias toward company or employee from that) and I’m a moderate (sorry to disappoint anyone who wanted to read a political diatribe that calls an entire group of people idiots).I definitely see the reasoning behind the opt out. But without consistent oversight, they have now overcorrected toward more opportunities for shady dealings and fraud from the companies. I’m not sure if there’s any way to put employers and employees on equal footing, but this isn’t it.

    • November 4, 2015 at 9:46 am
      Agent says:
      Like or Dislike:
      Thumb up 1
      Thumb down 0

      If the Workers Compensation Law is written properly, it is straight forward on what is compensable. There is no room for lawyers to file suits on every injury. If the employee is injured on the job, report it to the supervisor or owner who files the claim and the adjustor’s do their job. Medical is paid and if lost time, indemnity is paid. It is just that simple.



Add a Comment

Your email address will not be published. Required fields are marked *

*