Staying in the Game


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State Economies Benefit When Injured and Ill Workers Get Back on the Job Quickly

By Josh Cunningham

When a hang glider crashed on a Colorado mountainside in 1990, Tom Young, a firefighter from a nearby town, arrived to assist in the rescue operation. As fellow first responders treated the critically injured pilot at the scene, Young secured the wrecked glider from being sucked up into the rotors of the hovering rescue helicopter. But a sudden gust of wind caught hold of the glider and dragged Young down the mountain. A large rock brought Young’s tumble to an end, breaking his neck in the process.

In a matter of seconds, Young’s life changed forever. The 29-year-old husband and father of two young children would spend the rest of his life paralyzed from the neck down. Young’s initial thoughts were far from his job as he struggled with what this new reality meant for his family. “I didn’t know how I was going to be a father,” he says.

As depression set in, Young’s wife, Linda, suggested he go back to work. “You’re 29 years old and you still have a lot to offer,” he recalls her saying. “That was the turning point,” Young says. He started looking into whether he could go back to his old job. After two and a half years of physical recovery, navigating workers’ compensation and Social Security Disability Insurance benefits and securing some creative workplace accommodations, Young returned to the fire department in his pre-injury administrative position—minus the daring mountainside rescues.

Losing a Worker Can Be Costly

In the blink of an eye, anyone can experience an injury or illness serious enough to affect their ability to continue working. At least 4.6 million American workers are injured on the job every year, according to the National Safety Council. Keeping them on the job, if possible, benefits not only the workers but also their employers and communities.

With unemployment at its lowest point in generations and a record number of unfilled jobs, losing a productive employee can be costly. In fact, health-related work absences cost businesses as much as $230 billion annually, including an estimated $60 billion in lost productivity, according to the Occupational Safety and Health Administration.

Given this unprecedented job market, employers and policymakers are seeking ways to help injured employees stay in the workforce.

When injured or ill workers are off the job for a year, their chances of returning to the workforce drops to 32%. At two years, the likelihood of working again falls to just 5%. Without employment, many of these people exhaust temporary cash benefits from workers’ compensation or short- and long-term disability insurance and turn to federal income-based support programs like Medicaid, the Supplemental Nutrition Assistance Program, Social Security Disability Insurance, and the Supplemental Security Income program. 

For nearly a century, employers, insurance providers and policymakers have defined workers’ injuries and illnesses in two ways: as either work related or not. When injuries and illnesses occur outside of work, patients must pay for treatment on their own. The federal Family and Medical Leave Act protects their jobs, albeit without pay, for up to 12 weeks. The Americans with Disabilities Act may further protect some from losing their jobs. But often employers are free to terminate workers unable to return to their jobs once FMLA protections expire.

Work-related injuries fall under an employer’s workers’ compensation insurance policy, which covers treatment costs and provides partial wage-replacement benefits for time off without pay. Depending on the health condition, the treatment and benefits may last several years.

Workers’ compensation is one of the nation’s oldest social insurance programs. Influenced by German sickness and accident laws from the 1880s, the states’ adoption of workers’ compensation spread quickly, beginning with New York in 1910 and ending with Mississippi in 1948. Except for federal employees, military personnel and a handful of specific professions, there are no federal laws or regulations governing workers’ comp; instead, each state has independently developed its own policies.

States Call the Shots

All states except Texas require employers to carry workers’ compensation insurance. State officials also determine who can offer insurance and whether larger companies may self-insure their employees. Covered benefits and benefit levels vary state to state. Four states and two U.S. territories have a single state-run workers’ compensation insurance provider. Other states allow employers to purchase coverage through private companies.

Workers’ compensation is designed to benefit both employee and employer by providing reliable insurance coverage and reducing legal costs. Previously, workers injured on the job had to prove employer negligence to recover lost wages, medical expenses and other damages. Today, protections guarantee these benefits, and more, regardless of fault. In exchange, employees surrender their right to sue their employer. 

An injured worker is covered under the jurisdiction of the state where an injury occurs, regardless of where the employer is located. This has become increasingly challenging for multistate businesses that must comply with the unique laws of each state.

A typical workers’ compensation claim involves a cast of characters, including the injured worker, the employer, physicians, insurance claim managers, state regulators and caseworkers, and lawyers for all the above. After an injury, the employer files a claim with the insurance provider who then covers the costs of all related medical treatment and reimburses the worker for a portion of lost wages.

In the rare cases when an injury or illness permanently ends a person’s ability to work, the insurance provider must pay a permanent disability benefit. In most cases, however, workers are classified as having a partial disability—meaning they can still work, but not at their previous level and wage. States vary on how they define partial and total disability.

Plenty of Flexibility

The limited federal role in workers’ compensation gives states plenty of flexibility in crafting their laws.

Washington state created regional Centers of Occupational Health and Education in the early 2000s to advise and train health care professionals in treating and rehabilitating injured workers. The centers’ mission is to ensure all stakeholders—injured worker, employer, health care professionals and others—are focused on a unified goal: getting injured workers back on the job as quickly as possible. The training incorporates three best practices of occupational health:

  • Managing workers’ compensation insurance claims efficiently.
  • Creating treatment plans that outline an injured worker’s abilities and work restrictions.
  • Developing plans to overcome barriers preventing an injured worker returning to work.

Through early intervention and coordinated care, the COHE program has produced impressive results, including lower medical costs and a 26% reduction in the number of injured workers moving onto SSDI benefits. Washington’s approach has proven particularly effective in treating lower back and neck pain and other musculoskeletal disorders—conditions that account for roughly two-thirds of all years lived with a disability nationally.

Another approach is offering employers incentives to retain injured workers or hire those forced to leave previous jobs because of an injury or illness. Under North Dakota’s Preferred Worker Program, employers who hire “preferred” workers—those certified as having permanent medical restrictions—are not required to pay the premiums on their salaries for up to three years. The program, which was created by lawmakers in 2001, offers other incentives, including paying for wage replacements and reimbursing for the costs of modifying workplaces. North Dakota is the state’s sole workers’ compensation insurer, giving the state more control over employer insurance premiums and other employer incentives.

What’s Ahead?

As of May this year, 7.3 million jobs remained unfilled. That’s over a million more than the number of unemployed people looking for work. It’s not just employers and policymakers seeking ways to keep injured workers on the job. The federal government is showing interest as well. In 2018, the U.S. Department of Labor launched the RETAIN Demonstration Projects, awarding funds to eight states—California, Connecticut, Kansas, Kentucky, Minnesota, Ohio, Vermont and Washington—to develop ways to keep people injured on or off the job engaged in the workforce. If successful, these states can pave a path toward comprehensive changes in how employers, insurers and workers adjust to unexpected injuries and illnesses.

Twenty-nine years later, Tom Young, the injured firefighter, continues his work with the fire department in Golden, Colo., where he’s achieved the rank of captain. Through the support of his employer, his workers’ compensation insurance provider and, most important, his family, Young works nearly full time managing 10 employees and overseeing the city’s public access TV station.

He’s grateful for the assistance he’s received but also that he can still contribute.

“Being on the system isn’t always the best,” he says of collecting public benefits. Being able to return to his old job made all the difference. “My whole mental outlook on life has taken a complete turn since I went back to work.”

Josh Cunningham is a program manager in NCSL’s Employment, Labor and Retirement Program.

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