A judge in Florida delivered a wake-up call to insurers and employers last week in ruling that workers compensation in its present form violates the state constitution. Current benefits aren’t enough to balance workers giving up their legal rights to sue, the court ruled.
Is this the result of a wayward judge, or more mischief by the trial bar trying to throw out a no-fault system that limits lawsuits?
But business-friendly legislatures in many states have cut benefits for several years, to where some contend that injured workers are being shortchanged. Especially in Southern states, critics say it’s too easy to deny benefits and that the ability to appeal has been sharply curtailed.
At one time, benefits were so rich in some states that it encouraged workers to fake injuries and malinger once they started receiving benefit checks. Remember California in the 1990s with the spike in stress claims? Or Pennsylvania, where you could make more on comp than your regular job because benefits weren’t taxed?
The political pendulum has swung far and wide. Sooner or later it will begin turning back toward increased benefits, especially if more states deem their comp systems are out of balance.
Insurers and employers should prepare for that day because pressure will increase to hold the line on premium hikes. A good start is to beef up anti-fraud measures and go after schemes by claimants and medical providers, as well as premium scams by businesses. Better prevention programs like this one would help as well.
A hostile environment for fraudsters will best serve the interests of insurers, employers and workers who are legitimately injured.
About the author: Dennis Jay is executive director of the Coalition Against Insurance Fraud.