Oct 19, 2015

Opting Out Of The Workers Compensation Offset In Texas

     Let me explain first why I'm writing about a development in workers compensation law. Claimants receiving Social Security disability benefits as well as workers compensation benefits are subject to an offset. Usually, Social Security disability benefits are reduced because of the receipt of workers compensation benefits. Sometimes the offset works in the opposite direction. 
     The states of Texas and Oklahoma now allow employers to opt out of workers compensation. You read that right -- opt out of workers compensation. The employers have to set up benefits that parallel workers compensation but they can arrange things in ways that save money, such as refusing to pay for carpal tunnel syndrome or refusing to pay benefits unless a worker reports an injury by the end of his or her work shift or cutting off all benefits after two years. 
     In terms of workers rights, these plans are very worrisome but I'm writing about the Social Security implications. Social Security has decided that benefits under the company plans that substitute for workers compensation aren't subject to the workers compensation offset. This development is already costing Social Security's Disability Insurance Trust Fund money. Other states are studying what Texas and Oklahoma have done. There may be significant effects upon Social Security. Employers are trying to shift the burden of providing for workers injured on the job to Social Security and Medicare. This needs Congressional scrutiny.

8 comments:

Anonymous said...

Congress needs to revamp the whole workers compensation offsets. The problem is that some states already get the benefit of a reverse offset and others do not. It all depends on whether your reverse offset law was enacted prior to February 18, 1981. (POMS DI 52105.001 Reverse Offset Plans)

Congress should either allow reverse offsets in every state or eliminate them in every state. This would eliminate the unfair advantage that some states enjoy.

Side question: I have never been able to figure out why all 50 states did not adopt the reverse offset prior to 1981? The federal government is offering to relieve your state's employers of some of their workers compensation premium burden and the state says NO! What am I missing here?

Anonymous said...

In California, Governor Terminator and crew limited Temporary Total Disability (TTD) to 104 weeks whether the person was still recovering or not. As a result, more of my clients who would have had an offset on their TTD receive full SSDI.

Anonymous said...

States trying to shift costs away from private insurers and on to the Social Security Trust Funds indeed needs Congressional scrutiny. If workers are injured on the job let the employer's carrier pay for it, not the tax payer

Anonymous said...

To anonymous 7:04, Exactly what I have stated for many years, why should the tax payer pay for the employer's financial responsibility. What is even more irresponsible is that injured employees are paying for the injuries sustained at work out if their own SSA/Medicare FICA deductions out of their own working life paychecks, It's a financial double whammy on the injured employee and a complete giveaway for the employer who will litigate for years/decades to insure employees not receive but a smidgen for their total disability and just live on their offsetted SSA benefits, right into the poorhouse. Those who are in Congress want to shift everything over to the tax payer and then blame those who are disabled as the "takers", living on the federal dole. Besides that, what a way to bankrupt this country so they, those in congress and their friends in corporate America can ultimately flourish, no regs, no laws, no policies, no taxes. The U.S.A. will just be another banana republic..pre civil war. Those in Congress who don't like fairness, equality, justice, or our democracy need to live somewhere else and for Christ's sake, do it and leave now.

Anonymous said...

Those who are in Congress who do not represent all Americans deserve to be scrutinized for the irreparable financial harm that has cost the SSDI benefit program by allowing employers and the DOD/VA to not pay for it's wounded and sick for many past decades. Someone needs to scrutinize too, the lack of funds for vocational rehab that is rarely paid by Worker compensation insurers/SSA/DOD-VA.The funds went somewhere just not to those who were injured, ill or disabled.

Anonymous said...

This has been a concern of Congress since the inception of the Social Security disability program. As far back as the start of the disability program, some in Congress were concerned that Social Security cash disability benefits would result in a weakening of state workers' compensation laws, thus the offset of SSA DIB, and now it appears to be happening. No surprise that southern states are the first to do it.

Anonymous said...

TN and NC looking at the same deal. NPR did a few nice stories on this. Really is anyone surprised? States are broke. Demand on services is high, we have an aging working populace more prone to injury, and companies want to make money not pay premiums.

Check out Illinois, they have not had a state budget since July 1st. Programs are geting paid by legal wrangling and court decision. One of the sticking points is WC rule changes. Gov Rauner (R) wants to make changes to the WC system and Tort Reform to limit liablility and eliminate state workers unions.

I expect if party members support such actions as are seen in IL then we can epect a spread of more WC "reforms" to spread through the country and the desire to tap into that pool of money and make a profit from it by reducing payment and treatment fits the third party model supported by those thinking gov is too big and the private sector can handle it better.

Anonymous said...

I read that article on the "opt out" of workers comp coverage. In my opinion it sounds like the most evil idea dreamed up by a lawyer since John Yoo wrote his infamous legal memo enabling the use of torture. It seems like the people drafting these opt outs thought of every possible loophole to screw workers injured on the job out of the medical and financial help they need while they are recovering. All in the name of corporate greed, while shifting the burden of caring for these workers injured on the job onto the American taxpayer (by making them rely on Medicaid and Social Security). Wow. Want a litmus test to determine who's sold out to big business and thrown people with disabilities under the bus? Just check who voted for that scheme.