The new Trump administration has ushered in some changes that many Americans weren’t quite prepared for, and much of the impact is not yet fully known. After all, he’s only been in office for a little over four months, and many changes are yet to come. With respect to workers’ compensation (work comp) benefits, the potential effect has not been fully realized. However, it appears that the greatest potential impact will come from the repeal of the Affordable Care Act (ACA) and budget cuts.
In Colorado and many other states, the ACA, more popularly called Obamacare, has generated a favorable trend in work comp claims. Claim rates and costs have been dropping, and this movement is very likely due to increased worker access to healthcare. In its 2016 report, the Upjohn Institute for Employment Research identified a strong correlation between the decreased work comp claims and costs and the uptick in health insurance coverage.
Joe Paduda of Health Strategy Associates delves even deeper into the link between Obamacare and work comp claims. He alleges that workers who are hurt on the job have less reason to pursue care through their employer’s work comp insurance if they have their own health insurance.
Further, other health issues that may impact their work injury can be covered by the worker’s insurance, rather than work comp. For example, an employee with high blood pressure would need additional treatment for his hypertension before he could undergo a necessary work-related surgical procedure. However, when the worker has health insurance, his coverage would bear the additional cost, rather than work comp.
The proposed repeal and replacement efforts of Trump and the Republican-led House has thrown millions into uncertainty with respect to healthcare coverage. The most recent version of the new TrumpCare coverage, the AHCA, has the potential to take away health insurance from 14 million Americans by next year, according to the Congressional Budget Office (CBO) estimates. And the number of insured is expected to continue increasing over the next 9 years.
These dire projections could spell big trouble for work comp. Uninsured workers would likely once again turn to work comp for as much medical coverage as possible. These changes would also disproportionally affect older employees, workers in higher risk jobs and many who currently receive coverage through Medicaid. These issues will equate to increased claims and higher costs.
Budget Cuts and Safety Issues
Trump has also proposed budget cuts and safety reform rollbacks that will have adverse effects on the work comp system. While the Obama administration was moving towards establishing minimum workers’ compensation benefit standards on the state level, the Trump administration has expressed no interest in pursuing these reforms.
Repeal of an Obama-era OSHA safety regulation could have a detrimental impact on injured workers, as well. The “Volks” rule requires dangerous industry employers to keep health and safety incident records for five-and-a-half years. But Congress changed that to just six months, and Trump signed off. This minimum record-keeping requirement may prevent identification of frequent and repeated safety issues with many companies, and make it much more difficult for their employees to obtain work comp benefits when injured.
If a disabled worker is receiving both Social Security Disability Insurance (SSDI) and work comp benefits, the total may not exceed 80 percent of the average earnings that the worker was receiving before he became disabled. It they do, the SSDI benefits are reduced to offset the overage. In 15 states, this works in the reverse. Instead, it is the work comp benefits that are offset. On May 23, Trump released information on his most recent budget plan with proposed cuts. The Workers’ Compensation Reverse Offset faces elimination in 15 states, of which Colorado is one. With this change, work comp will need to make up the shortfall that the government has been covering via SSDI, hence, raising costs.
Overall, it appears that the Trump administration will be bad news for work comp in Colorado, and throughout the nation. And that’s only addressing what we know so far. If you have questions about these pending changes, or other workers’ compensation issues, please contact us for answers.