Opinion: AIM seeks to clear up work comp myths

As options for reforming the workers’ comp system progress, we know a campaign of misinformation, aimed at painting employers as the enemy of the working man, is not far off. Before that misinformation starts, lets clear up the myths and look at the facts.

Myth No. 1 – Employers are simply trying to avoid responsibility. Prior to passage of Missouri’s workers’ compensation system, employers could be held liable for injuries caused by the workplace only if the employer was found to be negligent and only following a lengthy trial.

In the 1920s, employers agreed to eliminate an employee’s requirement to prove the employer was negligent. This made it easier for an employee to receive medical care and benefits. In exchange, employers requested limits be set on the maximum amount of compensation that could be awarded. The resulting system allowed employees to access medical care and other benefits immediately, avoiding lengthy and expensive trials. However, at no point was workers’ compensation ever designed to address injuries that were not caused by the work place.

Myth No. 2 – Employers are only trying to cut costs at the expense of injured employees. Clearly employers must be concerned about the rising costs of employee benefits. Among those concerns, workers’ compensation ranks as one of the biggest. However, employers also care about the well-being of their employees. When a worker is truly injured by the workplace, employers feel an obligation to provide for that employee.

Employers are resistant to paying for injuries that occur due to recreational activities or risky lifestyle choices. Recent court decisions have required employers to pay for injuries that occur as a result of non-workplace incidents, such as playing basketball, walking, or falling out of the employee’s vehicle. Decisions forcing employers to pay for injuries unrelated to the workplace are becoming more frequent and more costly, and these costs limit the ability of employers to provide better compensation to all employees and to create new jobs.

Myth No. 3 – If employers cared about employees, they would make the workplace safer. In reality, the workplace is safer today than ever before. Frequency of workplace injuries across the nation has been dropping steadily for decades. Missouri is no exception. Between 1992 and 2000, frequency of injuries in Missouri declined by 42.2 percent, ranking Missouri as ninth-best in the nation and better than every surrounding state except one. During that same time, the cost of workers’ compensation claims has steadily risen. Two major factors account for this.

First, Missouri ranks very high in national comparisons in the percentage of workers’ comp claims involving an attorney. Statistics show the cost of a workers’ comp claim doubles when an attorney is involved. And the attorney gets 25 percent of any benefits awarded before the employee gets his/her share.

Second, Missouri is also way out of line when compared to other states in the frequency of lump sum settlements. Like attorney involvement, lump sum settlements drive up the cost for employers, and Missouri awards these settlements at more than twice the national average.

Bear in mind, year after year Missouri workplaces are becoming safer than most other states, yet we continue to award benefits and monetary settlements far faster than nearly every other state.

As we explore options to reform workers’ compensation, Missouri employers are seeking to restore the program to its original intent. As we identify cases that are caused by recreational activities, lifestyle choices or violation of workplace rules, the costs of workers’ compensation can be brought under control. Reducing the level of attorney involvement also will reduce the cost, improve delivery of medical services and bring quicker resolution for employees.

If Missouri is to improve efforts to attract new or expanded business opportunities, we must address a workers’ compensation system that is nationally recognized for frequent lump sum awards and attorney litigation.

If a business can locate in a neighboring state and reduce its workers’ compensation costs by 35 percent to 40 percent, the decision is clear. Missouri should be leading the way in attracting business opportunities, not opportunistic trial lawyers. Reforming workers’ comp to ensure timely care and benefits for injured employees while controlling excessive costs is a first step.

Jim Kistler is executive vice president of Associated Industries of Missouri.