SC Workers' Compensation January 5, 2016 Presented by: Bill Shaughnessy McAngus Goudelock & Courie
Opt Out South Carolina House Bill H4197 Introduced toward the end of the last 2015 Legislative Session. Bill paves the way to establish an alternative to the workers compensation system. Texas and Oklahoma allow opt out. Tennessee is considering opt out Legislation.
Opt Out South Carolina House Bill H4197 The momentum here is from Association of Responsible Workers Compensation Alternatives (ARWCA). The principal players are Wal-Mart, Nordstrom, and Lowe s. In the states which allow opt out, the principal industries involved are healthcare, service industries, retail and transportation.
During the 2015 Legislative session House Bill 4197 was introduced. Principal provisions: 1. Stress mental injuries and mental illnesses are not considered an occupational injury unless caused by physical injury arising out and in the scope of employment.... The physical injury limitation does not apply if the employee is the victim or witness to any act involving, or of the nature of, a violent crime or any other incident that would result in severe shock to a reasonable person. 2. The Director of the Department of Insurance will review petitions of any employer desiring to opt out (the Director of Insurance shall review the written benefit plan and proof of the employer s ability to financially secure compensation for its covered employees.
During the 2015 Legislative session House Bill 4197 was introduced. (Cont.) 3. The act specifically requires the plan document to meet or exceed the following minimal requirements: a) coverage free of charge to the employee for medical, surgical, hospital, dental, and other treatment, including medical and surgical supplies, nursing services, rehabilitation services, medicines, prosthetic devices and other reasonable and necessary apparatus, as may be considered medically reasonable and necessary by the attending physician. b) total disability benefit... of at least 75% of the employee s average weekly wages up to 110% of the average weekly wage in this state for the preceding physical year... c) the loss of both hands, arms, shoulders, feet, legs, hips or vision in both eyes or any two thereof constitutes total and permanent disability;
During the 2015 Legislative session House Bill 4197 was introduced. (Cont.) d) in no case shall the period covered by total disability benefits be greater than 500 weeks from the date of injury, except that a person determined to be totally and permanently disabled who as a result of a compensable injury is a paraplegic, quadriplegic or who has suffered physical brain damage is not subject to the 500 week limitation and shall receive the benefits for life. e) temporary partial disability benefits are mandated f) in cases involving loss, loss of use or disfigurement described in the schedule of 42-9-30 or other unscheduled permanent bodily impairment, permanent partial benefits shall be based on any applicable periods specified in such schedule and a physician s opinion of the nature and extent of injury using criteria established by the American Medical Association s Guide to the Evaluation of Permanent Impairment. Consideration may also be given to an injured worker s age, education, prior work history, work restrictions, need for future medical treatment, and similar factors. These benefits are determined upon the employee reaching maximum medical improvement....
During the 2015 Legislative session House Bill 4197 was introduced. (Cont.) g) if death results approximately from an accident and within two years of the accident or while total disability still continues within six years of the action, death benefits to the dependents of the employee of at least 75% of the employee s average weekly wage at the time of injury, up to 110% of the average weekly wage in this state for the preceding physical year for a period of at least 500 weeks and burial expenses up to and including $7500. h) the above minimum benefit requirements must be interpreted and applied by the claims administrator appointed by the qualified employer.
Opt Out South Carolina House Bill H4197 Except as specifically provided, no provision, process, rule or interpretation under the South Carolina Workers Compensation law is incorporated into this South Carolina employee injury benefit alternative.
Who decides benefits under the plan document? 1. claims administrator appointed by qualified employer The opt out plan is an ERISA plan. It is subject to all applicable reporting, disclosure, fiduciary responsibility, claims administration, enforcement and other applicable provisions of the Employee Retirement Income Security Act of 1974 (ERISA). 2. the obligation of employers who chose to opt out can be self-funded or insured or partially self-funded and partially insured.
Exclusive remedy The rights and remedies granted by this title to or with respect to an employee for compensation on account of personal injury or death excludes other rights and remedies of such employee, his personal representative, parents, dependents or next of kin as against his employer, at common law or otherwise, on account of such injury, loss or service or death.
Plan Document (Employee s Benefit Plan) The Legislation, as it currently exists, only require minimal limits. Legislation does not mandate notice requirements, statutes of limitations, types of injury which may or may not be compensable. It leaves open questions as to dispute resolution. The employee s benefits plan document would likely establish dispute resolution (perhaps mediation, arbitration, etc.)
Problems: 1) Plan documents will likely be dissimilar. Plan documents can essentially say what they want as long as the plan document complies with the minimum benefit levels; 2) exclusive remedy what about upstream employers; 3) uncertainty uncertainty as to liability; 4) whether benefits under these opt out plans are subject to income and payroll taxes (under workers compensation benefits paid are not subject); and 5) many benefit plans in other states restrict medical care to a certain number of years.
JUDY MARIE BARNES V. CHARTER 1 REALTY Barnes was employed as an administrative assistant for Charter 1 Realty. Barnes was asked to check the email of one of her realtors before noon. Around 11:30 AM, Barnes left her desk and walked toward the realtor s office. Before reaching the realtor s office, she stumbled and fell and sustained serious injuries (broken left femur, broken left humerus and torn rotator cuff. The Single Commissioner denied the claimant s claim finding there was no explanation for the fall, as it was not caused by some hazard at work or a deficiency in the carpet. Based on these findings, the Commissioner concluded that Barnes fall was idiopathic. The Commissioner also concluded that no competent evidence was presented that her employment contributed to the fall.
The Court held: BARNES Continued 1) the Court found fault in the Commission finding that, because there was no irregularity in the carpeting and because Barnes could not otherwise explain her fall, that the fall was idiopathic. The Supreme Court concluded that branding Barnes fall as idiopathic was erroneous. 2) purely idiopathic falls are not compensable. 3) an idiopathic fall is one that is brought on by a purely personal condition unrelated to the employment, such as a heart attack or seizure. 4) idiopathic injuries are generally not compensable absent evidence the work place contributed to the severity of an injury (such as a tree surgeon who suffers a seizure while in a tree or a carpenter who falls off a scaffold after sustaining a heart attack). 5) finding that the unexplained nature of Barnes fall rendered it idiopathic was erroneous.
BARNES Continued The Barnes Court reviewed the decision in Crosby v. Wal- Mart Store, 330 S.C. 489, 499 S.C.2d 253 (Ct.App. 1998). In that case Crosby told another employee that her leg gave out. Thus, in Crosby the Court did not find the cause of the fall was unknown, but found that the fall was in fact occasioned by an internal or personal condition specific to Crosby and was therefore idiopathic in nature. Merely because the cause of a fall is unexplained does not mean that the fall was idiopathic (that the cause was internal and a personal condition). (For example, when an employee is standing at a desk and suddenly fell rigidly backward without crying out or making any attempt to catch themselves.) Bagwell v. Ernest Burnwell, Inc., 227 S.C. 444, 88 S.E.2d 611 (1955).
BARNES Continued The Court held that We therefore find the Appellate Panel s conclusion that Barnes fall was idiopathic is an error of law and contrary to the very foundation of the idiopathic exception. There is no evidence that her leg gave out or that she suffered some other internal breakdown or failure. She did not faint or have a seizure. It is irrelevant that the carpeted hallway was not defective. Whether she tripped because she was hurrying or tripped over her own feet, neither is an internal breakdown or weakness that falls within the ambit of idiopathy. Accordingly, we found the Court of Appeals erred in affirming the finding that Barnes fall was idiopathic. Even if a fall is deemed to be idiopathic, it is still possible that the injuries suffered might be compensable if the employment places the claimant a position where the effects of the fall are enhanced or worsened (such as a tree surgeon who suffers a seizure while working on the top of a tree or a carpenter who suffers a seizure while on second story scaffolding.
BILL 429 AMENDMENT TO SECTION 42-1-160 OF THE CODE OF LAWS OF SOUTH CAROLINA, 1976
AMENDED TO CLARIFY DEFINITIONS OF INJURY AND PERSONAL INJURY REGARDING FIRST RESPONDERS MODIFY REQUIREMENTS OF FIRST RESPONDERS WHO SEEK WORKERS COMP FOR PERSONAL INJURY CAUSED BY STRESS, MENTAL INJURY OR MENTAL ILLNESS ADD MENTAL ILLNESS TO RELATED CONDITIONS THAT MAY BE COMPENSABLE IF RESULTING FROM SIGNIFICANT TRAUMATIC EXPERIENCE
(B) STRESS, MENTAL INJURIES, AND MENTAL ILLNESS ARISING OUT OF AND IN THE COURSE OF EMPLOYMENT UNACCOMPANIED BY PHYSICAL INJURY AND RESULTING IN MENTAL ILLNESS OR INJURY ARE NOT CONSIDERED A PERSONAL INJURY UNLESS THE EMPLOYEE ESTABLISHES, BY A PREPONDERANCE OF THE EVIDENCE:
(1) THAT THE EMPLOYEE S EMPLOYMENT CONDITIONS CAUSING THE STRESS, MENTAL INJURY, OR MENTAL ILLNESS WERE EXTRAORDINARY AND UNUSUAL IN COMPARISON TO THE NORMAL CONDITIONS OF THE PARTICULAR EMPLOYMENT; AND (2) THE MEDICAL CAUSATION BETWEEN THE STRESS, MENTAL INJURY, OR MENTAL ILLNESS, AND THE STRESSFUL EMPLOYMENT CONDITIONS BY MEDICAL EVIDENCE.
NEW ADDITIONAL PROVISION (C) The provisions of subsection (B)(1) do not apply, however, if the employee is employed as a first responder and the impairment causing the stress, mental injury, or mental illness arises from the first responder s direct involvement in, or subjection to, a significant traumatic experience or situation, without regard to whether the experience or situation was extraordinary or unusual in comparison to the normal working conditions of a first responder s employment.
(D) Stress, mental injuries, heart attacks, strokes, embolisms, or aneurisms arising out of and in the course of employment unaccompanied by physical injury are not considered compensable if they result from any event or series of events which are incidental to normal employer/employee relations including, but not limited to, personnel actions by the employer such as disciplinary actions, work evaluations, transfers, promotions, demotions, salary reviews, or terminations, except when these actions are taken in an extraordinary and unusual manner.
NEW PROVISION (L) AS USED IN THIS SECTION, FIRST RESPONDER MEANS A LAW ENFORCEMENT OFFICER, FIREFIGHTER, EMERGENCY MEDICAL TECHNICIAN OR PARAMEDIC EMPLOYED BY STATE OR LOCAL GOVERNMENT. A VOLUNTEER LAW ENFORCEMENT OFFICER, FIREFIGHTER, OR EMERGENCY MEDICAL TECHNICIAN OR PARAMEDIC ENGAGED BY THE STATE OR LOCAL GOVERNMENT IS ALSO CONSIDERED A FIRST RESPONDENT OF THE STATE OR LOCAL GOVERNMENT FOR PURPOSES OF THIS SECTION.
AMENDED (C) THE PROVISIONS OF SUBSECTION (B)(1) DO NOT APPLY, HOWEVER, IF THE EMPLOYEE IS EMPLOYED AS A FIRST RESPONDER AND THE IMPAIRMENT CAUSING THE STRESS, MENTAL INJURY, OR MENTAL ILLNESS IS MEDICALLY DIAGNOSED AS POST TRAUMATIC STRESS DISORDER THAT ARISES FROM THE FIRST RESPONDER S DIRECT INVOLVEMENT IN A SIGNIFICANT TRAUMATIC EXPERIENCE OR SITUATION, WITHOUT REGARD TO WHETHER THE EXPERIENCE OR SITUATION WAS EXTRAORDINARY OR UNUSUAL IN COMPARISON TO THE NORMAL WORKING CONDITIONS OF A FIRST RESPONDER S EMPLOYMENT.