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RMs explore the failures of workers' comp.

As the first year of the new decade comes to a close, risk managers still find themselves faced with uncertainties. It was with this in mind that the Cincinnati RIMS Chapter sponsored the recent North Central Regional Conference, "Entering the "90s-Are You Ready?"

It was evident that the attendees were ready for the 1990s, but had a lot of questions. For example, in the morning-long session "Workers' Compensation Issues for the 90s," risk managers wanted to know how to control rising claims costs. According to David North, vice president of johnson & Higgins, a good place to start is with your insurance carrier. "More of them are promoting unbundled services," he said. "No longer is it what they have to offer you; today, it's what role you want them to play."

Another neglected area in workers' compensation is human resources. "Communications is the best investment in the 90s," said Mr. North, who encouraged the use of employee handbooks. "Employees often bring suits against their employers because they don't understand their rights," he added.

Robert Boyles, a claims specialist with Bethesda Inc: in Cincinnati, agreed, urging risk managers to prevent employee-employer relationships from becoming adversarial. "In Ohio," he said, "a claim may take eight weeks, so don't refuse a payment, because that employee needs the money now."

He added that an employee who is on compensation should be sent company newsletters and other updates to show that he or she has not been forgotten. "Get the employee in a friendly, cooperative state of mind," he said. "Let him know that if he works with you, he will be compensated according to the law."

Views From Both Sides

Robert Corker, a defense attorney for Taft, Stettinius & Hollister in Cincinnati, discussed the legal developments that have expanded the type of workplace injuries that qualify for participation in the Ohio state insurance fund.

In Ohio, he said, an employee is eligible for wage loss compensation if he returns to work in a modified capacity and draws a lower salary or is "unable to find employment consistent with his physical capabilities." Although an employee is required to accept an alternative job, he said many employers do not have them available. The situation takes on added difficulties when unions are involved, he added.

As a result of the 1987 case State ex rel. Stephenson v. Industrial Commission, more claimants are being declared permanently totally disabled then ever before, said Mr. Corker. In the case, the Ohio Supreme Court held that in determining whether a claimant is permanently totally disabled, the commission must consider a claimant's age, education, work record and psychological or psychiatric characteristics that might affect his or her ability to find a job. "The focus of a permanent total disability determination has shifted from whether a claimant is capable of working on a sustained basis," he said, "to whether the claimant could go into the job market and be employed." What can employers do to in light of these decisions? According to Mr. Corker, employers must realize that if and when any portion of the state's workers' compensation program breaks down, they will bear the cost. He recommends coordinating workers' compensation with a comprehensive employment and labor program that includes pre-employment physical examinations and applications, absentee policies, drug and alcohol testing, modified jobs and sickness and accident programs.

According to William Snyder, plaintiff counsel for Kearns & Synder, total disability does not benefit anyone. "When a claimant realizes that he cannot return to work, he gets frightened," he said.

There are alternatives to an inability to return to the original job, said Mr. Synder, including returning the employee to a modified job or a completely different one. "I don't see many employers come to me with alternatives, although I would like to see it," he said. "Some employers don't want the employees back at all."

Mr. Snyder said formal rehabilitation programs were viable alternatives, but questioned the success of Ohio's Rehabilitation Commission. "It has become a second-class employment agency that is more concerned with closing cases and getting [employees] bad jobs," he said. "It's embarrassing for employers to send them there." Mr. Snyder suggested that private rehabilitation firms are more proficient because they are motivated by profit.

Finally, Mr. Snyder said settlements are viable, though often overlooked, solutions. "The pros outweigh the cons if the price is right," he said. "It also allows the claimant to get on with his life."

Occupational Disease

Employers will witness an increase in occupational diseases in the '90s, according to Edna Scheuer, a partner with the Cincinnati law firm Thompson, Hine & Flory.

In Ohio, such claims are compensable if they arise out of employment and occur in the course of employment. Psychiatric claims are also compensable, but they must have arisen from a physical injury.

According to Ms. Scheuer, one of the "scary" aspects of Ohio's workers' compensation legislation is the fact that to fight a claim, an employer must prove that the employee had the disease prior to work and that work alone could not have caused it.

However, Ms. Scheuer said there are ways to defend an occupational disease claim. She suggested that the employer examine the exposure and determine whether the agent to which the claimant was exposed could have caused the disease in question. Then determine whether the claimant was exposed to sufficient quantities of the agent to cause the disease.

She also recommended investigating whether the claimant's present condition is an aggravation of a preexisting disease, which, if it were, would not be compensable in Ohio. Finally, she said, "Never assume that the claimant's physician made a correct diagnosis. ... Use your own company doctor or a specialist to determine whether the claimant truly suffers from the alleged disease," she added.

Employees in Ohio cannot be compensated if an injury was caused by a natural deterioration of a body part, if it occurred during a company-sponsored recreational event and the worker signed an Industrial Commission waiver before the event or if the employee was under the influences of alcohol or a controlled substance when the injury occurred.

How can an employer prove that the injured employee was using drugs or alcohol? According to Ms. Scheuer, the employer can call the hospital before the injured employee arrives there and ask them to test for drugs. If the employee refuses, she suggested asking the nurse or the doctor to note whether there is alcohol on the patient's breath or whether he behaves in a clumsy" manner. One way to nip the problem in the bud, she noted, is to add testing requirements to the employee handbook.

Fortunately, the federal government is pushing to cure the nation's drug problem, said Mark Stepaniak, an attorney in the labor and employment department at Taft, Stettinius & Hollister, during a later seminar, "Alcohol, Drugs and AIDS in the Workplace." Unfortunately, he added, the government has put the onus on employers.

To that end, it has passed the Americans With Disabilities Act, which affects employers with more than 25 employees starting in July 1992 and employers with 15 or more employees beginning in 1994. The act bars discrimination against those with disabilities, limits testing and requires reasonable accommodation, he said.

Employees who are addicted to illegal drugs do not qualify as disabled. The act also allows testing for drugs of both applicants and employees, but limits it on pre-employment medical exams. Therefore, Mr. Stepaniak recommended that applicants be tested after a conditional offer of employment has been made.

The act does not protect the present alcoholic, but it does protect the former alcoholic who has successfully engaged in a treatment program. Employees who have AIDS or test HIV-positive are not considered a threat to others in the workplace and are therefore covered under the act.

What can employers do if they suspect that an employee is chemically dependent? Take immediate action, said john Kies, manager of health management services for Bethesda Inc. And by all means, he warned, do not allow supervisors to eliminate the problem by transferring an employee to another area or by lessening his work load.

Finally, remember that drug and alcohol abusers rarely seek help on their own, he said. Often the only time they make a change is when the legal system or their families or employers intervene, he said. Unfortunately, symptoms do not manifest themselves at the workplace until the middle or late stages of chemical dependency, he added, so it is important to "establish ground rules" for recognizing telltale signs.

Amazing Grace

While risk managers learned how to address chemical dependency within their companies, luncheon speaker Peter Grace urged them to address another dangerous habit: the federal government's wasteful spending practices.

Likening government spending to a drug addiction, the chairman and chief executive officer of W.R. Grace & Co. and chairman of the Grace Commission called on attendees to put an end to the "tax-happy Congress." "The last time we had a balanced budget was in 1969," he said. "In the '90s we will witness the biggest deficit ever."

Mr. Grace suggested that attendees work to remove inefficient senators from Washington. He also invited everyone to join his Washington, DC-based Citizens Against Government Waste.

The country is in danger of turning into a "banana republic," he said. "Congress doesn't know how to stop spending, so it's up to you to do something. Think about your children and grandchildren, and ask yourself if they will forgive you when it's too late."
COPYRIGHT 1990 Risk Management Society Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Risk and Insurance Management Society Conference; risk managers
Author:McCabe, Monica
Publication:Risk Management
Date:Nov 1, 1990
Previous Article:A taxing problem for insurers and policyholders.
Next Article:Directors and officers: only qualified need apply.

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