Public Policy News
by Minda McGougle, Director of Public Policy
A serious crisis is coming in the New Mexico workers’ compensation system, and it could affect all of us.
Our NAWBO Public Policy Committee was briefed on this issue at our August meeting. The expert who addressed us was not a guest speaker but our own member Merilee Dannemann.
The concern, as Merilee explained it, is based on a decision handed down in June from the state Supreme Court. In a case called Fowler vs. Vista Care, the court decided that temporary total disability benefits can extend beyond the limit of 500 weeks mandated in the statute.
What does that mean?
The work comp system is designed to provide benefits and cover medical care for workers injured at work, quickly and efficiently, at a reasonable cost to employers. The philosophy behind workers’ compensation is that whenever feasible, it’s best for injured workers to return to the workforce. It makes the system less expensive. It benefits the employer because the worker’s knowledge and experience are retained. It benefits the worker because, as we in NAWBO know, most people are better off when they are working and have a sense of purpose rather than staying home feeling disabled. It also benefits society as a whole, because productive people contribute to society.
In work comp, the benefits provided by law are intended to encourage the injured worker to return to work. The benefit structure is set up so the worker will always make more money by working than by staying disabled. The system also encourages employers, through their insurance premiums, to rehire injured workers. The premiums, very simply, will be lower.
Temporary total disability is the highest level of benefits under the law. It’s intended to provide supportive income to workers while they are recovering. Another provision of the law provides lifetime benefits to workers who are permanently disabled.
The 500-week limit is one of many features intended to incentivize workers. The court has now said that if a worker has used up the 500 weeks but still is not physically recovered, the worker can continue to receive the top level of benefits. There’s no incentive to try hard to get better.
Insurers have no data to predict how this will affect the cost of claims. The Number One responsibility of insurance companies, Merilee explains, is to have enough money to meet their obligations. Under this decision, we know costs will increase, but we have no way of knowing how much more. This causes instability throughout the system and will affect all of us. It even affects us as homeowners because it will increase the cost of home repair and maintenance.
Interested groups are working on getting legislation ready for 2015 session, to reverse this decision and address the effects of several other court decisions that have hurt our work comp system. Our NAWBO Public Policy Committee is now working on our position.
Plan to join us at our next Public Policy meeting breakfast Wednesday, September 24, 7:30 am at Mimi’s Café. We will be covering potential NAWBO legislative policy positions and the upcoming Legislative Speak Out event on November 19th!