Three proposals in the legislature could significantly raise employers’ costs for workers’ compensation—two by needlessly tinkering with the state’s workers’ comp system and one by expanding state government into the private-sector insurance marketplace.
None of the three proposals is at all necessary or fiscally sound for the state budget or economy, especially during recessionary times, as they will either increase state spending or make it that much harder for companies to do business here.
Here’s why: SB-61 significantly increases workers’ comp costs by preventing employers from pre-approving routine medical examinations and treatments in workers compensation cases.
Since “routine” is defined as “anything recommended by a physician or surgeon,” employers would be powerless to ensure that injured employees receive only necessary and appropriate medical care in workers’ comp cases, thereby increasing the possibility that routine treatments could be administered more frequently and without limitation.
In addition, SB-61 empowers Workers’ Compensation Commissioners-—rather than physicians and other medical professionals—to decide what the appropriate care is when there are disputes.
In short, SB-61 is just plain wrong—medical decisions should be made by healthcare professionals, and pre-approvals are a necessary part of the workers compensation healthcare system to ensure that treatment costs are kept in line. Instead, SB-61 simply opens the door to much higher workers’ comp costs for employers and the system overall.
SB-334 will force employers in certain workers’ compensation cases to pay for the same work-related injury three times. Specifically, in cases where a third party causes or contributes to an employee’s work-related injured, SB-334 would reduce the amount of an employer’s lien recovery in actions against that third party by requiring the employer to pay for:
- The employee’s workers’ compensation benefits (ie, medical benefits, lost wages, etc.)
- The employee’s legal fees in bringing an action against the third party for damages (i.e., pain and suffering, etc.)
- The employer’s own attorney fees to secure a lien in the action against the third party.
In total, employers will be forced to incur significant costs in protecting and exercising their right to recover their out-of-pocket expenses and that is particularly costly given that employers usually don’t recover the full amount of what they are owed in many cases.
HB-5308 is a government solution for a nonexistent problem. It creates a nonprofit carrier for workers’ compensation insurance “as a last resort” for businesses.
The problem is, there is no need for a “last resort” option in Connecticut, because we have a healthy and stable insurance market with about 100 companies competing for business and coverage in the voluntary market readily available.
Nudging a state fund into the market actually could make it extremely difficult to maintain a competitive market for workers’ compensation insurance in the state and ultimately lead to a government monopoly as has occurred in other states such as Rhode Island.
The real crisis facing Connecticut is the loss of more than 100,000 jobs and the dwindling confidence of employers in the state as a good place in which to do business. Proposals such as these only weaken that diminishing confidence and do nothing to help employers create the jobs we need.
For more information, contact CBIA’s Kia Murrell at 860.244.1931 or firstname.lastname@example.org.