When the law sets a precedent for a certain situation in workers comp, it impacts future rates for employers. Recently this was seen in Oklahoma, where the Supreme Court ruled in favor of a woman who had injured her knee while on the job with Sprint PCS. It will likely cause in jump in rates for everyone.
Understanding her case is the key to understanding the hike in costs. After the worker filed a claim for her knee injury, she received sanctioned medical support from her employer based on current workers compensation laws. After some time passed though, it was clear her knee was never going to be what it was before.
She did come back to work once doctors let her know there wasn’t anything more they could do, but she had difficulty performing her job. At that point she filed an appeal for additional support, but was denied by the lower courts based on the provisions of the laws. She then took it to the Supreme Court where the ruling was reversed and she was granted additional compensation based on her injury.
While this case was judged based on its own merits, it’s easy to see why the scenario could easily repeat itself. Based on the extra money having to be paid out to her, the rates will need to go up to cover these additional expenses. The National Council of Compensation Insurance has already showed the Oklahoma Insurance Department that their loss costs (expenses paid out due to the injured) have increased by about 3.4 percent. This affects all employers, so it’s expected that rates will climb soon.
You may not live in Oklahoma, but it’s important to remember that your rates aren’t just based on what type of company you are or how you choose to run your organization. You can do everything possible to keep workers safe, but there are other factors at play that have nothing to do with you. This is the nature of insurance, and something we all have to contend with in both personal and professional sectors.
This case study is not a reason for you to throw up your hands though. The more you stay involved in what’s happening around you, the more likely it is you’ll see the pitfalls of other employers. For example, you can change safety practices based on how other employees were injured. You’ll also be more prepared with how you prepare your budget when you do see cases like this on the news. For the Sprint employee, her initial denial was ruled unconstitutional, so may also give you an indication of reform to come in the state of Oklahoma.
