With practiced ease, he rattled off the common gripes about workers’ comp: Companies dig in their heels at the first sign of a claim and turn workers into adversaries. Insurers don’t communicate about benefits, causing workers to hire lawyers. Doctors are often picked based on discounts rather than quality. And the system, he said, has created a huge bureaucracy in the name of protecting workers’ rights.
As a result, injured workers no longer have any accountability, he said. They can report claims late, skip doctors’ appointments and appeal every perceived wrong to workers’ comp court rather than trying to work it out with their employers.
Under opt-out plans, Minick said, companies must be engaged in the process, educating new workers about their benefit plans and managing their medical care if they get hurt. This control allows employers to better monitor workers’ progress and ensure they return to work as soon as possible, he said.
“This is not the Industrial Age,” he said. “Workers’ compensation systems grew up at a time when employers did not care about their employees. If one got hurt, you cast him aside and brought in the next immigrant to fill that job. Now companies are competing to be a best place to work.”
An analysis by Minick’s firm shows that opt-out plans save companies between 40 and 90 percent because they have lower costs per claim, get injured employees back to work faster and handle fewer disputes. That means greater employee satisfaction, Minick said.
If the analysis is correct, Minick’s plans would herald an important answer to the nation’s eroding workers’ comp systems.
But the only data available to assess his claims comes from his firm. More than 30 companies contacted by ProPublica either wouldn’t discuss their programs in detail or didn’t return calls.
Steve Schaal, associate general counsel of Tyson Foods, said the company opted out in Texas to give it more control over which doctors workers can see and “to try to get our injured employees the best possible medical care.” Schaal said the company hasn’t taken a position on expanding opt out to other states. Tyson wouldn’t provide an updated copy of its plan.
Employers aren’t required to submit any information about their plans with the state, since Texas doesn’t regulate opt-out plans. For several legislative sessions, employers have fought bills that would have required them to share their data.
PartnerSource’s analysis comes with some significant, unstated caveats: Employers with opt-out plans tend to work in safer industries like retail, which typically has less severe, less expensive claims. The plans also don’t offer entire categories of benefits that state laws require and give employers more options to exclude complicated claims.
For example, workers’ comp gives employees 30 days to report an injury in Texas. Under opt-out plans, employees typically must report by the end of the shift or in 24 hours or lose all benefits.
Costco, which saw its costs drop 53 percent after opting out, acknowledged in a 2012 industry report that it denied some employees with legitimate work injuries because they reported late. Those workers, the report said, used their denial letters to get treatment under the company health plan.
Minick and other proponents say while plans can make exceptions, such rules ensure workers get medical care as soon as possible, speeding their recovery.
But public health experts say workers might not report minor injuries right away for valid reasons: They fear looking like troublemakers or worry about child care if they need to see a doctor or stay late filling out forms.
Or, like Rebecca Amador, they simply might not realize an injury’s severity.
Amador, a nursing assistant, was helping a patient transfer to a wheelchair at a Stephenville, Texas, nursing home in November 2013, when the chair’s brake unlocked, causing her to support the patient’s weight.
“I felt like a pinch in my back and I thought well, it’s been a long day, I’m tired,” said Amador, then 51. “So I paid no mind to it. I figured it would go away. Usually it goes away.”
She took a hot shower and went to bed. By the next morning, she remembers being in so much pain she could hardly breathe.
As soon as she got to work, Amador told her supervisor, who sent her to the hospital. Only 19 hours had passed. But her employer, Fundamental Long Term Care, rejected her claim, saying she had failed to report it by the end of her shift.
The company’s decision left Amador in a Catch-22. Even though her injury happened at work, the company’s Texas plan wouldn’t cover it. But because it was work-related, neither would her health insurance or short-term disability plan. Had she worked for Fundamental in one of the other states where it operates, her injury would have been covered under workers’ comp.
Amador sought help at a publicly funded health clinic, where her doctor recommended a specialist. But she couldn’t afford one. She tried light-duty work until her doctor warned she could do further damage.
Since then, Amador said, she’s been living off her son’s Social Security benefits and borrowing from a lawsuit settlement fund set up for him after his father died of mesothelioma. Her daughters help pay for medications, and she’s applying for Social Security disability.
Sitting in her trailer nearly two years after the incident, she said her back burns like she’s in a fire, and she can’t even carry a two-liter soda bottle.
“I would probably still be working there” if Fundamental had workers’ comp, Amador said. “Maybe I could have gotten better, maybe I could have gotten my therapy done, and I wouldn’t be in the situation I’m in.”
Reading the Fine Print
The fine print of opt-out plans contains dozens of opportunities for companies to deny benefits. Employers can terminate workers’ benefits for being late to doctors’ appointments, failing to check in with the company or even consulting their personal doctors.
One truck driver for a food and beer distributor complained in court documents that his direct supervisor accompanied him to medical appointments for his hernia — a requirement under the plan.
Some plans have restrictions that read like the terms of criminal probation. While they’re healing, injured workers at W. Silver, a steel products manufacturer in El Paso, are prohibited from leaving the area, even temporarily, or engaging in any “pleasure” that may delay recovery.
Sometimes the plans of PartnerSource and others abandon fundamental principles of workers’ comp.
For nearly 40 years, every state has covered occupational diseases and repetitive stress injuries, recognizing medical research that some conditions develop over time. But in Texas, a number of companies, including McDonald’s and the United Regional Health Care System, don’t cover cumulative trauma such as carpal tunnel. U.S. Foods, the country’s second largest food distributor, also doesn’t cover any sickness or disease “regardless of how contracted,” potentially allowing it to dodge work-related conditions such as heat stroke, chemical exposures or even cancer.
Since its beginning, workers’ comp has paid benefits regardless of whether the employer or worker was at fault. But several companies, including Home Depot, Pilot Travel Centers and McDonald’s, exclude injuries caused by safety violations or the failure to obtain assistance with a particular task.
Under workers’ comp, employees can’t be fired in retaliation for a claim. But employers that opted out argued that their workers weren’t entitled to that protection, and in 1998 the Texas Supreme Court agreed.
Gillespie, of the insurance association, said such provisions blatantly shift costs to taxpayers, in the form of Social Security disability, Medicare and Medicaid. Some plans state it explicitly: The plan for Russell Stover Candies said its benefits are secondary to all other sources of benefits. Home Depot requires its employees to “take whatever benefits are available,” including enrolling in Social Security disability.
And as Joe Becker, a truck driver in Abilene, Texas, discovered, workers no longer have the promise of lifetime medical care for on-the-job injuries.
After truck driver Joe Becker herniated discs in his back on the job, his employer, Dent Truck Lines, paid for surgery. But when he needed a second operation to remove screws causing him pain, Dent refused to pay, saying it was past the two-year time limit. Becker, who lives in Abilene, Texas, now lives on Social Security disability.
Becker said he herniated several discs in his lower back in June 2012 when he hopped off his flatbed trailer after adjusting a load. His employer, Dent Truck Lines, paid for surgery that put rods and screws in his back. The surgery helped, but the screws dig into his back, occasionally hitting a nerve.
The doctor recommended surgery to remove the screws in 2014, medical records show. But because Dent’s benefit plan provides only two years of medical care, Becker was out of luck.
His boss, Cliff Dent, said he’d go out of business if he had to carry workers’ comp and doesn’t think Becker is “deserving.”
“The whole deal is just kind of silly, like most of these deals are — people looking for free money,” he said.
On the edge of being homeless, Becker, 44, applied and qualified for Social Security disability. He struggles to pay bills. For several weeks this spring, he said, he subsisted on a half a can of ravioli or SpaghettiOs a day.
“Sometimes I have to make a choice,” he said, sitting uncomfortably on his worn sofa. “Do I buy my pain meds or whatever other medicine that I need or do I buy groceries?”
So, Sue Me — Or, Rather, Arbitrate
Under the bargain of workers’ comp, employees gave up their right to sue their employers in return for guaranteed care and wages. The tradeoff in Texas is that injured workers covered by opt-out plans can sue their employers for negligence, potentially winning millions of dollars.
This risk is why many companies cap medical benefits at two years, Minick said. When injuries are severe enough to require lengthy medical care, many companies settle with workers, giving them a lump sum to cover future medical expenses and permanent disabilities.
On a more basic level, the threat of lawsuits, Minick and other proponents assert, creates a healthy incentive for companies to keep their workplaces safe.
But over the years, large companies have found a series of ways to reduce the risk of lawsuits.
Under workers’ comp, employees denied benefits can typically get hearings before administrative law judges. They can appeal further to a workers’ comp commission and even up to the state supreme court.
Under opt-out plans, workers’ only avenue of appeal is a committee set up by their employers for what is largely a paperwork review. Lowe’s hardware and Albertsonssupermarkets have contracted out their appeals to a Pennsylvania company called ELAP Services, which describes its mission as helping employers “control employee health care costs.”
ELAP’s president said the goal is to provide an objective review of the claim outside of the company’s basic business model of reducing medical bills.
But Gillespie said, “It’s potentially still somebody who either has a vested interest or is employed by somebody who has a vested interest.”
If the claim is still denied, workers can file an ERISA lawsuit in federal court. But the judge is typically limited to deciding if the company followed its plan or acted arbitrarily and capriciously — not whether the company was right.
A number of rulings by Texas courts have added to employers’ leverage, creating a higher bar for workers to prove their employers were negligent for common slip-and-fall and lifting injuries.
Many companies have further limited the risk by requiring employees to sign arbitration agreements. Instead of going before a jury, workers’ disputes are handled confidentially, out of court, before an arbitrator, typically a former judge or defense lawyer.
A 2010 survey of large employers with opt-out plans by a Stanford law professor found that 85 percent used arbitration agreements. Arbitration appeared to save companies money. Only a quarter of those companies had paid a claim over $500,000. And only 10 percent had paid more than one claim over $500,000 — compared with 38 percent of companies that didn’t use arbitration.
More strikingly, 81 percent of employers reported having no or hardly any “trouble with litigation.”
For many years, several companies that opted out required new employees to sign pre-injury waivers saying they wouldn’t sue the company if they got hurt. Texas banned that practice in 2001.
But many large meat and poultry companies, such as Tyson Foods, Cargill and Pilgrim’s Pride, continued to use post-injury waivers. After reports of workers signing waivers at hospitals — sometimes while still bleeding — the legislature tried to ban that too.
The debate over waivers presented a turning point for Minick to demonstrate his political savvy.
The largest group for employers that opted out, the Texas Association of Responsible Nonsubscribers, decided to support the ban, considering such practices abusive.
That rankled several members of the state’s business chamber, who had opted out and wanted to preserve their ability to avoid lawsuits.
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