President Obama signs the SMART Act Into Law

The SMART Act will modify the process through which the Medicare program is reimbursed when another payer (for example, a liability insurer) is responsible for a beneficiary’s medical costs.

As reported by Medivest Benefits Advisors, President Obama signed the Strengthening Medicare and Repaying Taxpayers (Smart) Act into law as part of H.R. 1845, on January 10, 2013. This bill represents one of the most significant changes in the Medicare Secondary Payer (MSP) conditional payment recovery process since the MSP Statue was enacted in 1981.

The SMART bill is the result of over four years of effort from the Medicare Advocacy Recovery (MARC) Coalition, which represents virtually every group of stakeholders impacted by the Medicare Secondary Payer (MSP) statute. The Congressional Budget Office estimated that the SMART Act would save Medicare $45 million from 2013-2022 by making it easier for payers to reimburse Medicare.

The Smart Act amends the Medicare Secondary Payer Statue by adding a new clause at the end of the existing statute that provides for the following:

  • Section 201 – Expedited Repayment, Web Portal and Right of Appeal. This section requires CMS to maintain and make available a timely updated website so settling parties can determine how much is owed to CMS for conditional payments, during the settlement process. It also requires CMS to provide a timely appeals process and to promulgate related regulations, if the settling parties believe there is a discrepancy in the conditional payment statement.
  • Section 202 – Threshold. Establishes that an actuarial single threshold amount be set for exemption from conditional payment reimbursement, where the expected recovery amount is less than the cost to recover.
  • Section 203 – Section 111 Penalties. Makes the $1,000 per day Mandatory Insurer Reporting (MIR) non-reporting penalty prevision discretionary by changing the statutory language from “shall be subject” to “may be subject to”. Also, this section requires CMS to publish formal regulations specifying situations where the penalty will not be imposed due to good faith efforts to comply.
  • Section 204 – Social Security Number. Directs CMS to modify the MIR reporting requirements so that reporting of social security numbers are not required.
  • Section 205 – Statute of Limitations. Creates a three-year statute of limitations for conditional payment recovery actions brought by the government.

The changes made to the  provisions for penalties should come as a relief to carriers, patients, and their lawyers and doctors who were previously under threat of stiff penalties in any case of mis-reporting or under-reporting to CMS.  Changing the language to “may be subject to (penalties)” allows for penalties to be ordered in cases of fraud or misrepresentation but does not require penalties in cases where mistakes are made.

$97 Million In Fraud: 2012’s Top 10 Workers’ Compensation Fraud Cases

CFO Jeff Atwater and Broward Sheriff Al Lamberti announced multiple arrests in Operation Dirty Money.

Today’s post comes from guest author Leonard Jernigan from The Jernigan Law Firm.

Over the past few years, many states have aggressively gone after workers’ compensation fraud (whether it’s the employee or the employer) and the amount of employer fraud being discovered continues to be staggering, notwithstanding these efforts. Legitimate business owners that pay for workers’ compensation, as required by law, are at a competitive disadvantage with those who cheat the system, and when people suffer a workplace disability and have no insurance local businesses that provide goods and services feel the pain along with health care providers who cannot get properly paid for their services. The cost of medical care and disability ends up being shifted to the taxpayer through Social Security, Medicare and Medicaid, and in states where compliance is not vigorously enforced a culture of cheating continues. The top ten cases for 2012 are listed below.

2012 TOP TEN WORKERS’ COMPENSATION FRAUD CASES Total Fraud: $97,466,500.00

1. ‘Operation Dirty Money,’ Stings Workers’ Comp Fraud Check Cashing Scheme

Florida: July 27, 2012

Multiple arrests were announced in Florida’s joint task force’s ‘Operation Dirty Money,’ which led to the arrest of alleged ringleader Hugo Rodriguez, owner of the Oto Group, Inc., and seven other individuals. Mr. Rodriguez was the facilitator of 10 known shell companies that funneled in excess of $70 million in undeclared and undetected payroll through different money service businesses. By using shell companies, Rodriguez was able to run a large construction operation and avoid paying the cost of workers’ compensation coverage, leaving employees at risk and scamming legitimate businesses.

 

2. Firms Face Charges for Skipping Workers’ Comp Payments

Ohio: May 13, 2012 Thousands of Ohio companies violated state law by not paying their most recent workers’ compensation premium, which can drive up insurance costs for businesses that follow the rules, a Dayton Daily News analysis found. The bureau identified about 41,247 private employers in the state that failed to report their payroll data and submit premium payments by the deadline. As of May, more than 12,200 accounts remain outstanding, and those companies owe an estimated $5.6 million in premiums.

3. Case Proves Employee Leasing too Good to be True

Texas: July 10, 2012

$4,466,500.00 was awarded in a Texas court against a staffing agency and its workers’ compensation insurance company. Jackson Brothers Hot Oil Service hired Business Staffing, Inc., (BSI) in 1999 and required BSI to have workers’ compensation insurance for its leased employees. BSI had 150 client companies with 2,000 employees. BSI bought a policy from Transglobal Indemnity for a total premium of $4,100.00 to cover all its employees. After failing to pay the medical bills of a 27-year-old oil field worker who was in an explosion and had 18 surgeries, the employee and Jackson Brothers sued BSI and Transglobal for fraud. Neither Transglobal (who had its corporate headquarters in the Turks and Caicos Islands) nor BSI had a license to conduct insurance business in Texas.

4. Business Owner Faces Insurance-fraud Charges

California: May 2, 2012


George Osumi was indicted on numerous felony counts.

Construction business owner George Osumi of Irvine, California was indicted on numerous felony counts of misrepresenting facts to the State Compensation Insurance Fund, among other charges. From December 2001 to March of 2006, Mr. Osumi committed workers’ compensation premium fraud by reporting his payroll to SCIF at just over $1 million, under-reporting over $3.5 million in payroll. This fraud resulted in a loss of over $814,000.00 in premium owed to the insurance fund.

5. Watertown Roofing Company and its Owners Plead Guilty and are Sentenced for Labor Violations

Massachusetts: January 11, 2012


Newton Contracting Company misclassified half of its workforce as subcontractors.

The Massachusetts Insurance Fraud Bureau discovered that the company, Newton Contracting Company, Inc., owned by Shaun Bryan and Antoinette Capurso-Bryan, misclassified half of its workforce as subcontractors, as well as failing to disclose to auditors more than $3.4 million of their company’s misclassified subcontractor payroll during its annual workers’ compensation audits.

6. 7-Year Sentence in $3.1 Million Fraud Case

California: November 30, 2012

Steven Morales, 65, of Wildomar, CA was convicted and sentenced to seven years in prison for his part in a $3.1 million workers’ compensation scheme. His son Brian was also convicted and sentenced to 4 years in prison. Morales and his son had set up a sophisticated system of shell companies to hide payroll and avoid paying workers’ compensation premiums.

7. Construction Company President Accused of Payroll Fraud

Florida: March 29, 2012

Randall Seltzer, president of Navarre Industries, Inc., was charged with multiple felony counts, including workers’ compensation fraud. An investigation by Florida’s Department of Financial Services’ Division of Insurance Fraud revealed that Seltzer systematically and intentionally under-reported his corporation’s true payroll to his insurance carrier. The department’s Division of Workers’ Compensation issued the company two stop-work orders within a five-year period. Seltzer allegedly established a shell corporation in 2011 to intentionally violate the stop-work orders and continue operating his construction business illegally. If convicted, Seltzer could face up to 30 years in prison and pay over $2.8 million in restitution.

8. CFO Jeff Atwater Announces Arrest of Owner of Fake Company for Creating Fraudulent Insurance Certificates and Avoiding Millions in Premiums

Florida: April 13, 2012


Yucet Batista allegedly used a shell company to commit large-scale fraud.

Yucet Batista was arrested for allegedly creating more than 250 fraudulent certificates of insurance to help uninsured contractors avoid $2.1 million in workers compensation premiums. Batista created the company and obtained the workers’ compensation insurance policy for the purpose of “renting” it, or making it available to dozens of uninsured subcontractors for a fee.

9. Audits Uncover Almost $1.2 million in Workers’ Compensation Violations at Boston Marriott Project

Massachusetts: September 4, 2012

In 12 audits conducted by the Joint Enforcement Task Force on the Underground Economy and Employee Misclassification and the Executive Office of Labor and Workforce Development, it was discovered that there were $584,249.00 in misclassified 1099 wages and $584,287 in unreported W-2 earnings, for a total of $1,171,536.00 in unreported wages by subcontractors on the Marriot renovation project. Six companies misclassified workers as contractors rather than employees, and seven companies failed to report wages. Among the worst of the offenders were one company that misclassified 28 workers and failed to report over $410,000.00 in wages; another failed to report $462,081 in W-2 wages.

10. Inn Owners Facing Workers’ Compensation and Insurance Fraud Charges

California: June 13, 2012


Owners of the historic Brookdale Inn and Spa are facing trial on charges of falsifying wage information to obtain lower insurance premiums.

The owners of historic Brookdale Inn and Spa, Sanjiv and Neelam Kakkar, are facing trial on charges that they falsified wage information to obtain lower insurance premiums. According to records, the couple paid approximately $800,000 less in insurance premiums than they should have over a period of several years.

Loss of Health Insurance Access: The Personal Toll on the Unexpected Uninsured.

Today’s post comes from guest author Tom Domer from The Domer Law Firm.

Access to health insurance is under attack. President’s Obama’s comprehensive health care reform law, intended to increase health care coverage for millions of Americans, faced extreme scrutiny by the U.S. Supreme Court last week. Congressman Paul Ryan’s federal budget plan is a cynical and careless proposal that would slash Medicaid programs, while providing tax cuts for the wealthy. In Wisconsin, Governor Walker and his fellow Republicans also propose gutting funds to the state’s vital Medicaid program. The ultimate goal is hard to deny: certain politicians and interest groups actually want a country with more uninsured citizens. The personal toll on the uninsured is devastating, especially for those dealing with work injuries.

Access to health insurance alters this equation. If the worker had adequate access to health insurance, especially Medicaid, he could obtain the medical care that could allow a return to work, regardless of whether the worker’s compensation insurer accepted or denied the claim.

As a worker’s compensation attorney, the following scenario plays out on a daily basis: A hard-working individual—who is lucky enough to have health insurance through the employer—is injured at work through no fault of his own. The injury is severe enough Continue reading Loss of Health Insurance Access: The Personal Toll on the Unexpected Uninsured.

Sandy Hook – A National Tragedy And A Case of Workplace Gun Violence – – A Call for Action

     On December 14, 2012 the shooting carried out by Adam Lanza in Newtown, CT awakened the American people to issues of gun control, school safety and mental health care.  The nation mourned the loss of so many innocent lives and lauded the heroic actions of the teachers and staff at the school. 

     I was on vacation in downtown Manhattan the morning of the shooting.  Everywhere my family and I went we heard the same topic, over and over.  On the subway, we heard conversations lamenting that children are no longer safe, even at school.  In restaurants and throughout the Christmas markets in the parks – in any public gathering – the overheard conversations were on the same topic: how to prevent this from happening again.  Our own community in West Seattle held a candlelight vigil on Alki Beach, as many, many other communities across the nation did, to gather together and, by sharing the loss and fear, lessen the pain, together.

 

All of the adults killed at Sandy Hook Elementary were on the job; all were victims of gun violence in the workplace.

 

     Another issue raised by this tragedy, one that has not been mentioned in the media, is workplace safety.  All of the adults killed at Sandy Hook Elementary were on the job; all were victims of gun violence in the workplace.  The families of the adult victims are now workers’ compensation claimants.  In Connecticut, death benefits are paid to surviving spouses at the rate of 75% of after-tax income, paid for life or until remarriage.  There is a $4,000.00 funeral allowance.  These benefits hardly compensate for the loss of a loved one.  An astounding 20% of all violent crime in the United States occurs in the workplace, injuring more than two million workers annually. Approximately 500 fatalities occur in the American workplace annually.  According to the Department of Labor, nearly 78% of all workplace homicides were caused by shootings. 1  The financial protection afforded by the workers’ compensation system does nothing to protect our safety and our lives from gun violence.  Only we, as a society, can take action to protect ourselves.  The change must begin with us, individually and collectively.

     For the past 30 years, Washington CeaseFire has been the only statewide organization in Washington dedicated to reducing gun violence. The organization was formed in 1983 by citizens who had been directly affected by gun violence. From a small group meeting in private homes, it has grown to an organization with more than 6,000 members across the state. Washington CeaseFire is now one of the most respected gun safety organizations in the nation and continues to work to reduce gun violence in communities throughout Washington State.

     Washington CeaseFire is sponsoring a march and rally on Sunday, January 13, 2013 at 1:30 p.m. in the wake of the tragic shooting at Sandy Hook Elementary School in Newtown, Connecticut. Washington CeaseFire is turning Anger into Action, as supporters march from Westlake Park to Seattle Center Mural Amphitheater. The rally, called StandUp Washington, will include speakers, music and remembrance for those lost. Most importantly, there will be a call to action on this day before the opening of the 2013 Legislative session. Washington CeaseFire will join with thousands of other concerned citizens in demanding a ban to semi-automatic assault weapons, similar to those used in the Newton shooting.

 

Beth Flynn, Executive Director of Washington CeaseFire, says, “We want to send a clear message to our legislators that we want to ban semi-automatic assault weapons.”

 

     Supporters are encouraged to bring their families and join civic, religious and education leaders in this show of support for sensible gun legislation and for the victims of all gun violence, from Newton to Seattle. Please use the hashtag #StandUpWA to spread the news on Twitter of the rally and march. A website has been set up at www.standupwa.org with further details.

     For more information, please call 206-972-1952 or email info@washingtonceasefire.org. Visit our website at www.washingtonceasefire.org. Follow us on Twitter at @WACeaseFire, or on Facebook at www.facebook.com/washingtonceasefire.

 

1 www.elt.comTerror and Violence in the Workplace

 

The Demise of the Crime Victims Compensation Program: the Impact of the Recession on Victims of Criminal Acts

     Washington State has, since 1973, provided financial assistance to the innocent victims of criminal acts. Beginning in 2010, however, the state legislature initiated a draconian curtailment of the benefits available to victims such that the program is but a shadow of its former self. With all the tragedies in the news as of late, it would be wise to pause and consider our duty as a society to provide for the victims of criminal acts. Because once the media frenzy is over and the memory of such events is but a distant spark in our collective consciousness, those victims will be all but forgotten—though they and their families will live with the tragedy and bear its consequences for the rest of their lives.

 

With all the tragedies in the news as of late, it would be wise to pause and consider our duty as a society to provide for the victims of criminal acts.

 

     The crime victim compensation movement grew out of the work of British prison reformer Margery Fry. In a 1957 article published in The Observer, Ms. Fry advocated for financial reimbursement to crime victims from the state; her vision was borne out of a deep sympathy for humanity as well as the notion that providing for victims of criminal acts would reduce the retributive aspect of the criminal justice system (thereby increasing the rehabilitative function).[1] The program she envisioned was to be patterned upon extant workers’ compensation programs.[2]

 

     The first country to pass a crime victim compensation law was New Zealand in 1963 followed closely by Great Britain. California was the first state to implement a crime victim compensation program in 1965, and by 1972 ten states in total had passed such an act. In 1973, Washington State passed “AN ACTRelating to special proceedings; providing benefits to victims of crime”—colloquially known as the Crime Victims Compensation Act.[3] The 1973 Act provided explicitly that victims of criminal acts would be provided the same benefits afforded to injured workers under the Industrial Insurance Act.[4] Consequently, the legislature entrusted the Department of Labor & Industries with management of all crime victims’ claims.

 

     The Crime Victims Compensation Program (CVCP) is funded through a combination of federal grants and state money. Prior to 2010, the CVCP was funded through appropriations by the Department of Labor & Industries. In 2010, however, L&I reported that it had “exhausted” its current appropriation for the CVCP and requested legislation creating a new, separate crime victims compensation account.[5]

 

     When the Washington State Legislature passed the requested law in 2010, it effectively severed funding of the CVCP from the L&I funds. The intent was to create a separate, untouchable fund. But bad drafting meant that an assumed source of revenue for the crime victims compensation account—a percentage of superior court-imposed criminal fines—never materialized, leaving a $670,000 hole in an annual budget of $2.7 million.[6] Unfortunately, in addition to severing the CVCP’s source of revenue, the legislature also drastically reduced the benefits available to crime victims. The legislature imposed an arbitrary cap of $50,000 on all claims and limited the amount of permanent partial disability benefits payable to $7,000.  

 

     Finally, in 2011 the legislature delivered the coup de grâce.[7] In addition to completely severing all references to the Industrial Insurance Act from the CVCA, the legislature completely eliminated future permanent partial disability payments and limited wage replacement benefits to $15,000.[8]

 

     In an era in which a single surgical procedure can easily run into the six-figure range, and serious injuries can result in the inability to work for years if not permanently, the arbitrary cap and drastic curtailment of compensation for victims of criminal acts is unconscionable. The costs associated with such injuries undoubtedly fall upon society’s shoulders, whether through increased use of other public benefits (unemployment, Medicare, welfare), or, worse yet, bankruptcy. According to a 2007 study by researchers at Harvard, outstanding medical bills account for an astounding 62.1% of all personal bankruptcy filings in the United States.[9] By failing to provide for the victims of criminal acts, the legislature is simply foisting the cost of uncompensated injuries back upon the public.

 

     It goes without saying that Washington State—and the rest of the country—faced a dire fiscal shortfall in 2010. Washington’s response, like that of the rest of the country, was unfortunately myopic, cutting funds to schools, universities, parks, and crime victims. We still face an uncertain future and an impending fiscal “cliff.” The question really is how much further Washington (and the rest of the country) is willing to cut into its social safety net. Next time you think about reduction of benefits to crime victims, think about Sandy Hook. Think about Clackamas Town Center. Or Virginia Tech, Columbine, etc. Unfortunately, the list goes on and on. Think about those events because it is those victims whom these types of budget cuts harm. The budget should not be balanced on the backs of victims of criminal acts. It is fiscally and morally irresponsible. We owe it to ourselves to provide for the most vulnerable members of society.  

Photo credit: zenobia_joy / Foter / CC BY-NC


[1] See Various, Compensation for Victims of Criminal Violence: A Round Table, 8 J. Pub. L. 191 (1959).

[2] Frank Weed, Certainty of Justice: Reform of the Crime Victim Movement 4 (1995).

[3] Laws of 1973, ch. 122.

[4] Id. § 1.

[5] Laws of 2010, ch. 122 §§ 3-7.

[6] See Fiscal Note accompanying SSB 5691, Laws of 2011, ch. 346.

[7] Laws of 2011, ch. 346.

[8] Curiously the legislature also removed acts of terrorism from the list of criminal acts for which an individual is entitled to compensation under the CVCA. During debates in committee, when asked why this provision was inserted into the bill, L&I’s delegate did not know.

[9] Himmelstein et al., Medical Bankruptcy in the United States, 2007: Results of a National Study, 122 Am. J. Med. 741 (2009).

 

Martin Luther King on “right to work”

“In our glorious fight for civil rights, we must guard against being fooled by false slogans, such as ‘right to work.’ It is a law to rob us of our civil rights and job rights. Its purpose is to destroy labor unions and the freedom of collective bargaining by which unions have improved wages and working conditions of everyone…Wherever these laws have been passed, wages are lower, job opportunities are fewer and there are no civil rights. We do not intend to let them do this to us. We demand this fraud be stopped. Our weapon is our vote.” —Martin Luther King, speaking about right-to-work laws in 1961

 

Photo credit: <a href=”http://www.flickr.com/photos/williammarlow/6084372823/”>WilliamMarlow</a> / <a href=”http://foter.com”>Foter</a> / <a href=”http://creativecommons.org/licenses/by-nc-sa/2.0/”>CC BY-NC-SA</a>

Employee Termination Because of Facebook Comment Does Not End Workers’ Compensation Benefits

Today’s post comes from guest author from Jon Gelman, LLC – Attorney at Law.

It is unclear whether, under Washington laws, Ms. Miller would be allowed continued time loss benefits. However, it is not uncommon for us to encounter this general scenario in our workers’ compensation practice, as well. When an injured worker returns to work, they can be fired “for cause” and this can result in the worker losing their ability to receive time loss compensation or to apply for unemployment compensation. Every case is different; the specific facts must be reviewed to determine whether legal action can be taken to restore time loss compensation payments after a firing.

An employee who was terminated because of comments made about her employer on Facebook has been allowed continuation of workers’ compensation benefits.

“Lawful termination, like fraud, cuts through everything; but the reasons for
firing here are murky. And whether it’s a legal termination or not isn’t a
question for this forum as workers’ compensation courts are not in the business
of determining whether a firing was appropriate. What is important here is
that termination from employment in and of itself does not end entitlement to
supplemental earnings benefits as set forth in the [Palmer v. Schooner ] case.
In the case at hand, [Ms. Miller] returned to work in a light duty status. She
worked for a short period of time until her termination on October 14, 2010.
She was terminated for violating a hospital policy by posting a comment on Facebook. 
Pursuant to Ms. Salutillo’s comments in the [CSPH] employee memorandum,
[Ms. Miller’s] employment was terminated based on failure to uphold standards of
behavior. After her termination, [Ms. Miller’s] treating physician took her
off work for a short period of time, but ultimately opined she could work light
duty.”

BRENDA MILLER v. CHRISTUS ST. PATRICK HOSPITAL

— So.3d —-, 2012 WL 5238000 (La.App. 3 Cir.), 2012-370 (La.App. 3 Cir. 10/24/12)

Read More about Social Media and Workers’ Compensation

Jul 03, 2012
An injured worker was denied benefits when an Arkansas Court admitted into evidence Facebook pictures that were posted on line showing him drinking and partying. The worker had alleged that as a result of a hernia, 
Apr 13, 2012
Facebook’s new announcement today creates even a greater problem for workers’ compensation claimants. Providing even greater historical information about an unsophisticated Facebook user puts even more information, 
May 07, 2012
The announcement of Facebook to allow for the public listing of organ donors of it social media site, albiet with good intentions, raises concerns about the privacy of workers’ compensation claims as the organs could become 
Sep 15, 2010
Social networking sites, such as Facebook, have now become informational sources that workers’ compensation lawyers are now utilizing for evidentiary purposes. The question that remains unanswered is how information 

Social Security Disability: Get the evidence you need

Today’s post comes from guest author Roger Moore from Rehm, Bennett & Moore.

Social Security Disability applicants sometimes have trouble getting the evidence needed to demonstrate that they have a disability.

PROBLEM 1: You haven’t had regular medical care because you don’t have health insurance.

Without regular medical care, it’s difficult to develop a relationship with a doctor that is strong enough that the doctor can complete a report on your health. Even if your disability is very real, proving it in Court can still be a hard thing to do. However, without medical insurance, most doctors won’t see a patient.

SOLUTION: In Nebraska there are some free clinics where you can be seen by a doctor even if you cannot afford to pay. To find a free clinic near you, contact your local health department. Anyone planning on applying for Social Security Disability should try to develop a relationship with a doctor by seeking regular medical care as often as possible.

PROBLEM 2: Many applicants don’t have the right kinds of conversations with their doctors about their disabilities.

Doctors are mainly concerned with your symptoms and how they can help you get well. They aren’t necessarily focused on the kinds of things they’ll need to know to help you with your Social Security Disability claim. To fill out a report for your claim, they’ll need to know exactly how much you can and cannot do. Continue reading Social Security Disability: Get the evidence you need

Doctors, Patients and Opioid Abuse

Today’s post comes from guest author Jon Gelman from Jon Gelman, LLC – Attorney at Law.

Getting to the real reasons why doctors prescribe opioids to opioid abusers is an apparent challenge to the essence of the nation’s workers’ compensation system. In a recent article in the New England Journal of Medicine it is revealed that doctors continue to prescribe opioids to abusers because of “…Recent changes in medicine’s philosophy of pain treatment, cultural trends in Americans’ attitudes toward suffering, and financial disincentives for treating addiction …”

Until the workers’ compensation medical delivery program furnishes treatment delivery in an effective and efficient manner the challenge of drug addiction will tragically continue.

More about drug addiction
Jul 27, 2012
Pharmaceutical reform has been a major topic of interest and reform efforts nationally in the workers’ compensation arena. More particularly the alledged abuse of opioids have received particular attention. Several physicians …
May 24, 2012
A recent Texas case holding an employer liable holding an employed liable for a fatal opioid overdose arising out of work-related event highlights again that, the workers’ compensation medical delivery system just isn’t …
Jan 28, 2012
Nursing Home Abuse: Drugging of Patients. Many seriously injured workers end up living in nursing homes for convenience and care. Workers compensation act usual pay for nursing home care, but do they really know what …
Oct 28, 2009
The Wall Street Journal reports today about a claim against pharmacies as a result of customer drug abuse. In the State of Nevada a case is pending that may confer liability upon a drugstore for the consequences of an …

Truck Drivers Beware – Your Insurance May Not be What You Think

Today’s post comes from guest author Leonard Jernigan from The Jernigan Law Firm.

NOTE: The timeline for filing an injury claim with the Washington Department of Labor and Industries is shorter – only 1 year – than what Mr. Jernigan describes in his article.

There is a scam out there and truck drivers are the victims, especially if they are seriously injured in a trucking accident. It works like this: an out of work driver hears about a job and fills out an application with a national trucking company. He then gets a call saying he has been accepted as a driver, contingent on a physical exam and a drug test. The driver is then asked to show up at work on an appointed date for his first delivery job. When he shows up he is asked to “sign papers” which allow him to lease/own the truck as he drives it across the country, and he signs a contract that declares that he is an independent contractor (although in reality the trucking company controls the deliveries and is the only source of revenue for the driver). Further, he is required to purchase accident insurance through a broker designated by the trucking company and the premiums are taken out of his paycheck. Because the driver is anxious to work again and is not particularly experienced in reviewing legal documents the driver signs the papers, gets in the truck and begins working again as an interstate truck driver.

The costs of this workplace injury are now shifted from the employer/insurer to the taxpayer.

Like most of us, these drivers never expect to be in a serious accident. If they unfortunately do have an accident while driving the truck, they look to the accident policy they purchased. If they are disabled, it pays the same benefits as workers’ compensation and provides medical coverage. Many drivers think they are actually on workers’ compensation. The catch is that all benefits stop after 104 weeks (2 years). If after that time if the driver is still disabled and still needs medical care, it is a shock to find out none is available under this contract.

Is there no hope for the truck driver under these circumstances?

Why 104 weeks? Most states have workers’ compensation systems that require the claim be filed within 2 years. Since the 2-year period has run, the driver is out of luck and cannot file for workers’ compensation under state law. What happens if the driver needs additional surgery and continues to remain disabled? Most likely federal assistance programs like Medicaid or Medicare enter the picture and the costs of this workplace injury are now shifted from the employer/insurer to the taxpayer.

If involved in a serious accident, be aware of the 104-week provision and file a workers’ compensation claim before that time period expires.

Is there no hope for the truck driver under these circumstances? Although it might be a tough fight, most workers’ compensation statutes specifically state that an employer cannot contract away its obligations under the Workers’ Compensation Act. Thus, the truck driver’s legal argument is that the contract designating the driver as an independent contractor was void as a matter of law. If the employee has been the subject of fraud, equity may allow the driver to go ahead and file a claim and pursue the action even through the 2-yr period has run. Under these circumstances, certainly in North Carolina, the driver would have an opportunity to pursue this claim.

The lesson to be learned by truck drivers is not to assume that the contract you have innocently signed is valid. If involved in a serious accident, be aware of the 104-week provision and file a workers’ compensation claim before that time period expires. Finally, if you are asked to sign one of these contracts and you have options of other employment, you may want to decline this job offer and work for a company that is more ethical. Your livelihood and the welfare of your family may depend on this important decision.

Published by Causey Wright