In 1970, Congress created the Occupational Safety and Health Act. This created the Occupational Safety and Health Administration, commonly known as OSHA. Much has changed in America in the last 46 years. Part of the Act created a special commission to study various perceptions and complaints regarding American state workers' compensation programs.
In 1972, the Commission issued its report, following a year of meetings across the country, and hundreds of individuals testifying. There were 15 appointed Commissioners, and then five more from the federal government. Some perceived the Commission as thus tilted towards the academic (3) and the federal government (5). Four state regulators were involved, as well as three medical professionals. Two insurance carriers and two employers. Organized labor was represented by the AFL-CIO.
Following the Commission's incredible efforts, travels, and schedule, the 1972 Commission Report was issued. The following material (in italics to denote that it is all direct quotation and not my writing) was included in the Report. Note that the term "workmen" is repeated often; that was the term-of-the-age 44 years ago. It is certainly not appropriate, though it was accepted then. However, I have elected not to make any editorial effort, but instead have quoted directly from the Report.
We
recommend that workmen's compensation be compulsory rather than elective. (See
R2.1)
We
recommend that employers not be exempted from workmen's compensation because of
the number of their employees. (See R2.2)
As
of July 1, 1973, coverage should be extended to agricultural employees whose
employer's annual payroll exceeds $1,000. By July 1, 1975, coverage should be
extended to fam1workers on the same basis as all other employees. (See R2.4)
We
recommend that by July 1, 1975, household workers and all casual workers be
covered under workmen's compensation at least to the extent they are covered by
Social Security. (See R2.5)
We
recommend that workmen's compensation coverage be mandatory for all government employees.
(See R2.6)
We
recommend that the employee be given the choice of filing a claim for workmen's
compensation in any State where he was hired, or where his employment was
principally localized, or where he was injured. (See R2.1l)
We
recommend that the "accident" requirement be dropped as a test for
compensability. (See R2.l2)
We
recommend that all States provide full coverage of work-related diseases. (See
R2.13)
We
recommend that the waiting period be no more than 3 days and that the
retroactive period be no more than 14 days. (See R3.5)
We
recommend progressive increases in the maximum weekly wage benefit, according
to a time schedule stipulated in Chapter 3, so that by 1981 the maximum in each
State would be at least 200 percent of the State's average weekly wage. (See
R3.8 and R3.9)
We
recommend that cash benefits for temporary total disability be at least
two-thirds of the worker's gross weekly wage. The two-thirds formulation should
be used only on a transitional basis until the State adopts a provision making
payments at least 80 percent of the worker's spendable weekly earnings. (See
R3.6 and R3.7)
We
recommend that our permanent total benefit proposals be applicable only in
those cases which meet the test of permanent total disability used in most
States. (See R3.11)
We
recommend that permanent total benefits be paid for the duration of the
worker's disability without limitations as to dollar amount or time. (See
R3.17)
We
recommend that the Social Security benefits for permanent and total disability
be reduced in the presence of workmen's compensation benefits. (See R3.18)
We
recommend that death benefits be at least 66 2/3 percent of the worker's gross
weekly wage. The two-thirds formulation should be used only on a transitional
basis until the State adopts a provision making payments at least 80 percent of
the spendable earnings of the worker. (See R3.20 and R3.21)
We
recommend that the minimum weekly benefit for death cases be at least 50
percent of the average weekly wage in the State. (See R3.26)
In
death cases, we recommend that the State's maximum weekly benefit be increased
until, by 1981, the maximum represents 200 percent of the State's average
weekly wage. (See R3.23 and R3.24)
We
recommend that benefits in death cases be paid to a widow or widower for life
or until remarriage, and in the event of remarriage we recommend that two
years' benefits be paid in a lump sum to the widow or widower. We also recommend
that benefits for a dependent child be continued until the child reaches 18, or
beyond such age if actually dependent, or at least until age 25 if enrolled as
a full-time student in any accredited educational institution. (See R3.25)
We
recommend that workmen's compensation benefits be reduced by the amount of any payments
received from Social Security by the deceased worker's family. (See R3.27)
We
recommend that the worker be permitted the initial selection of his physician,
either from among all licensed physicians in the State or from a panel of
physicians selected or approved by the State's workmen's compensation agency. (See
R4.1)
We
recommend there be no statutory limits on the length of time or dollar amount
for medical care or physical rehabilitation services for any work-related
impairment. (See R4.2)
We
recommend that each workmen's compensation agency establish a medical
rehabilitation division, with authority to effectively supervise medical care
and rehabilitation services. (See R4.5)
We
recommend that the medical-rehabilitation division within each State's
workmen's compensation agency be given the specific responsibility of assuring
that every worker who could benefit from vocational rehabilitation services be offered
those services. (See R4.7)
We
recommend that States establish a second injury fund with a broad coverage of
pre-existing impairments. We recommend that the second injury fund be financed
by charges against all carriers, State funds, and self-insuring employers in
proportion to the benefits paid by each, or by general revenue, or by both
sources. We urge State workmen's compensation agencies to interpret eligibility
for second-injury funds liberally in order to encourage employment of the physically
handicapped and to publicize the programs to employers and employees. (See R4.10,
R4.11, and R4.12)
We
recommend that, subject to sound actuarial standards, the experience rating
principle be extended to as many employers as practicable. (See R5.3)
We
recommend that insurance carriers be required to provide loss prevention
services and that the workmen's compensation agency carefully audit these
services. State-operated workmen's compensation funds should provide similar
accident prevention services under independent audit procedures where
practicable. Self-insurers should likewise be subject to audit with respect to
the adequacy of their safety programs. (See R5.2)
We
recommend that attorneys' fees for all parties be reported for each case, and
that the fees be regulated under the rulemaking authority of the workmen's
compensation administrator. (See R6.15)
We
recommend that each State utilize a workmen's compensation agency to fulfill
the administrative obligations of a modern workmen's compensation program. (See
R6.1)
We
recommend that, insofar as practical, all employees of the agency be full-time
with no outside employment, with salaries commensurate with this full-time
status. (See R6.5)
We
recommend that the time limit for initiating a claim be three years after the
date the claimant knows, or by exercise of reasonable diligence should have
known, of the existence of the impairment and its possible relationship to his employment,
or within three years after the employee first experiences a loss of wages
which the employee knows or, by exercise of reasonable diligence, should have
known was because of the work-related impairment. If benefits have previously
been provided, the claim period should begin on the date benefits were last furnished.
(See R6.13)
We
recommend that States be free to continue their present insurance arrangements
or, if the States wish, to permit private insurance, self- insurance, and State
funds where any of these types of insurance now are absent. (See R6.20)
We recommend that procedures be established in each State to provide benefits to employees whose benefits are endangered because of an insolvent carrier or employer, or because an employer fails to comply with the law mandating the purchase of workmen's compensation insurance. (See R6.21)
The Report notes some conclusions:
Several
reasons for the indifferent response to previous reform proposals are evident. The
lack of interest in or understanding of workmen's compensation by State
legislators and the general public is attributable in part to the complexity of
the program. Various interest groups, including employers, unions, attorneys, and
insurance carriers, have often allowed their specialized concerns to stand in
the way of general reform. And State legislators and officials, even when they
have been genuinely interested in reform, have too often been dissuaded by the
irrational fear that the resulting increase in costs would induce employers to transfer
business to States with less generous benefits and lower costs.
Although
our recommendations will increase the costs of workmen's compensation for most
States and many employers, we agree that employers and the States have the
resources to meet such costs. The States have the distinct advantage of having
personnel and procedures in place: a Federal takeover would substantially disrupt
established administrative arrangements.
Moreover,
we have seen no evidence that Federal administrative procedures are superior to
those of the States. We reject the suggestion that Federal administration be
substituted for State programs at this time.
All
Commissioners believe the virtues of a decentralized, State-administered
workmen's compensation program can be enhanced by creative Federal assistance.
We
believe that the threat of or, if necessary, the enactment of Federal mandates will
remove from each State the main barrier to effective workmen's compensation
reform: the fear that compensation costs may drive employers to move away to
markets where protection for disabled workers is inadequate but less expensive.