WORKERS' COMPENSATION; STATE OFFICERS AND EMPLOYEES;

WORKERS' COMPENSATION; PUBLIC EMPLOYEES - STATE;

You asked for an update on the moratorium on state employees workers’ compensation (WC) settlements.

A moratorium exists on state employee workers’ compensation settlements due to increasing medical costs and the state budget deficit. At the same time, the state does settle a handful of cases even under the moratorium.

The Department of Administrative Services (DAS) Workers Compensation Unit administers state employee workers’ compensation policy as at effects state agencies and the state Workers’ Compensation Commission (WCC) adjudicates claims submitted by both public- and private-sector employees. Both DAS and WCC agree that the moratorium has been in place for at least a year.

DAS Workers’ Compensation Unit director Joseph Prevuznak indicated that most state agencies are running deficits in their WC accounts largely because of payouts for medical claims and increasing medical costs. This situation, plus the extremely tight state budget, led DAS to suggest to agencies that they adopt a general policy of no settlements unless there are strong reasons to make an exception.

Prevuznak stated that a small number of state employee cases, about 10 to 15 during FY 2001-02, are still settled for a lump-sum payment. When cases are not settled, the worker often continues to receive weekly payments for (1) lost wages or (2) temporary partial disability or temporary full disability. Workers’ compensation payments are also made to cover medical costs arising from the injury.

Both Prevuznak and Connie Rue, legislative liaison for the WCC, stated that it is often in the best interests of the state and the injured workers to settle the claim for a lump sum and close the case. This way the state limits its financial liability and the employee gets an agreed-to lump settlement. Under state WC statutes neither side can force the other to accept an agreement, and before any employee accepts a settlement a WCC commissioner will hold an informal hearing to review the settlement with the employee and make sure the he or she understands the settlement will end the employee’s rights in the claim.

Prevuznak said settlements usually are approved in the current climate only if (1) it is clear the state will avoid a much greater liability through settling; (2) the case has complicating factors, such as a complaint before the Commission on Human Rights and Opportunities, and the settlement will address all outstanding complaints and issues; or (3) settling the case is a priority for another reason.

JM: eh