Your favorite Aunt worked hard, but also played hard.

She lived pretty much paycheck to paycheck, like many people in our society. What little money was in her 401k pretty much dried up in the post-Lehman crash.

The dream of twilight years sipping Tequila Sunrises at a Del Webb retirement community now fades. Auntie is going to be working into her seventies, or beyond, to pay her bills.

As this scenario gets played out with the aging boomer generation, what are the projected consequences for California’s workers’ comp system?

Maybe not all that much.

At least that’s the conclusion of a powerpoint presentation to CHSWC in Oakland this week. The talk, by Frank Neuhauser of UC Berkeley, was an update on research funded by CHSWC.

Titled “Working Safer or Just Working Longer? Impact of an Aging Workforce on Injury Frequency and Disability Cost?”, the study is being done by Neuhauser and UC Berkeley grad student Anita Mathur.

Looking at 350,000 disability claims, assigning risk values for workers in the Current Population Survey, using WCIS data and controlling for other factors (note: the methodology was difficult to follow in the limited powerpoint graphs, and a text comp of the study is not yet available), the study assigns risk values for workers and calculates the risk for age and gender.

Neuhauser and Mathur conclude that the aging of the worker population will have small impact on overall costs in workers’ comp.

That’s counterintuitive.

One would expect that aging workers would have confounding medical problems which could result in higher medical treatment costs and increased indemnity costs. On the other hand, perhaps older workers do “work smarter”, or transition into less risky jobs.

Here are some of the primary conclusions that Neuhauser claimed:
-in 2010 workers older than 55 were 11.8% of the workforce but by 2030 it will increase to 22%
-injury rates decline after 24 for men and 64 for women
-duration of days paid for injury increases with age for both men and women
-after 18-24, women’s injury rates are higher as they age
-women’s injury rates are substantially higher if they are doing the same job as men (Neuhauser speculated that this might be because many workplace machines and processes were designed wqith men in mind)
-a “surprising finding that women are at much greater risk than men, at all ages”

But Neuhauser noted that the effects of aging may be substantial for age specific programs such as Medicare. According to the powerpoint talking points this is said to include the following factors:
-the cost of Medicare Set-Asides have substantially increased (note:
nothing requires claimants of carriers to settle medical and thus there would be no required MSAs)
-older workers occupational injuries are said to be under-reported
-there are “potentially large increase in recoveries by Medicare/Medicaid and health insurers”

A number of these points seem debatable. But workerscompzone looks forward to the release of the text of the study in the coming moments.

Here’s the official link on the CHSWC website: … tin05.html

Stay tuned.

Julius Young

It’s time again for the blog’s workers’ compensation quiz.

Test your perspicacity on all things comp related by taking the 2011 California workers’ compensation quiz. In some instances, more than one answer may be appropriate. At year’s end I’ll post the name of ye who is victorious, so get your answers in to

1. The person named as Administrative Director of the DWC under Jerry Brown will be: a) a workers’ comp judge; b) a current applicants attorney;
c) a former applicants attorney; d) a former DWC official; e) staffer at a large California insurance company; (f) former legislative advocate for a workers’ comp stakeholder

2. The statutorily mandated revision of the 2005 Permanent Disability Rating Schedule will: a) be done in 2011 by the Brown Administration;
b) be delayed past 2011 as further studies are done; c) be addressed as part of a larger 2011 legislative compromise on workers’ comp;

3. In 2011, California workers’ comp insurers will: a) increase rates on average of less than 5% ; b) institute double digit rate increases, causing the perception of a new workers’ comp crisis; c) increase rates on average in the 5 to 10% range

4. By year’s end, the Ogilvie II en banc case will be: a) settled law, as appellate challenges fizzle b) mooted by a new schedule or a legislative compromise; c) in question due to conflicting Court of Appeal rulings; d) defunct, replaced by a new schedule rebuttal paradigm

5. California’s budget deficit will have the following impacts on the system: a) none, as the Brown Administration protects “user funded”
agencies; b) large cuts after the public votes against tax and fee increases in a special election; c) significant cuts in the 2011 budget, mostly restored after a revenue-increase measure passes a summer 2011 election; d) more furloughs

6. In 2011 regarding the Almaraz-Guzman line of cases: a) acceptable Almaraz-Guzman analysis is further refined in followup
panel decisions; b) a writ is finally granted in Almaraz; c) appellate case review is granted in cases which will further address A-G; d) nothing
significant occurs; d) rebuttability of the schedule is limited by legislative

7. Power on workers’ comp issues under the Brown Administration will be: a) centered at the DWC level as the administration delegates lots of authority; b) kept tightly within the Governor’s close advisors in the horseshoe; c) irrelevant because the Governor will largely ignore workers comp due to preoccupation with the budget crisis

8. California’s new Insurance Commissioner, Dave Jones, will: a) extend the Poizner strategy of questioning rate increases; b) seek to play an even more active role in the workers’ comp arena, scrutinizing carrier behavior and profits; c) will largely focus on healthcare reform issues, leaving workers’ comp on the back burner in 2011

9. In 2011 the DWC will: a) complete the 12-point medical cost savings plan started by Schwarzenegger; b) abandon the remaining items in the 12-point plan; c) complete some items, but not the RBRVS doctor fee revision; d) propose regs to tighten procedures for medical liens e) adopt regs addressing problems in the QME system

10. In 2011 the WCAB will place significant focus on: a) discovery issues in workers’ comp; b) the meaning of Labor Code 4662 and its relationship to a law based on DFEC; c) what is permissible under Guzman and what is excessive; d) attorney ethics; e) Subsequent Injuries Fund issues

11. Comp stakeholder groups that will form new and interesting alliances in 2011 are: a) CSIMS; b) the Cal-Chamber; c) CAAA; d) Self-insurers; d) Voters Injured at Work; e) CWCI;

12. 2011 will be notable as: a) a quiet year when very little changed in California workers’ comp; b) a year when comp premiums were affected as unemployment spiked higher due to budget problems and bond market turmoil; c) a year when the system was again reformed; d) a year when the economy’s growth marked the beginning of a rise in total premium written; e) a year when rate increases put comp back on the political radar

13. By years end there will be: a) change in the QME system; b) a law
banning discrimination in apportionment; c) another RAND wage loss study; d) a new lien resolution system; d) a change in the standard for rebutting the schedule; e) pharmacy networks regs; e) Wikileaking spreading to workers comp, as sensitive documents see the light of day

Ye soothsayers, what say ye? Special bonus given to those who accurately suggest other significant developments in 2011 not covered in the above.

Happy New Year to readers.

Julius Young